This article summarizes the most important patent-related provisions of GATT implementation legislation, as well as those of the recent U.S.-Japan agreement, and then explores the practical implications of the impending changes to the U.S. patent system.
Background
U.S. patent laws are sometimes characterized as being out of step with the international "norm." They are based on a "first-to-invent" system, provide for a patent lifespan of 17 years from issuance of the patent, and maintain the confidentiality of a patent application until it issues. In contrast, the international "norm" is characterized by a "first-to-file" scheme, a patent lifespan of 20 years from filing of the initial application, and publication of a patent application 18 months from its priority date.
The U.S. is not, of course, the only country which is out of step, and international trade and intellectual property negotiations since the mid- 1980s have addressed the issues of patent law harmonization and reform worldwide. The World Intellectual Property Organization (WIPO) began meeting in 1985 with the goal of improving and harmonizing patent laws around the world. In addition, as part of the Uruguay Round of negotiations, which began in 1986, signatories to the General Agreements on Tariffs and Trade (GATT) also attempted to address patent law harmonization. Concurrent with these negotiations, the U.S. Patent and Trademark Office was engaged in trilateral harmonization discussions with the Japanese and European Patent Offices.
These international harmonization efforts prompted the U.S. to evaluate its domestic patent system, both to assess whether the system was serving the interests of U.S. inventors and businesses in promoting technological and economic growth, and whether the system was consistent with evolving international norms. After the investigation, the U.S. announced that it will retain its first-to-invent system and would withdraw from the WIPO harmonization talks. The U.S. did, however, become a party to the GATT agreement and continued its discussions with at least the Japanese Patent Office. It is the impact of both the GATT agreement and an agreement originating from U.S.-Japan discussions that are explored below.
THE AGREEMENTS
The GATT
The GATT includes a trade related intellectual property (TRIPS) sub-agreement which deals with intellectual property issues. In TRIPS, at least two provisions, Article 27 and Article 33, are in conflict with U.S. patent law. Article 27 provides that patent rights must be available without discrimination as to the place of invention. Article 33 provides for a patent term of twenty years counted from the filing date.
In contrast to Article 27, U.S. patent law discriminates based on the country of invention, particularly with respect to establishing a date of invention. Such discrimination is particularly evident in "interference" proceedings to determine the first inventor and in filing an antedating affidavit to overcome a cited prior art reference (filed under 37 C.F.R.2 ' 1.131 ). In both cases only evidence showing a completion of the invention in the United States can be introduced.
In contrast to Article 33, United States patent law provides for a patent term of 17 years from the issuance date.
The U.S.-Japan .Agreement
Under letters of agreement signed on August 16, 1994, between the U.S. and Japan, any U.S. patent filed after January 1, 1996, will be made publicly available 18 months after its earliest priority date. In addition, U.S. patent re-examination procedure is to be expanded to allow for greater third-party participation.
In return, Japan agreed to amend its patent laws to discontinue pre-issuance patent opposition and to allow opposition only after patent issuance. Also, by January 1, 1996, the Japanese Patent Office is to institute a revised system of accelerated examination whereby foreign applicants can request accelerated examination after which a patent application will be processed to grant or abandonment within 36 months.
Patent Reform Legislation
Partly in response to the requirements of WIPO, GATT and the U.S.-Japan negotiations and partly because of efforts in Congress by Sen. Dennis DeConcini (D-N.M.) and Rep. William Hughes (D-N.J.), no fewer than five bills aimed solely at reforming U.S. patent law were introduced during the recently concluded session of Congress.
These bills, in pertinent part, sought to change the term of patent protection from 17 years after issuance to 20 years after filing; to provide a patent infringement defense to commercial users of an invention on a trade secret basis; to revise procedures to reexamine issued patents; to require publication of patent applications; and to implement the patent term and non-discrimination provisions of the TRIPS agreement.
Congress will convene in a lame-duck session after Thanksgiving to consider GATT implementation legislation.
GATT Implementation Legislation
GATT implementation legislation was placed before Congress on September 27, 1994, on a "Fast Track" basis. However, passage has been delayed on procedural grounds and a vote is not expected until December. Nonetheless, it seems likely that the implementation legislation will pass into law. Title V of this legislation deals with Intellectual Property, Subtitle C of which proposes the following amendments to U.S. patent law:
- 35 U.S.C. ' 104 to provide for introduction of proof of inventive activity in any NAFTA or World Trade Organization (WTO) country;
- 35 U.S.C. ' 104 to encourage "discovery" of information relating to the invention in NAFTA and WTO countries, when seeking to prove non-U.S. based inventorship;
- 35 U.S.C. ' 119 and 120 to make allowance for provisional patent applications which can serve as an internal Paris Convention type priority application;
- 35 U.S.C. ' 154 to provide for a 20 year patent term calculated from earliest priority;
- 35 U.S.C. ' 154 to provide for an extension of patent term (up to 5 years) to make allowance for delays under ' 135(a) (Interferences) and ' 181 (Secrecy Orders) as well as for delays caused by appeals to the Board and a Federal Court; and
- 35 U.S.C. ' 271(a) to include "offering to sell" and "importing into the U.S." as patent infringing activities.
