Newsletter

The Dispatch

January 1995

In this issue:

U.S. Patent Law Changes in the Wake of GATT Mean Changes in Patent Strategies

Patents Will Last 20 Years from Earliest Filing Date; But New Provisional Applications Help

Effective June 8, 1995, as a result of a law signed by President Clinton in December, a United States patent will expire 20 years after its filing date. The law, passed to implement the General Agreement on Tariffs and Trade (GATT), applies to all patents issuing on applications filed on June 8, 1995 or later. If a patent issues on an application claiming the benefit of the filing date of one or more previous U.S. applications, the twenty years is measured from the earliest filing date in the chain. (The international filing date of a Patent Cooperation Treaty application designating the United States - which might typically be filed by an applicant outside the U.S. prior to filing here - counts for this purpose as a U.S. application filing date.)

What It Means: A Lengthy Pendency in the Patent and Trademark Office Is Penalized

The new law will affect applicants - including many of our clients - whose applications involve technology that is complex and undergoing continuous refinement. The formerly wise strategy of filing, over an extended time period, a succession of continuation-in-part applications containing a large number of claims directed to a wide range of technical approaches must be re-evaluated in light of the shorter patent duration that will result from this approach.

Every person with a pending patent application should give serious consideration to filing one or more divisional, continuation, or continuation-in-part applications during the beneficial transition period, discussed below, ending onJune 7, 1995. Patents issuing on these applications can enjoy a duration of at least 17 years from issuance. A patent issuing on an application filed later can endure only 20 years from the earliest filing date associated with the application.

The Transition: the Greater of 17 Years from Issuance or 20 Years from Earliest Filing Date

For an issued patent that has not yet expired on June 8, 1995 and for a patent issuing on an application filed before June 8, 1995, the duration is the greater of 17 years from issuance or 20 years from the earliest application filing date. Thus patents coming within this transition window that have a pendency in the Patent and Trademark Office (PTO) of less than three years will have their terms extended.

For example, if a patent should issue November 1, 1996 on an application first filed March 1, 1995, it will expire twenty years after its filing date on March 1, 2015 instead of 17 years after issuance (November 1, 2013). If this application falling within the transitional window gets bogged down in the PTO, and does not issue until, say, four years after filing, it will still endure for 17 years from issuance. (These examples assume that maintenance fees are paid and that no terminal disclaimer has been filed that would shorten the patent life.)

Already issued patents having pendencies less than three years also benefit. If a patent issued August 1, 1978 on an application filed April 1, 1977, the patent will no longer expire 17 years after issuance (August 1, 1995), but rather twenty years after filing: April 1, 1997. bsunstein@bromsun.com. Caution: these time extensions apply not only to your patents but also to patents of your competitors!

Another set of provisions of the new law applies to existing patent applications with long pendencies as of June 8, 1995. These provisions permit extending the prosecution of applications (when the prosecution would otherwise be regarded as closed) in order to avoid the loss, of the 17-year floor on the patent term, that would be caused by filing of a continuation application.

Term Extensions for Some Delays in Issuance

The law permits extension of the 20-year patent term for up to five years to make up for delays in issuance caused by a government secrecy order or an interference (contest in the Patent and Trademark Office to determine the owner of rights to an invention that is the subject of conflicting patent applications) or by appellate review in the Patent and Trademark Office or in federal court. When the Patent and Trademark Office is maintaining a rejection of an application, this provision will tend to encourage appeals, which can lead to extensions of the patent term, as opposed to refiling a continuation of the application.

Provisional Applications - A New Tool

Although the new law removed some of the advantages of continuation-in-part applications, it also created, effective on June 8, 1995, a new and valuable legal tool in the form of a provisional application. The sole purpose of a provisional application is to permit the establishment of an early filing date; a provisional application cannot by itself result in a patent. It can confer its filing date on a U.S. or foreign application filed within one year after that date. The benefit of the filing date of the provisional application, however, applies only as to common subject matter that has been adequately disclosed in the provisional application.

Provisional applications have minimal filing requirements. They do not need to be signed and do not need to have claims. The filing fee for a provisional application is $150 ($75 for a small entity). A provisional application will not be examined for patentability, placed in an interference, or made the subject of a statutory invention registration.

