US House of Representatives creates uncertainty in America Invents law reforms

Further to our post on 10 March 2011, in which we discussed the passing by the US Senate of the America Invents Act of 2011 (“Senate Bill“), the US House of Representatives has now passed the America Invents Act of 2011 (“HR Bill“). 
The HR Bill has maintained most of the key aspects of the Senate Bill, including the transition of the US patent system from a first-to-invent to a first-to-file system, and the prevention of fee diversion.  However, the HR Bill differs from the Senate Bill in the following important respects:

  • Post-grant review.  Like the Senate Bill, the HR Bill allows third parties to challenge the grant of a patent through a new inter partes review.  However the HR Bill proposes a lower threshold and allows post-grant review where there is a “substantially new question of patentability”.  The Senate Bill proposed a higher standard, such that post-grant review would only be available where there is a “reasonable likelihood that the petitioner would prevail with respect to at least once of the claims challenged in the petition”, the Senate Bill also limited the grounds of post-grant review to issues relating to novelty and inventiveness.  US commentators have expressed concern that the lower standard proposed in the HR Bill may result in frivolous requests for post-grant review, which may unnecessarily drive up patenting costs.
  • Prior Use Defence.  With the transition to a first-to-file system the spotlight has been placed on the use of an invention before grant and the possibility of a defence to infringement.  The Senate Bill limits this prior use defence to inventions for “business methods”, whereas the HR Bill broadens this defence to include all patents with the exception of those developed using federal funds or solely by a university.  US commentators have raised a concern that infringement disputes will become substantially more expensive, and more uncertain, if a prior use defence is applied to avoid infringement.

The Senate will now consider the HR Bill.  If the Senate does not pass the HR Bill in exactly the same terms as the House of Representative, then a joint committee of the House of Representatives and the Senate will meet to draft a version of the bill to be presented to President Obama for signing or veto. 

It seems unlikely that the America Invents Act of 2011 will become law soon.

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