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One Year Grace Period Changes

Posted Thursday, June 21, 2012 by Mike Cicero

Recently I wrote about the one year grace period that an inventor is granted after a commercial offer for sale of an invention and, more specifically, what developmental stage the invention must be at in order to trigger the one-year countdown (Read “On Sale Bar” here). Currently, 35 U.S.C. §102(b) provides that “a person shall be entitled to a patent unless…the invention was … on sale in this country, more than one year prior to the date of the application for patent in the United States.” In addition to other changes I have written about, the Leahy-Smith America Invents Act brings a significant change to inventors’ ability to seek patent protection after a commercial sale of their invention in that it arguably will eliminate the one year grace period of §102(b) with regard to sales. The newly amended 35 U.S.C. §102(a)(1), which will govern applications filed on or after March 16, 2013, provides that “a person shall be entitled to a patent unless…the claimed invention was…on sale…before the effective filing date of the claimed invention.”

While the newly amended 35 U.S.C. §102(b)(1) will excuse some situations that otherwise qualify as prior art under 35 U.S.C. §102(a)(1), based on a plain language reading sales of the invention by the inventor, even if made one year or less before the effective filing date of the claimed invention, do not appear to be excused from the realm of prior art. 35 U.S.C. §102(b)(1) provides that “a disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection 35 U.S.C. §102(a)(1) if the disclosure was made by the inventor.” Legislative intent aside, the exclusive use of the word “disclosure” creates a high risk that sales, or at least sales which would not enable one of ordinary skill to practice the invention, will qualify as prior art even if made less than one year before the effective filing date. First, current precedent seemingly requires a passing of information to be enabling in order to qualify as a “disclosure.” See Perricone v. Medicis Pharm. Corp., 432 F.3d 1368 (Fed. Cir. 2005). Second, current precedent holds that even non-enabling uses or sales may count as prior art against an inventor. See Lockwood v. American Airlines, Inc., 107 F.3d 1565 (Fed. Cir. 1997). Thus, the one year grace period currently provided by 35 U.S.C. §102(b) regarding sales of the invention is quite possibly nearing an end. This is especially concerning for inventors who may understand the status quo but have had no known reason to examine the new statute.

For this blog I will illustrate how the newly amended statutory language, if interpreted as explained above, will incentivize at least some inventors to apply for patents on inventions that have recently been sold prior to March 16, 2013. This incentive may exist for any inventor who intends to patent an invention which was sold less than one year prior to March 16, 2013. Consider the following hypothetical situation to help illustrate this point.

Tom invents a widget on April 24, 2012, and decides to test the market a bit before seeking patent protection. On May 5, 2012, Tom offers his invention for sale on a popular internet sales site. The offer for sale does not adequately enable one of ordinary skill to practice the invention and, therefore, probably does not count as a disclosure. These facts will remain unchanged and will apply to both situations below.

Now suppose that shortly after Tom offered his invention for sale online the market quickly gained awareness of the newly invented widget and demand was high. By December 25, 2012, Tom has made a handsome profit and decides to pursue patent protection for the widget. He contacts a patent practitioner and an application is filed on March 15, 2013. Because the invention was not “on sale in this country[] more than one year prior to the date of the application for patent in the United States” Tom does not face a statutory bar under the current 35 U.S.C. §102(b). Therefore, subject to additional requirements, Tom is entitled to a patent under the current system.

On the other hand, suppose that Tom’s offer for sale on the internet site did not have immediate success. However, in late April of 2013 a major corporation discovers the widget and is extremely interested in selling it within its sizable distribution channels. The corporation offers Tom a ten percent royalty on any profits it is able to generate by selling the invention subject to the condition that it is granted an exclusive license to practice the patented invention. Tom quickly contacts a patent practitioner and requests for a provisional patent to be filed before May 5, 2013, explaining that he offered the invention for sale on May 5, 2012. Unfortunately, the practitioner explains to Tom that the newly amended 35 U.S.C. §102 applies to all applications filed on or after March 16, 2013, and that the previous one year grace period Tom was relying on no longer applies. Therefore, Tom would have needed to at least file a provisional application before March 16, 2013, but because he did not he is not entitled to a patent for the widget.

This hypothetical illustrates a situation in which a patent applicant is potentially better off submitting an application under the current system.

Ruttler Mills PLLC
One Union Square, 1730, 600 University Street, Seattle, Washington 98101 US
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