As of March 16, 2013, the U.S. is changing from a First-to-Invent (FTI) system to a First-Inventor-to-File (FITF) system. The only countries that have ever used the FTI system were Canada, the Philippines and the U.S. Canada switched to a FITF system in 1989, the Philippines switched in 1998 and the U.S. switched in 2011 (effective as of March 16, 2013). So now the entire world is on a FITF system.

In a first-to-invent system, the prima facie right to the invention is given to first person who invents the actual invention, no matter when the application was filed (subject to proof of the date of invention).

In a first-inventor-to-file system, the right to the grant of an invention is given to the first person (or entity) that files the application, no matter when the invention was invented.

There is some discussion that the change to the FITF system may adversely affect the U.S. economy. One thought is that if a large company obtains knowledge of an invention created by either an independent inventor or a small company (and that entity is actually working on the invention) and that the inventing entity doesn’t have enough money to file for a patent application (or hasn’t yet filed the application), then the large company could file an application for the invention before the inventing entity and thus would own the patented invention.

In an effort to combat this theft, the AIA included a new type of “trial” proceeding that is called a “Derivation” proceeding. However, this only provides limited protection for inventors as the proceeding must be filed by an inventor named in the application. In addition, any such proceeding must also be filed within one year beginning on the date of the first publication of a claim to an invention.

So, what option does that independent inventor have if a large company steals their invention? I would go to one of the IP litigation firms, provide my proof, and hope that they would take the case on a contingency basis. If there was enough proof to support the alleged “theft” then I don’t see why a litigation firm wouldn’t take the case. But note that since I don’t work in litigation anymore, this is only a guess.

Since it doesn’t matter what my personal feelings are about this change, it is a fact and we need to learn how to work with it. So, how is this change going to affect how we (i.e., IP support personnel) do our job? The answer is not all that much.

The most important issue that we need to be aware of is the fee changes – in particular, we need to determine the entity size of the applicant as the fees depend, as usual, on the applicant size. As of March 19, 2013, there are three entity sizes in the U.S. patent world:
     1. Large entity;
     2. Small entity; and
     3. Micro entity.
I’m not going to define large or small entity as we should all already know the difference :-). However, the micro entity is new and has a very complicated definition, which is:
     (1) the applicant qualifies as a “small entity” as defined in CFR §1.27;
     (2) neither the applicant nor the inventor nor any joint inventor has been named as the inventor on more than four previously filed applications, not including:
          a. applications filed in another country;
          b. provisional applications under 35 U.S.C. §111(b), or
          c. international applications for which the basic national fee under 35 U.S.C. §41(a) was not paid;
     (3) neither the applicant nor the inventor nor a joint inventor, in the calendar year preceding the calendar year in which the applicable fee is being paid, had a gross income, as defined in section 61(a) of the Internal Revenue Code of 1986 (26 U.S.C. 61(a)), exceeding three times the median household income for that preceding calendar year, as most recently reported by the Bureau of the Census; and
     (4) neither the applicant nor the inventor nor a joint inventor has assigned, granted, or conveyed, nor is under an obligation by contract or law to assign, grant, or convey, a license or other ownership interest in the application concerned to an entity that, in the calendar year preceding the calendar year in which the applicable fee is being paid, had a gross income, as defined in section 61(a) of the Internal Revenue Code of 1986, exceeding three times the median household income for that preceding calendar year, as most recently reported by the Bureau of the Census. See also §1.29(h)

The trick is to find out what the “gross income” is in (3) above. Currently, there is speculation that the amount will be $50,054, which is the 2011 median household income as specified by the census bureau. However, I won’t confirm that this is the correct dollar amount – I’m sure that the PTO will issue a notice with the correct amount before March 19, 2013 (the current fee schedule expires on March 18, 2013, so the assumption is that the micro entity fees will become active as of March 19, 2013).

The other aspect of our world that will change will be the revised “trial” procedures by the Patent Trial and Appeal Board (PTAB). There are several different trial procedures which can be filed against patents, depending upon when the application was filed, when it was granted, etc., which I won’t review in this blog.

Other than the fees and new trial procedures, I don’t think that this implementation will affect our world much at all. But we’ll have to wait and see.

See you next time!