Although a provisional application cannot obtain the benefit of the filing date of a previously filed application in the U.S. or elsewhere, it is possible for a subsequent U.S. or foreign application to claim the benefit of the filing dates of any number of provisional applications filed within one year prior to the subsequent application's filing date. A new strategy may be utilized beginning on June 8, 1995, of filing one or more provisional applications, followed within a year by filing of a regular U.S. application and foreign applications (typically under the Patent Cooperation Treaty).

Earlier Invention Dates Can Be Shown In GATT Countries

Inventors domiciled in GATT countries - as well as in North American Free Trade Act (NAFTA) countries - now have the opportunity effective for applications filed on or after January 1, 1996, to show invention dates by pre-filing activities in those countries. The United States patent laws are unusual in granting a patent generally to the one who is first to invent rather than to the one who is first to file a patent application. Under U.S. law, one is deemed to have invented as of the filing date, unless one can demonstrate acts constituting invention before the filing date. Formerly, U.S. patent law permitted only U.S.-based inventors to prove a date of invention before the filing date of the application. Recently enacted amendments permitted invention to be proven also by activities in NAFTA countries. Now under the GATT amendments, inventors in GATT countries as well are put on an equal footing with U.S.-based inventors. To protect their U.S. patent rights, inventors in GATT and NAFTA countries - as well as in the U.S. - should now keep careful written records documenting the conception and reduction to practice of their inventions. The records should be dated and corroborated, preferably by one or more witnesses who understand the invention. The witnesses should, after reviewing the written disclosure of the invention, date and sign each page of the records beneath a notation "witnessed and understood" or words to that effect. Preferably the records are kept as pages in a permanently bound notebook (an inexpensive spiral bound notebook will do) to assure their integrity. Written documentation of invention is of considerable importance, not only in cases where conflicting claims are made to the same invention but also as a way of avoiding certain rejections by the Patent and Trademark Office based on prior art having a publication date after the date of invention but before the priority date.

Possible Reprieve: New Legislation Pending

New legislation (HR 359) introduced in the House of Representatives on January 4, 1995 would amend present law to provide a patent term that is the greater of 17 years from issuance or 20 years from the earliest filing date. In order to obtain approval of the GATT legislation that is discussed in this newsletter, the Clinton administration pledged not to oppose a law amending the patent term in the manner proposed by this legislation of the type now introduced in the House of Representatives. This legislation would also provide for publication of an application if based on an application filed more than 60 months previously. Other legislation has been proposed however, that would provide, as in most foreign countries, for publication of all applications at 18 months after the effective filing date.

If HR 359, or a provision like it, is enacted, the risk of shortened patent duration created by the GATT amendments to the patent laws will be eliminated, since there would then be an available floor of 17 years of life on every patent, regardless of how long the patent was pending before issuance. This return to 17 years of patent protection would offer incentives sufficient to justify for many applicants a return to the pre-GATT practice that makes liberal use of continuations, divisionals, and continuations in part. (But note that the new provisional applications might still be used profitably during the first 12 months of a filing program involving new technology.) Appeals would then be reserved only for exceptional circumstances. Nevertheless, where every minute of patent life is important - particularly in the case of pioneer inventions that can be rapidly commercialized yet carry the potential of a long market life - the prospect of a greater than 17-year life for patents with a shorter than 3-year pendency may still warrant adhering to strategies that keep pendency short.

Conclusion: "File Early, File Often"

Our oft-repeated advice to file early and often has particular relevance after the GATT legislation. First, it will be important to beat the June 8, 1995 deadline. If a pending patent application is likely to be divided up by the PTO (that is, subject to a restriction requirement), then it may be of benefit to patent duration to divide up the application now, before the deadline, by filing appropriate divisionals or continuations in part, so that each resulting patent may enjoy a floor of 17 years of life. (Note that where additional improvements are to be included in a continuation-in-part application, it is a good idea to start now in preparation of the application.)

Second, when the June 8, 1995 deadline is upon us, the new provisional applications will be available. Their low filing costs and benefits with respect to priority make them practical for very frequent and rapid use as technology is enhanced by applicants. The filing of continuation applications after this deadline, however, may become a much less common event, unless HR 359 is enacted. Stay tuned.

Bruce D. Sunstein
bsunstein@bromsun.com

Bruce Sunstein provides strategic advice for development and enforcement of intellectual property rights and for structure and implementation of technology-based business transactions.

The Dispatch is not legal advice. For legal assistance or further information, please call the lawyer with whom you regularly deal at our firm or the authors of these articles.