January 1, 2014

“AIA Prior User Rights,” The Journal of Law in Society, Winter 2014

By Jeanette Berberich, Associate

I. INTRODUCTION

The Leahy-Smith America Invents Act (AIA) introduced numerous changes to the patent system. Some of the drastic, scheme-altering changes, such as switching from first-to-invent to a first-to-file system, will not have substantially changed the current US patent scheme, its options, or the way startups and large firms perceive it.

Through statutory alterations, (2) introductions, (3) and deletions, (4) previously settled controversies are driven back under the microscope to anticipate the ramifications of these changes. (5) It seems necessary, however, to focus on issues that currently exist in Title 35 of the United States Code and hypothesize about the fate of “hot topics.”

Software inventions have yet to find a niche in the patent system or any other intellectual property system for that matter. (6) The recent introduction of business methods as patentable subject matter under 35 U.S.C. [section] 101, (7) and the constant struggle to define how software inventions fit into [section] 101, (8) invites an analogous comparison to the consequences and benefits of software inventions being afforded prior user rights. It has become extraordinarily convenient that the AIA chose to grant such rights. (9)

This Note will explore the major issues software startups must circumvent in order to be successful and dissect the new Prior Commercial Use defense ([section] 273) to patent infringement in the AIA. It will emphasize that one cannot judge a statute by its title. This Note will also suggest new ways to circumvent the structural changes to the US patent system. In addition, it will recognize that the new [section] 273 seems to have been ratified for all the wrong reasons, but may not have a detrimental effect on the inventors and businesses that substantially contribute to our technology hungry society.

Another important aspect explored in this Note is how the solution to the over-regulation of the patent system is to add more restrictive statutes that may or may not have any beneficial effects. Throughout the history of the patent system, and more recently with advancements in software technology, startup software firms have enormous opportunities to be put on the map. It is, however, unfortunate that the patent system alleges it will help small businesses and startups with statute modifications such as the prior commercial user defense, but it never actually does.

II. BACKGROUND

A. Judicial Recognition of Software Patents

The difficulty in defining software patents began with the Supreme Court refusing their inclusion under the umbrella of patentable subject matter, 35 U.S.C. [section] 101. Patentable subject matter is defined under 35 U.S.C. [section] 101 as “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement.” Public policy played an important role in developing [section] 101 into a gatekeeper; it would be contrary to patent rhetoric to grant a monopoly over all uses of something as broad as an algorithm…

The Journal of Law in Society