Laws & Processes

America Invents Act (AIA): All you need to know

The AIA is a United States federal statute that closely resembles previously proposed legislation in the Senate, i.e. Patent Reform Act of 2009. Named after its lead sponsors, Sen. Patrick Leahy (D-VT) and Rep. Lamar Smith (R-TX), the Act is a United States federal statute that closely resembles previously proposed legislation in the Senate, i.e. Patent Reform Act of 2009. Its central provisions went into effect on September 16, 2012 and on March 16, 2013.

There has been a debate on the effect of AIA on Startups. Some feel that the AIA would prevent startup companies, which are a dominant source of innovation, from attracting investments. There are others who believe that the act provides several benefits to small businesses such as expedited patent examination, fee reductions, etc.

The AIA has increased the number of patent applications filings and created a race to patent first their inventions quickly. Due to this hurry, the average quality of the patent applications has decreased. However, it is hoped that the AIA will speed up the process to get a patent, encourage innovation and create jobs in the long run.

The AIA has made several significant changes to the previous system. Here is a summary explaining the most important ones:

  • First to File Provision: The party which files a patent first will be granted the rights even if it was invented by someone else earlier. Thus, making it more important to file an application as soon as possible. This became effective from March 16, 2013.
  • Limited One-Year Grace Period: It applies only to disclosures made or authorized by the inventor or to information obtained from the inventor. Therefore, if somebody other than the inventor made the same disclosure before the filing of the application, then such disclosure will act as prior art.
  • False Marking: The patents which are expired or pending for approval should be shown with their status of expiration.
  • Virtual Marking: A patent owner can mark his goods or services as “Patented” or “Pat.” and provide a web address listing the patent number associated with the goods or services.
  • Reexamination: The standard for reexamination has been changed to “a reasonable likelihood that the requestor would prevail” from “a substantial new question of patentability” for at least one of the challenged claims.
  • Fee: AIA reduces the basic utility fee, search fee, issue fee for the patents. However, a 15-percent surcharge has been added to all patent-related fees, including patent maintenance fees.
  • Best Mode: A patent may not be cancelled based on inventor’s failure to disclose “the best mode” of his invention before the effective filing date.
  • Prior user right: If an individual is using an invention for more than a year before the second inventor files for a patent on the same invention, then the user can continue using the invention in the same way after the second inventor is granted a patent.
  • Non-Patentable Subject Matter: The AIA prohibits granting patents for tax strategy and human organisms. This provision does not apply to previously issued patents. This became effective from September 16, 2011.
  • Penalty for Paper Filing: There is a $400 fee for filings made by non-electronic means to electronic filing patent application.
  • Third Party Submission: The AIA allows a person to submit any patent, publication relevant to pending patent application with an explanation for the patent.
  • Micro Entities: The Act adds a Micro Entity Status, which gets a 75 percent reduction in the fees charged by the USPTO. Micro entities include inventors with incomes less than three times the median household income and who have not been named as inventors on more than four previously filed non-provisional U.S. patent applications.
  • Inventor Oath: The new law allows an organization or individual to file an application without a declaration that the invention was made by him. This became effective from September 16, 2012. 
  • Pre-Issuance Submissions: Once a patent application is published, third parties may submit information about prior arts with a statement of relevance to the USPTO. The third party can be anonymous. This became effective from September 16, 2012. 
  • Post-Grant & Inter Partes Review: Both provisions allow a separate party to submit evidence against the validity of any claims in an issued patent. The separate party has to prove its case, and the patent owner has the right to make amendments or cancel the claims. Post Grant review request must be filed no later than nine months after the date of issue while the Inter Partes Review request must be filed nine months or later after the patent has been issued. This became effective from September 16, 2012.

 Amendments to the AIA

H.R.9 (Innovation Act): In February 2016, the Senate Committee on Small Business and Entrepreneurship held a hearing on H.R.9 and also approved it for consideration. H.R.9 will amend title 35, United States Code, and the AIA; this bill aims to reduce patent trolls, lengthy IP litigations and inane attempts by legal holders of patents through limitations on Post Grant Reviews. Among other modifications, it would also change fee requirements, in order to make the plaintiff financially responsible for such attempts.

S.1137 (Patent Act): In June 2015, the Committee also approved the Patent act for advancement to the House and Senate floor. S. 1137 is also an intended amendment to the AIA, and has a similar purpose. The bill would require the patent owners to supply important information on the type and extend of the patent claim before filing a lawsuit in a district court.

 The Before and After (Quick Comparison):

Criteria After AIA Before AIA
Priority Claim First to File. First to Invent.
Authority The USPTO Director is given the authority to set and adjust the patent and trademark fees. Congress controls the general authority to set patent and trademark fees.
Fees Same for small entities and reduced by 75% for micro entities. Fees reduced by 50% for small entities.
Best Mode Failure to disclose the prior art is invalid from the effective patent date. Failure of the patent application if prior art is not in best mode given.
Obviousness Obviousness is considered at the time of effective filing date. Obviousness is considered at the time of invention.
Grace period One year grace period for inventor’s own disclosure. Grace period is one year for all the disclosures.
Human Organism Patents Prohibits granting patents for human organisms. Not applicable.
Disclosure of Prior art Disclosure is applicable after the effective filing date. Prior Art is to be disclosed at the time of invention.
False Marking False Marking was completely abolished. Patents with expired date are published by False Marking.
Filing by other than inventor An entity can file an application on behalf of an inventor. Not Possible earlier.
Prior user rights defense If an individual is using an invention for more than a year before the second inventor files for a patent, then the user can continue using the invention. Not Possible earlier. Either the individual had to stop using the invention or take a license from the second inventor or they could have sued him for infringement.
Micro-entity The AIA added a micro-entity status with 75% fee reduction. Only Small entities available with 50% fee reduction.

Citius Minds is a technical consulting firm based out of Chicago. We provide specialized patent analytics and litigation services to patent professionals across the globe. We are highly appreciated and loved by our clients for the following service offerings:
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  1. There is apparently a lot to know relating to this. I assume you collected all those points in one place. Thanks.

  2. The First-to-File provision over First-to-Invent doesn’t make sense to me but I think that helps solve a lot of problem.

    1. Why does this have to be the ONLY reliable source? All my questions are answered here. Thank you so much.

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