Future U.S. Patent Law--Partial Harmonization
If the GATT implementation legislation passes into law in its current form and amendments are made to accommodate the U.S.- Japan agreement, U.S. patent law will be a partially "harmonized" system with the following characteristics:
(i) retention of the first-to-invent, rather than first-to-file system;For both U.S.- and non-U.S.-based patent practitioners, this "new" U.S. patent system will have interesting practical implications. Some of these are addressed below.(ii) encouragement of "reciprocal discovery" in foreign countries;
(iii) a 20-year patent term with possibilities of extension of term;
(iv) provisional applications;
(v) 18-month publication;
(vi) effective post-issuance opposition in the form of expanded reissue proceedings; and
(vii) an expanded definition of patent infringement.
Practical Implications of Changes to U.S. Patent Law
Inventorship
One important implication would result from the U.S. retaining its "first-to-invent" system, coupled with the concept of "to invent" no longer being limited, under 35 U.S.C. ' 104, to U.S.-based inventive activity. Patentees and their counsel will now be faced with an issue that they have largely been able to ignore up until now: the issue of proving inventorship that occurred in a country other than the U.S., years after a U.S. patent application has been filed. Such proof of inventorship may be required during interference proceedings or for the purpose of swearing behind" a reference.
The documentary (or other) proof required to prove invention and reduction to practice may now originate from sources outside the United States. Not only will the net be spread much wider, but the format and language could be very different. For example, U.S. patent practice has shown that one of the best ways to satisfy the burden of proof required to prove "first-to-invent" status is the use of an inventor's notebook. The inventor's notebook is not, however, commonly used in other countries.
Interestingly, the GATT implementation legislation contains two important limitations to establishing the date of an invention in a country other than the U.S. First, patent applicants will be limited to establishing a date of invention no earlier than twelve months after the entry into force of the GATT agreement in the U.S. Accordingly, the issues presented by proof of invention outside of the U.S. should not present substantial hurdles for patent applicants and their counsel for the next few years.
Second, the GATT implementation legislation amends 35 U.S.C. ' 104 to encourage "U.S.-type discovery" in patent proceedings in which a date of invention is at issue. Specifically, if a party requests information about inventions in another country and such information is not made available (to prove/disprove the date of invention) the proposed legislation directs the Commissioner, court or other authority to draw appropriate inferences in favor of the party requesting the information. The consequence of this is that non-U.S. patent applicants may be faced with U.S.-type discovery. As such discovery is generally unheard of in most other countries in the world, the procedures, the burdens, and the advantages that such discovery can provide may be of interest to many non-U.S.-based patent applicants.
Patent Term
In recent years, many companies have been faced with U.S. patents that were issued several decades after the original-applications were filed. These patents, known as "submarine patents," are based on applications which have been kept pending in the U.S. Patent Office for a long period, during which time the technology corre-sponding to such application continues to be developed and evolved into a viable industry. A submarine application then "emerges" as an issued patent to be used against companies using the developed technology.
The proposed change from 17 years from the date of issue to 20 years from the date of filing will have the effect that patents will expire twenty years after the filing date and will substantially reduce the impact of submarine patents.
The change from 17 years from issue to 20 years from the date of filing is, however, not quite as simple as it appears. Firstly, the 20-year term is calculated from the filing date of the first-flied member of a family of patent applications. In other words, continuing applications filed under 35 U.S.C. ' 120, divisional applications filed under 35 U.S.C. ' 121 and a Patent Cooperation Treaty (PCT) application filed under 35 U.S.C. ' 365(c) all carry the filing date of the parent or the parent PCT application, as the case may be. Specifically excluded from this are PCT applications filed under 35 U.S.C. ' 365(a), 365(b), and 35 U.S.C. ' 119.
Accordingly, patent applicants will no longer be able to afford the luxury of dealing with members of a family of divisional applications, resulting from a restriction requirement by the examiner, consecutively. Instead of dealing with the divisional applications one after another, applicants will probably deal with the individual appli-cations simultaneously or, alternatively, will forfeit part of the patent monopoly term. Similarly, the designation of a patent application as a continuing application (continuation, file wrapper continuation, or continuation-in-part) may now have the disadvantageous result of reducing the effective term of protection available to the patentee.
