Why the U.S. Patent System is still not First-to-File?

(IPRinfo 5/2011)

Joshua P. Wert
U.S. Patent Agent
Seppo Laine Oy

The new U.S. patent system is not a First-to-Invent system but it is not a classic First-to-File system either.

United States patent law traces its roots back to 1787 and the signing of the Constitution of the United States of America. Article 1, Section 8, Clause 8 of the U.S. Constitution states, ”The Congress shall have Power… To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries”.

Those few broad words are what gave birth to the modern patent system, and in particular to what is known as the First-to-Invent system.

Who will be the last first to invent?
As of 2011, only the United States continues to adhere to the doctrine that the inventor who is first to invent is entitled to the exclusive right to that invention. The rest of the world has adopted a more pragmatic approach to patenting and simply grants an exclusive right to the inventor who is first to file an application with a patent office. This so called First-to-File approach leads to what is sometimes referred to as ”the race to the patent office”.

The so called First-to-Invent approach alleviates this race by including an interference provision. In an interference, when two inventors claim to have invented the same invention the Patent Office determines who was the first and awards that inventor with the exclusive rights.

Interference proceedings are extremely rare and costly. While about half a million applications are filed every year with the United States Patent and Trademark Office (USPTO), only a dozen or so interference proceedings arise.

According to the Director of the USPTO, out of these few cases, over 70 percent of the time the result of the interference proceeding is that the first inventor to file was also the first to invent. This leads many to comment that in practice, there is little difference between a First-to-File and a First-to-Invent system.

On September 16, 2011 President Obama signed the Leahy-Smith America Invents Act. This Act officially gets rid of America’s First-to-Invent system, and Interferences, as of March 26, 2013. However, the Act does not necessarily turn the United States in to what is commonly referred to a First-to-File system.

Filing first in Europe
The European Patent Office (EPO) has a model First-to-File system. As it is simply stated, the first entity to file a patent application with a Patent Office is entitled to the exclusive right to that invention. If someone files an application the very next day, even if they came up with the invention two years before the other entity they cannot receive a patent for anything described in the first patent application.

While arguably cruel, this system is straight forward and its intention is clear. Unlike a First-to-Invent system which is based on fairly rewarding the first person to come up with an innovation, the EPO style system rewards the first person who shares their invention with the public so the public can receive the most advantage from their work. Therefore, from a European point of view, inventors should file a patent application as soon as they come up with a patentable innovation.

Though the intention of the EPO style system is simple it brings about an interesting practical challenge, deciding when an innovation is patentable. Beyond Novelty and Industrial Applicability, an innovation must be more than a trivial improvement of a known thing.

Additionally, the patent application must be detailed enough that someone of ordinary skill in the field of the invention would be able to replicate the innovation, i.e. the application must describe more than just a concept of an invention. In a race to the Patent Office it can be difficult to balance the need to develop a concept to the point of patentability and the need to file before others.

Prior art is what really matters
Simply put, prior art is the collection of information, mostly publications, which a Patent Office uses to state an invention is not new and/or not inventive. Prior art comes in many forms but is most often other patents and patent applications filed prior to an application.

Generally, a First-to-File system is based on the principle that when the first person files an application for an invention that there is no prior existing document exactly describing that invention. In the case of the EPO, this includes an inventors own publications and even their own prior patent applications.

As an example, say a researcher develops an improvement of a device but thinks it is only a trivial improvement and therefore not patentable. That researcher then publishes their improvement in a technical journal, which upon publishing becomes prior art.

After reading the journal colleagues realize that the improvement is actually significant, patentable and they tell the researcher. At this point, even if the researcher is the first to file a patent application on their improvement they will not receive a patent because the innovation was disclosed in prior art journal publication.

In practice, due to the definition of prior art, a First-to-File system therefore really means a First-to-File-an-Undisclosed-Invention system. Thus, it is imperative that inventors who would like a patent from a First-to-File system, such as the EPO, file a well developed patent application before anyone else and before disclosing their invention to the public. This fits in line with the intent of rewarding an inventor with an exclusive right for an invention in return for the inventor disclosing the invention to the public.

So what is the new U.S. system?
The new U.S. patent legislation clearly gets rid of Interferences and the wording in the United States Code which effectively made the U.S. a First-to-Invent system, §35 U.S.C. 102 (g)(1) ”A person shall be entitled to a patent unless… another inventor… establishes… that before such person’s invention thereof the invention was made by such other inventor…”. Thus, as of March, 26 2013, the United States will definitely not be a First-to-Invent.

However, the new legislation replaces that section with an interesting exception; §35 U.S.C. 102 (b) [NEW] ”A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention…if (A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor; or (B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor…”. This exception brings about two possibilities.

First, if the researcher in our example above realizes their invention is patentable within a year from disclosing the innovation, their journal publication will not be used as prior art to prevent them from obtaining a patent.

This relieves some tension when an inventor realizes they have already disclosed something they later wish to patent in the United States. However, if the intension of a First-to-File patent system is to reward the early disclosure of an innovation with an exclusive right, the new U.S. system doesn’t seem to have the same intention of other First-to-File systems.

The second possibility is if someone files a patent application before our researcher on the same invention disclosed in the technical journal. Under the new U.S. legislation the earlier filed application would not prevent our researcher from getting a patent since the subject matter of the earlier filed application was previously disclosed by the researcher. Clearly, a system in which a second inventor to file an application is eligible for a patent cannot be classified as a First-to-File system.

What is a disclosure?
While the definition of prior art is relatively clear, the definition of disclosure will likely be developed and refined over the next few decades in litigation in the new U.S. system. What is clear is that the new U.S. patent system is not a First-to-Invent system and isn’t a classic First-to-File system either.

As the new system similarly lacks a clear definition and will certainly be developed and refined over time, it is only fitting to name the U.S. as the world’s first, First-to-Disclose patent system.

Leahy-Smith America Invents Act