Whereas the law previously provided prior user rights only for business method patents, the new statute extends to patents covering all technologies.  Under the new statutory provisions in the law, third parties who can demonstrate that they were using an invention commercially for at least one year prior to the filing date of a patent application relating to such invention will be able to invoke the prior user rights defense when the circumstances defined by the statute are met.  However, the AIA does include several limitations and exceptions to the prior user rights defense, including a prohibition against license, assignment or transfer of the defense except in connection with the assignment or transfer of the entire business, a limitation on the geographic area to which the invention was used before the critical date, and an explicit exception to the defense for patents owned by or assigned to universities. 

In its January 2012 report to Congress, the US Patent and Trademark Office (USPTO) indicates that these prior user rights address the inherent inequity a first-inventor-to-file system creates between an earlier commercial user and a later patentee.  The USPTO asserts that this defense is pro-manufacturing and pro-jobs because it rewards businesses which put new technology into commercial use.  However, for any business making a decision between maintaining a technology as a trade secret and filing a patent application, several factors need to be considered. 

The statutory limitations placed on the prior user rights must be carefully considered.  These limitations include the risk that another files a patent application less than a year before your first commercial use which renders the defense inapplicable, and a geographic limitation on the defense.  Other factors to consider include more traditional factors assessed in making trade secret determinations, including how readily one may reverse engineer a commercial process/product and how readily the business can maintain control over the trade secret.  Additionally, if a business is operating internationally, the extent to which foreign countries have similar provisions in their laws must also be considered.   If you are considering whether to maintain a trade secret or file a patent application, you should discuss the specific details of your circumstances with your patent professional in order to assess your specific situation.

To summarize the facts, as a post-doctoral researcher at Kent State, Dr. Falana developed a synthesis protocol for making a novel class of naphthyl-substituted TADDOL (tetraaryl-1,3-dioxolan-4,5-dimethanol) compounds for use in LCDs (liquid crystal displays).  Among the compounds synthesized by Falana was Compound 7, which exhibited temperature independence over a range of -20 to +30 °C of the important high helical twisting power property.  This range of temperature independence represented significant progress, but was not sufficiently broad to meet the project goals.  Following Dr. Falana’s resignation from the research group, another member of the group then used Dr. Falana’s synthesis protocol to synthesize a compound that exhibited temperature independence over a range -20 to +70 °C, meeting the goals of the project.  Generic claim 1 did not expressly include a requirement for a temperature independence range of high helical twisting power.  Dr. Falana then filed in district court to be added as an inventor to the ’789 Patent.  The District Court found for Dr. Falana, ruling that he contributed to the conception of the claimed invention and was to be added as an inventor.  The defendants, Kent State and Seed, then appealed to the Federal Circuit.

One of the defendant’s arguments was that even if Dr. Falana had contributed to the synthesis protocol, he was not a joint inventor, because the claims were all directed to compounds and not methods, invoking the decision in Board of Trustees of Fla. State v. American Biosciences, 333 F.3d 1330, 67 USPQ2d 1252 (Fed. Cir. 2003).   However, in contrast to that case, the method used in this case to make the genus of compounds claimed in the subject patent was Dr. Falana’s synthetic protocol.  The Federal Circuit agreed with the conclusion of the District Court that Dr. Falana’s contribution to developing the synthetic protocol was greater than the exercise of ordinary skill in the art.

The Federal Circuit held that Falana contributed to the conception of a genus of chemical compounds because he envisioned the structure of a novel genus and contributed the method, not already within the scope of public knowledge, of making that genus.  On the basis of this conception test, the Federal Circuit affirmed the district court finding that Dr. Falana was an inventor of the ’789 Patent.

Under the new law, it is permissible to “virtually mark” the product with an Internet address rather than the patent number itself.  As an example, a product covered by a patent could be marked: “This product is covered by one or more U.S. patents or patent applications. See http://www.[company].com/patents for details.”  The current patent and/or application number must then be included on a website which is accessible to the public for free.  Thus, in the event of an application maturing into a patent, or an additional patent issuing, the packaging would not need to be change.  Rather, only the notation on the website would need to be timely updated. 

