In January 2012, the USPTO is scheduled to publish a report on the new “prior user rights” provision of the America Invents Act (AIA). The AIA revised Section 273 of the Patent Act to create a defense to infringement for any person who commercially used the invention in the United States in connection with:
- an internal commercial use,
- an actual arm’s length sale, or
- another arm’s length commercial transfer of a useful end result of the commercial use.
- the defense may not be licensed or transferred, other than in connection with an assignment of the entire enterprise or line of business to which the defense relates;
- the defense cannot be expanded to sites beyond those that used the invention before the critical date;
- the defense is not a general license to all claims of a patent at issue; and
- the defense is only available for patents issued after September 16, 2011.
The USPTO conducted a series of town hall meetings and solicited comments on the prior user rights defense. Pros and cons of the new defense that were raised by the comments include:
- the defense instills some fairness into the patent system by not punishing early inventors simply because they chose to not patent the invention (Pro);
- the defense conflicts with a fundamental purpose of U.S. patent law, which is to encourage disclosure of innovation (Con);
- the defense can help companies reduce patent costs by choosing to keep more patents trade secret (Pro or Con, depending on your point of view)
- compare the AIA’s prior user rights defense with similar laws of other industrialized countries;
- analyze the effects of prior user rights on innovation in those other countries;
- analyze the effects of prior user rights on start-ups, venture capital funding, small businesses, universities and individual inventors;
- address constitutional issues, if any; and
- address whether the upcoming change to a “first to file” system creates a need for prior user rights.
Whether or not the new defense has any significant effect is a question that will be addressed when and if parties begin to raise it in litigation. Until then the defense will likely continue to be debated by inventors and non-inventors alike.