On September 16, President Obama signed the first major changes to patent laws in nearly three decades. The new law substantially affects the way that patents are procured and enforced, making familiarity with the changes essential for manufacturers and component suppliers with patented products or processes. Provisions of the law will take effect Sept. 16, 2012.

Systematic changes made by the law can be expected to have an extensive impact on patent practices, both offensive and defensive, for the trailer manufacturing industry. The overall effects of the law should increase the value of patents over time while increasing the speed and quality of action at the Patent Office. The race to the Patent Office to get new patents should continue and accelerate. It remains unchanged that any time new equipment or software is developed, manufactured or purchased, patent issues are raised for the developer, manufacturer and buyer.
A key component of the law is a change from the current “first to invent” to a “first inventor to file” system. The inventorship requirement remains – meaning patents will continue to be awarded only to inventors or those with an ownership interest derived from inventors.

The new law also establishes new proceedings in which the validity of issued patents may be challenged. Such challenges can take the form of inter-parties review or post grant review – a new avenue for business method patents is not likely to be applicable in the trailer industry. Generally, an inter-parties review may be initiated against a wide range of patents over a large time window, though only under a limited range of grounds.  A third party may file a petition for review any time after nine months from the issuance or reissuance of a patent. Grounds for such a petition are limited to obviousness or lack of novelty. Proceedings may be initiated by anyone other than the patent owner and both the petitioner and patent owner are permitted to provide expert declarations, evidence and opinions for consideration by the Patent Trial and Appeal Board. The patent owner is also afforded an opportunity to file to amend the patent for each challenged claim and the petitioner bears the burden of proving each claim to be invalid by a “preponderance of the evidence.” Decisions of the Patent Trial and Appeal Board may be further appealed to the U.S. Court of Appeals for the Federal Circuit.

Post-grant reviews are a new administrative proceeding with similar procedures as described above. While this system applies to a smaller number of patents over a much smaller time frame, it also allows many more grounds for invalidity. A third-party must file a petition for review within nine months of the issuance or reissuance of the patent in question. Generally, grounds for invalidity include lack of novelty, obviousness, subject eligibility and lack of written description. The procedure for this type of review will be defined in large part through a regulatory rulemaking process, but instructions in the law are quite similar to those described under the earlier challenge system.
A new tool for patent owners is a supplemental examination proceeding which may be used to bolster the strength of their patents. Based on the owner’s request, the U.S. Patent & Trademark Office (USPTO) will be able to “consider, reconsider or correct information believed to be relevant to the patent”. Such supplemental examinations can be used to remove issues that might render the patent unenforceable.

Also created under the new law is an infringement defense based upon prior commercial use. Subject matter covered in this portion of the law includes any process to “machine, manufacture, or composition of matter used in a manufacturing or other commercial process.” Some limits and requirements exist for utilization of this defense, so it is an element with which manufacturers will want to be familiar.

USPTO is also permitted under the new law to increase the fees associated with most patent applications by 15 percent. Electronic patent filings are encouraged through a new $400 surcharge on paper filings. The increase in fees is intended to provide additional funding for USPTO to hire additional examiners and decrease the delay in patent application processing. It remains to be seen whether that will be effective, however, as Congress will continue to maintain discretion to divert surplus funds for other government uses.

In summary, the new law will have significant and long-lasting ramifications for the U.S. patent system. Users of the system in the light- and medium-duty trailer industry should be aware of the changes, their effective dates and the types of patents and applications covered by the provision. Potential applicants should understand the new “first inventor to file” system and the associated benefits of early disclosure. Owners of existing patents should consider the benefits offered by the new supplemental examination provisions. Potential and actual infringement defendants should be familiar with the new defenses and proceedings the law offers. As always, the most important thing manufacturers can do is be informed and where necessary, seek out expert counsel to protect and advance their companies’ interests.

Stephen Glazier is a partner and Dennis Potter is a government affairs analyst at the law and lobbying firm of K&L Gates, where they represent NATM and other clients on legislative, regulatory, policy and political matters.  Glazier has extensive expertise in patent and technology matters and is the author of three books on patent strategies.  Potter has been involved in legislative matters at K&L Gates since 2002.  Glazier can be reached at
stephen.glazier@klgates.com and Potter can be reached at dennis.potter@klgates.com.