One caveat to the above is that the penalties for mis-marking can be significant.  Thus, whenever the product is altered in any way, a new product launched, or the patent status changed (application is abandoned, patent grants or patent expires), the patent marking must be re-assessed.  Further, because some products are the subject of method patents, rather than a patent to the product itself, careful attention must be paid to the language used.  It is advisable to seek the help of competent patent counsel in these matters.

In HGS v. Eli Lilly (2011) UKSC 51, the patent at issue claimed sequences for the Neutrokine-a protein, which had been discovered using bioinformatics.  Bioinformatics, in general, uses computer programs to compare “unknown” sequences with sequences of previously characterized genes, in order to predict the function of the unknown sequence.  Thus, the patent application at issue listed many possible, and sometimes conflicting, activities of the Neutrokine-a protein, but provided no clinical data to support these predictions. 

Similar to the “utility” requirement under US law, the UK “Industrial Application” provision requires that an invention be able to be “made or used in any kind of industry, including agriculture”.  Due to the lack of substantiating data, the lower courts had found that the industrial application provision was not satisfied, and rather the application could only form the basis for a further research program. 

In a stunning reversal, the UK Supreme Court upheld the validity of the patent, holding that disclosure of the existence and structure of Neutrokine-α and its gene sequence, and its membership of the TNF ligand superfamily, taking into account the common general knowledge in the art, was sufficient to satisfy the requirement of industrial applicability.  The court was particularly influenced by two factors in its decision.  First, the BioIndustry Association intervened and submitted evidence that the UK biotech industry would be negatively impacted if the court set the industrial application bar too high, and followed the decision of the Court of Appeal.  Second, the Supreme Court found that the lower courts’ decisions were inconsistent with the EPO Technical Board of Appeal (“Board”), which had previously found the industrial applicability requirement met in a parallel proceeding in the EPO.  Although the court indicated that the reasoning of the Board is not binding, they stressed the importance “UK patent law aligning itself, so far as possible, with the jurisprudence of the EPO”.  Experts predict that the HGS decision will have a positive impact on the EP biotech industry.

More particularly, the court ruled that “any human ovum after fertilisation, and non-fertilised human ovum into which the cell nucleus from a mature human cell has been transplanted, and any non-fertilised human ovum whose division and further development have been stimulated by parthenogenesis constitute a ‘human embryo,’” and that “it is for the referring court to ascertain, in the light of scientific developments, whether a stem cell obtained from a human embryo at the blastocyst stage constitutes a ‘human embryo’ within the meaning of Article 6(2)(c) of Directive 98/44 [the EP law which bars patents on inventions “where their commercial exploitation would be contrary to ordre public or morality.”].   The court also determined that the use of human embryos for scientific research is covered by the “exclusion from patentability concerning the use of human embryos for industrial or commercial purposes” under Directive 98/44. Uses of human embryos “for therapeutic or diagnostic purposes which are applied to the human embryo and are useful to it” are, however, patentable, according to the court. The court further stated, “Article 6(2)(c) of Directive 98/44 excludes an invention from patentability where the technical teaching which is the subject-matter of the patent application requires the prior destruction of human embryos or their use as base material, whatever the stage at which that takes place and even if the description of the technical teaching claimed does not refer to the use of human embryos.”  

This ruling extends to embryonic stem lines which were established in the laboratory many years ago and where the invention itself does not involve obtaining new embryonic stem cells. This decision is based on the argument that even established embryonic stem cell lines were originally derived from fertilized eggs.  At present, many European countries allow embryonic stem cells to be obtained from the large numbers of surplus embryos produced during fertility treatment. Several hundred such cell lines are now available to researchers worldwide. The cells, once obtained, can be grown and multiplied in the lab to give ‘cell lines’ that are able to produce an almost infinite number of embryonic stem cells and can be converted into all the different cell types of the body. This gives embryonic stem cells enormous potential for medical research and cell therapies for a range of conditions, including, e.g., Parkinson’s Disease and Alzheimer’s Disease.  

