An Update on US Patent Reform and the Rise of IP Outsourcing

By: Andrews Mark


Global Outsourcing Association of Lawyers (GOAL)

On September 16, 2011, the Leahy-Smith America Invents Act (AIA) was signed into law. The AIA is the first comprehensive overhaul of the U.S. patent system since 1952 and changes many facets of U.S. patent law. A number of key provisions went into effect on March 16, 2013.

Change to a First-Inventor-To-File System

Under the former patent system, an inventor who conceived of a technology first but files a patent application on that technology after a competitor can still be entitled to a patent on that technology. However, the new first-to-file system transitions the patent application process from the first-to-invent system, to the new first-to-file system. With the increased emphasis on the speed of filing, and the opportunities for innovation, the stakes are high for those who fail to understand and take action.

A Broadened Scope of Prior Art

Under the old patent laws, public uses and sales do not act as prior art against a claimed invention unless they occur in the United States. Under the new AIA laws, the scope of prior art is broadened to include publicly available information as of the effective filing date of the claimed invention, without regard to the actual date of the invention. Due to this change, applicants will no longer be able to disqualify prior art available at the time of filing of the application by demonstrating that the actual date of invention precedes the application filing date, and therefore is earlier than the date of the prior art.

A New Post-Grant Review Provisions

The AIA introduced a nine-month post-grant review period after a patent issues. This post-grant review provision was effective as of September 16, 2012, one year from enactment of the AIA, but applies only to patents issued from "first-inventor-to-file" applications filed after March 16, 2013. The new post-grant review process allows companies to challenge patents on any grounds of invalidity during a nine-month window from the issue date of a patent, with an aim of shifting the patent challenging arena from the courts to the USPTO.

The Bottom Line

The law is designed to align US law with the rest of the world, and will speed up patent review and cut down on the backlog of applications. The majority of the cost of a patent remains in the fees associated with having it drafted by a patent lawyer, and some worry that first-to-file will favor big companies that can afford to apply for more patents, more quickly.

The Role of IP Outsourcing

The Legal Process Outsourcing industry can play a key role in helping law firms and in-house counsel to navigate the changing US patent landscape and build a strategic intellectual property program to thrive in a competitive global market. The AIA increases the urgency for patent filing, which can be expensive for large companies and cost prohibitive for smaller ones. In this new patent environment, IP outsourcing can be a competitive advantage for companies of all sizes that can improve competencies and drive down overall costs in patent-related matters.

As US patent holders continue to struggle with the changes made by the AIA and have a desire to contain costs, they are opting to outsource IP work to legal process outsourcing (LPO) providers that have deep experience in US patent filing, foreign filing, annuities and patent translations. Clearly, the LPO model could play an important role in helping inventors and companies protect and commercialize their innovations.

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The Global Outsourcing Association of Lawyers (GOAL) is the world’s first membership-based, non-political international organization for the legal outsourcing industry.

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