America Invents Act: An Expert’s View

Friday, October 21, 2011 - 11:19

The Editor interviews Joseph Capraro, Partner in the Patent Law and Intellectual Property Groups of Proskauer Rose LLP’s Boston office, where he leads the patent and trademark prosecution and technology licensing groups. 

Editor: Please tell us about your professional background. 

Capraro: After graduating with a bachelor’s degree in electrical engineering in the mid-'80s, I worked as an electrical engineer for five years in the defense electronics industry. In 1990, I made a transition to the law, working in a law firm while attending night law school. I have been a practicing attorney for about 18 years now. Starting my career at a patent boutique, I transitioned to a general practice law firm, Testa, Hurwitz & Thibeault LLP, in 1992 and became a partner in the Intellectual Property Department in 2000. In 2004, I opened Proskauer’s Boston office with two other senior attorneys from the Testa firm.  

Editor: What are the key changes in patent prosecution, disclosure of patentable innovations, and patent litigation that the new law presents? 

Capraro: There will be many changes under the new law. That said, there are two ways to look at the problems that the system attempts to remedy – from the litigation perspective and from the prosecution perspective. 

From a litigation perspective, some of the key areas of change are a joinder of parties in lawsuits, false patent marking, virtual patent marking and the prior commercial use defense. 

For joinder, under the new law, a plaintiff who is suing several different parties under the same patent must show a meaningful connection between the parties and the patent. It is no longer permissible to sue numerous parties in a single suit whose only connection to one another is the alleged violation of a patent. 

Regarding false marking, the new law limits who can file a false patent marking lawsuit to those competitors of the defendant who can show they’ve been injured by the act of false marking. In addition, expired patents has been eliminated as a potential false marking violation; the new law limits these suits to unexpired patents. 

Virtual patent marking is a concept that really brings the U.S. patent system into the 21st century in that it enables parties with patents to refer to a website associated with their products to enable third parties to understand which patents apply to a specific product. 

The prior commercial use defense existed prior to this new law, but in a much narrower, more limited form. Previously, the defense could only be used against patents covering methods of doing business. Under the new law, the defense is not longer so limited.

On the prosecution side, there are many changes under the new law. The most famous one is the first-to-file change, where patents will be awarded to the first to file a patent application rather than the first-to-invent, conforming the U.S. system to the rest of the world. 

Post-grant review is part of a package of reexamination proceedings that the U.S. patent office will be required to implement under the new law. The easiest way to understand post-grant review is to think of how oppositions are conducted in Europe. Under the new law, post-grant review is a nine-month period during which third parties can seek to have a recently issued patent reviewed again.

The inter partes reexamination process has been revised and renamed inter partes review. The standard of proof for this form of reexamination, as well as other aspects of the process, have been changed in part to be consistent with the fact that a post-grant review will generally precede the inter partes reexamination proceeding. 

Business method review is a transitional reexamination procedure, becoming a viable option for only eight years from its implementation in September 2012 (until 2020). This procedure is designed to allow third parties to challenge questionable business method patents, enabling these parties to challenge business method patents after they have been either threatened or sued. Supplemental review is a process by which a patent holder can put his patent back into the U.S. patent office to resolve issues that could potentially lead to an inequitable conduct charge, so it is a proactive measure that benefits patent owners.  

Editor: Is the speed with which patents can be granted also an objective? 

Capraro: Yes. The speed with which patents can be granted should be a direct result of the funding aspects of the law. If implementation goes the way the U.S. patent office hopes, the office will have more funds, enabling it to hire more examiners, who, in turn, can increase the throughput of the office and the speed by which an application goes through the patent office. 

Editor: Do you believe the reforms will make significant changes to the system and the way patent law is practiced? Will the changes bring about efficiencies, or do you see an endless stream of modifications of patent applications in an effort to overcome early flaws in rushed applications? 