Scientists are concerned that the verdict, which is legally binding for all EU states, will drive development of stem cell therapies outside Europe.  However, there still exist other territories, such as the US, where no such ban exists.  Earlier this year, the US Supreme Court upheld President Obama’s overturning of the Bush administration’s ban on federal funding for stem cell research, making the US market more attractive than it has been previously. 

The underlying case will now return to the referring German court, which will rule on whether the invention counts as the commercial or industrial exploitation of a human embryo. It is considered likely that the patent will be found to do so and will be invalidated.

The US Patent and Trademark Office will only accept 10,000 or less applications for prioritized examination.  As of October 13, 2011, 254 applications for prioritized examination have been filed in FY2012.

The following are the requirements for requesting prioritized examination.  A Request for prioritized examination that is incomplete on the day of submission will be dismissed. 

• the utility patent application must be filed electronically via EFS-Web (plant patent applications must be filed in paper)
• a Certification and Request for Prioritized Examination must be filed – the USPTO provides form PTO/SB/424 for this purpose
• the application must be complete, i.e., an executed Oath/Declaration must be filed at the time of requesting prioritized examination
• the $4,800 prioritized examination fee must be paid
• any fees due at the time of filing the application, i.e., filing, search, examination, excess claim, excess size, processing, and publication fees, must be paid at that time
• no more than 4 independent and 30 total claims, with no multiple independent claims, may be filed with the application 

Prioritized examination will be discontinued on any application in which a Petition for Extension of Time, Notice of Appeal, Request for Suspension of Action, Interference, or Request for Continued Examination is filed or if the claims are amended to have more than 4 independent claims, 30 total claims, or to include multiple dependent language.  Further, the prioritized examination fee will not be refunded.

Legislative information may be found at http://www.senate.gov/legislative/LIS/roll_call_lists/vote_menu_112_1.htm

The USPTO’s page directed to implementation is found at http://www.uspto.gov/patents/init_events/aia_implementation.jsp

Legislative information may be found at http://www.senate.gov/legislative/LIS/roll_call_lists/vote_menu_112_1.htm

The USPTO’s page directed to implementation is found at http://www.uspto.gov/patents/init_events/aia_implementation.jsp

.XXX (known as “dot triple-X”) is a sponsored top-level domain (sTLD) intended as a voluntary option for pornographic sites on the Internet. The Board of the International Corporation for Assigned Names and Numbers (ICANN), which governs the domain name system for the Internet, voted to approve the sTLD on March 18, 2011. It went into operation on April 15, 2011.

The launch of this .XXX domain comes with a unique opportunity for brand owners, i.e., a time period termed a Sunrise Period (Sunrise “B”) between September 7, 2011 and October 28, 2011, in which brand owners can file to BLOCK their registered marks from being registered with a .XXX domain name. Although this process comes at a cost ($225 per domain name for a 10-year period), it may be worthwhile to block the association of your mark with the .XXX domain. Following this Sunrise “B” Period, it will be necessary for trademark owners to go through a more cumbersome procedure (i.e., Uniform Domain-Name Dispute-Resolution Policy (often referred to as the “UDRP”)) should a cyber squatter attempt to register another’s marks with the .XXX domain.

As a corollary to the Sunrise “Blocking” Period, there are also phase-in periods for owners of registered marks in the adult industry which wish to register their mark in this new domain (Sunrise “A”); a “Landrush”, for nonbrand-owning businesses to register .XXX domain names; and a General Availability period, for anyone to register .XXX domain names on a first-come, first-served basis.

If you would like any assistance in evaluating the impact of this new domain on your business and marks, please contact our offices.

The following YouTubeTM video by ICM Registry provides an additional summary of these changes: http://www.youtube.com/watch?v=hIDKnDSaWqE&feature=player_embedded.

An ultimate vote on H.R. 1249 is expected shortly thereafter.  Provisions of H.R. 1249 are anticipated to be effective ten to fifteen days following signature by the President.  The USPTO is actively preparing to implement the anticipated legislation, and has posted a page dedicated to this process linked HERE.