End of the One Year Grace Period

Under current law, applicants are given a year to try to sell or commercialize their invention before they have to get a patent application on file. This is particularly of benefit to small inventors and startups who may want to see if there is any demand for their invention before they commit funds to the patent process.

Under the America Invents Act, strongly supported by Microsoft and IBM, the one year grace period will be much more limited. Inventors will have a one year grace period for their own disclosures, or disclosures of joint inventors. But what happens if someone else publishes something similar the next day? There is no grace period for that and patentability is barred. By the time the inventor learns about the publication, it is too late to file a patent application. Thus, inventors who file under the new system should assume that there is no grace period. They should file something before seeking venture capital or disclosing their invention.

The U.S. Patent and Trademark Office has published proposed rules relating to the new first-to-file system. Under the new rules, third party disclosures and patent applications are not prior art if the subject matter disclosed had previously been disclosed by the inventor.

In the proposed rules, only exactly identical third-party disclosures are precluded by the prior inventor disclosure exemption.

Even if the only differences between the subject matter in the prior art disclosure that is relied upon under 35 U.S.C. 102(a) and the subject matter publicly disclosed by the inventor before such prior art disclosure are mere insubstantial changes, or only trivial or obvious variations, the exception under 35 U.S.C. 102(b)(1)(B) does not apply.

Thus, if an inventor discloses an invention and subsequently a third party independently discloses a trivial variation on January 2, the third party’s disclosure is not excluded from prior art. This renders the invention unpatentable as obvious.

Patent reform is likely to benefit larger multinational companies that have monopoly or near-monopoly positions, who don't need patents and are often accused of stealing other people's ideas, and will hurt the start-ups that create the jobs in this country. Patents have been the one tool to help Davids battle the Goliaths, but there are endless efforts underway to weaken the patent system.

The first-to-file rules should become effective March 16, 2013.