Capraro: The short answer to your first question is yes. The reforms will make significant changes to the system and the way we practice patent law. This process of change will take place over many years because the law has a three-stage implementation period over 18 months. In terms of what those changes will mean, there clearly will be a learning curve. Thinking of the bigger picture, I don’t see the process of prosecuting under the new law as one that will create inefficiencies or flawed, rushed patent applications. The fact is that most practitioners have dealt with the first-to-file concept for many years by virtue of working with clients that file in Europe or Japan that have opposition-based systems. The new law will change behavior, but in general it should not radically impair the quality or content of patent filings. 

Editor: How do you think that the patent law reforms will impact small inventors dependent on venture funds and others unschooled in making early applications? 

Capraro: The first-to-file system will impact all inventors because the system emphasizes filing date as opposed to date of invention. The inventor looses the benefit of taking the desired amount of time to test the invention, while having the comfort of being able to get a patent in the long run. First-to-file will change behavior for both large and small companies. Those entities with limited funds will be impacted more dramatically, but the proper use of provisional patent filings, which can be much less expensive and give the inventor a one-year period to further develop the product while the provisional patent is pending, will buffer the issue of being first to file. Under the new system, the use of a prior publication (generally preventing another party from filing a patent application for a similar invention) and the modified grace period will benefit small inventors as well as large entities. These are some of the measures in the new law that will help the small inventor who is still testing and attempting to value his invention. 

Editor: What ambiguities in the legislation need to be clarified in terms of sharing information with potential investors? 

Capraro: It is very early in the process so there are many ambiguities in the statute that patent practitioners will be watching closely in terms of how they’re dealt with in the courts and in the patent office. These issues will hopefully be clarified as the courts issue decisions and as the patent office issues rules and comments on changes in prosecution proceedings. One current example is use of the term “disclosure,” which is a key part of the new law and is not defined anywhere in the statute. 

Editor: What changes will now result in the way business method patents are handled? 

Capraro: There are a two major ways that business method patents will change: First, tax strategies will not be patentable subject matter, at least insofar as the tax strategy itself cannot be the primary basis for the patent claims. Second, post-grant review will be implemented specifically for business method patents, but only for an eight year transition period. The period was set up primarily to clean up the number of alleged weak or potentially invalid business method patents that were granted by the patent office over the past several years. 

Editor: How has the new reform expanded the prior use defense? 

Capraro: The defense has been broadened significantly. Under the prior law implemented in 1999, the defense was limited to business methods. An accused party who could prove that its use of a particular business method preceded the critical date of the patent-in-suit by more than a year, could continue to practice what they had been practicing prior to the patent being granted. The new law has a broader scope, extending the defense beyond business method patents to include any process, any machine, manufacture or composition of matter that is used in any manufacturing or other commercial process. What those specific terms mean and the meaning of a defense in the context of litigation will be decided by the courts over time. 

Editor: How has the recent reform changed your current practice? What has been the response from clients? 

Capraro: The reform has changed the way I practice in a few specific ways, in part, because the aspects of the law that were implemented immediately are really a subset of the overall set of changes. Obviously, I expect many more significant evolutionary changes in my practice over time as the other phases of the law become effective. But, in the near term, clients have been most interested in prioritized examination, and the one year period during which a party’s patent application will be prosecuted to a final disposition. This is a new program, of immediate importance to our clients, particularly inventors who wish to move their inventions quickly through the patent office. The patent marking and false marking concepts have been areas of discussion, necessitating advice and change on client websites and client products. 

In general, our clients are pleased with patent reform to the extent that it is focused on improved patent quality, shortened examination time and limitations on litigation brought by non-practicing entities. Clients are generally seeking advice and guidance at this stage to determine how to change internal patent processes to conform with the changes in the law. 

Editor: How, if at all, will patent law reform impact job creation? 

Capraro: If the patent office is allowed to retain more of its fees under the new law, it will have the opportunity to hire more examiners, perform more training and generally improve throughput. All of these measures will, hopefully, produce more examiner jobs. 

Please email the interviewee at jcapraro@proskauer.com with questions about this interview.