The GATT implementation legislation, however, recognizes that, under certain circumstances, it is appropriate to provide for an extension of term of the patent beyond the 20-year period established. Accordingly, it makes provisions for an extension of the term of a maximum of five years in situations where an interference is declared under 35 U.S.C. ' 135, an application is subjected to a secrecy order under 35 U.S.C. ' 181, and if the issue of a patent is delayed due to appellate review by the Board or by a Federal Court.
In the case of appeals, the period of extension is to be reduced by any time attributable to the review appeal which occurs during the period three years from the filing date of the application. The extension period will also be reduced by a period of time during which the applicant did not act with due diligence. This lack of due diligence will be determined by the Commissioner. This last point is especially significant as it places the burden on the patent applicant to be diligent. Whether or not petitions for extension of time will be seen as lacking diligence has yet to be determined.
Provisional Patent Applications
The GATT implementation legislation introduces an internal domestic priority system under 35 U.S.C. ' 119. This is akin to the "provisional" patent application system that exists in a number of other countries and provides a number of advantages for U.S. applicants.
One major advantage is that it effectively provides for a possible additional one year to the "patent term." The proposed patent term of 20 years from filing is calculated from the date of filing the complete application (i.e. the filing of the provisional application does not start the patent term check). A second advantage is that the application can be filed without claims. In many instances, the preparation of claims can delay the filing of the application by as much as a few months. This would not be necessary if a provisional application is filed.
Although the U.S. is a first-to-invent system, the rest of the world is a first-to-file system. A third advantage, therefore, is that the provisional application system may have the effect of encouraging U.S. applicants to get applications on file as soon as possible, thereby putting them on a more equal footing with respect to obtaining an earlier filing date which is effective in the first-to-file patent systems of the rest of the world.
Finally, it is noted that U.S. applicants are familiar with some aspects of the provisional application system. In many respects, the provisional system parallels the U:S. Continuation-In-Part (C-I-P) procedure. Claims which are based on matter in the earlier (provisional) application will be accorded the filing date of the earlier application and claims based on matter which is new in the later (C-I-P or "Complete") application will be accorded the later filing date. The transition to the provisional patent system should, therefore, not be too disruptive.
Notwithstanding the benefits of the provisional application system, a potential conflict arises in connection with disclosure requirements. In countries where the provisional patent system operates, the disclosure requirements are not as stringent for the provisional as for the complete application. This facilitates the filing of applications with less disclosure, in order to obtain a filing date. The proposed legislation, however, requires that the provisional application should have disclosure which meets all the requirements of 35 U.S.C. ' 112.
There is, therefore, a tension between the basic philosophy of the provisional application (i.e., obtaining an early filing date by describing the concept of the invention and then following up with a complete application which provides the more detailed description) and the current requirements of ' 1 12 as currently applicable to U.S. patent applications.
Publication of U.S. Patent Applications
The 18-month publication provision in the U.S.-Japan agreement will make it much easier to monitor U.S. patent activity. U.S. patent applications currently remain secret until a patent issues. Accordingly, monitoring a competitor's patent activity must be done indirectly by monitoring publications of related non-U.S. patent applications. This indirect information is never conclusive, and a savvy competitor can easily "hide" a U.S. patent application by, for example, filing duplicate applications simultaneously in the PCT and in the U.S.
The chance of being caught by surprise by an unanticipated U.S. patent, whether "submarine" or not, will therefore be substantially reduced by an 18-month publication provision.
Patent Infringement
Finally, the definition of infringement has been broadened to include the activities of "offering to sell" and "importing to the U.S." This broadened definition is in line with the U.S. policy of enhanced protection of intellectual property rights.
Conclusion
Recent international agreements, such as GATT and the U.S.-Japan agreement have led the United States ,to change its patent laws. The United States will, however, retain its "fast-to-invent" patent system, and therefore will have achieved only partial harmonization with much of the rest of the world. Nonetheless, the changes which seem inevitable as a result of the agreements do touch certain fundamental aspects of U.S. patent law and provide both challenges and opportunities for patent applicants.
NOTES
1. Apart from certain enumerated exceptions, 35 U.S.C. ' 104 states:
"... In proceedings in the Patent and Trademark Office, in the courts, and before any other competent authority, an applicant for a patent... may not establish a date of invention
by reference to knowledge or use thereof, or other activity with respect thereto, in a foreign country ...."
2. The U.S. Code of Federal Regulations relating to Patents, Trade-marks and Copyrights.