Derivation Proceedings

A derivation proceeding is a new proceeding that applies to claims with an effective filing date on or after March 16, 2013. Even though U.S. patent law is now a first-inventor-to-file (FITF) system, derivation proceedings were created to ensure that the first person to file the patent application is actually the true inventor. The 2011 America Invents Act (AIA) amended 35 U.S.C. § 135 to eliminate patent interference proceedings except to the extent that they are limited to the issue of derivation. Derivation proceedings will eventually replace interference proceedings, but interferences will continue to apply to any patent claim filed prior to March 16, 2013.

Filing the Petition

What may be challenged? The true inventorship of a patent or patent application containing one or more claims having an effective filing date on or after March 16, 2013.

Who can bring? An inventor who is not the first to file a patent application may file a derivation petition with the USPTO to challenge an earlier applicant’s right to a patent if the inventor can show her invention was derived by the person who was first to file. Only an applicant for a patent may file a derivation petition; therefore, the petitioner must file a patent application before or with a derivation petition.

Timing? The petition must be filed within one year of the first publication of a claim to an invention that is the same or substantially the same as the first true inventor’s claim.

Cost? The fee for filing a petition for a derivation proceeding is $400.

Statutory and regulatory requirements a petitioner must meet in a petition for a derivation proceeding? In a petition for a derivation proceeding, the petitioner must by statute: (i) set forth with particularity the basis for finding that an individual named in an earlier application as an inventor derived an invention from an individual named in the petitioner’s application as an inventor and (ii) show the earlier application claims the invention of the petitioner’s application without authorization. The petition must be accompanied by a fee. By rule, for each of the claims to the derived invention, the petition must (i) show why the claimed invention is the same or substantially the same as the invention disclosed in the earlier application and (ii) identify how the claims are to be construed. Also by rule, substantial evidence, including at least one affidavit addressing communication of the derived invention and lack of authorization that, if unrebutted, would support a determination of derivation must be included. The showing of communication must be corroborated.

The Proceeding

Before who? Derivation proceedings are held before the Patent Trials and Appeals Board (PTAB). Each case will be heard by a panel of three technically-trained, patent-savvy judges in a single-phase trial that is similar to an inter partes review proceeding or post-grant review proceeding.

Respondent Preliminary Response? The respondent has a right to file a preliminary response to the petition, within a time period set by the Director, that sets forth the reasons why no derivation proceeding should be instituted based on failure of the petition to meet any requirements. The respondent may also a motion to amend. The petitioner must file a reply and opposition to any amendment filed by the respondent.

If the respondent does not file a file a preliminary response or amendment, the respondent must arrange a conference call with the PTAB.

Burdens and Standard for challenge? To prevail in a derivation proceeding, the petitioner must provide “sufficient evidence” to prove a claim of derivation.

Discovery? Like the old interference proceedings, derivation proceedings are contested cases between two parties with limited discovery available. The Rules of Practice for contested cases, which govern discovery in contested cases, applies to the new derivation proceedings, and because those Rules of Practice explicitly state that a party requesting additional discovery must show that such additional discovery is in the interests of justice, it appears that the “interest of justice” standard followed in those decisions will be used by the PTAB in deciding requests for additional discovery in Derivation proceedings.

How does a derivation proceeding conclude? Where a derivation proceeding is instituted and not dismissed, the PTAB shall issue a final written decision. The Office may cancel patent claims or finally refuse claims of an application that cover the derived subject matter. Under “appropriate circumstances,” the PTAB can correct inventorship of any application or patent at issue in a derivation proceeding. In addition to deciding whether the respondent derived the invention from the true inventor, the PTAB may also consider issues of patentability that arise in derivation proceedings when there is “good cause” to do so.

Settlements? The AIA permits the parties to a derivation proceeding to settle. To terminate the proceeding via settlement, a written statement reflecting the agreement of the parties as to the correct inventor of the claimed invention in dispute must be filed with the USPTO. Unless the PTAB finds the agreement to be inconsistent with the evidence of record it will take action consistent with the agreement.

Arbitration? The AIA permits the parties to a derivation proceeding to arbitrate. The parties must give notice of any arbitration award to the USPTO. The PTAB is not bound by, and may independently determine, any question of patentability. The PTAB may determine issues the arbitration does not resolve.

Rehearing requests? Either party may request rehearing of the Board’s decision. The request must specifically identify all matters the party believes the Board misapprehended or overlooked, and the place where each matter was addressed in the petition.

Post-Proceeding

Appeal? Dissatisfied party may appeal in district court or directly to the Court of Appeals for the Federal Circuit.

Patent term adjustment? The term of a patent issuing on an application that was involved in a derivation proceeding may be adjusted to offset the delay in issuance due to the derivation proceeding.

Practice Tips

  • Parties should modify their record keeping procedures to prepare for the new derivation proceedings.
  • Records of evidence of conception, reduction to practice, and witnesses who can corroborate such evidence should be maintained.
  • Need to maintain more vigilant records of those individuals who have had access to inventions prior to patent application being filed on those inventions. Such records will be a vital part of the evidence needed to prove that the inventor(s) of an earlier-filed application derived their invention from true inventors.
  • Interference proceedings will continue to apply to any patent claim filed prior to March 16, 2013.
  • In addition, for applications with an effective filing date before March 16, 2013, where an interference proceeding is a real possibility, applicants must be careful to not insert claim limitations that would not be entitled to that earlier effective filing date. Doing so will destroy any eligibility for an interference.

 

Derivation Proceeding Fast Facts

What is challenged?
  • The true inventorship of a patent or patent application containing one or more claims having an effective filing date on or after March 16, 2013
What is submitted?
  • Prior art submitted may be any patent or printed publication
  • A concise description of why each reference is relevant to the application must also be included
When can you file?
  • Within one year of the first publication of the challenged claim(s)
Who can file?
  • An inventor who is not the first to file a patent application may file a derivation petition to challenge an earlier applicant’s right to a patent
  • A petitioner must file a patent application before or with a derivation petition
What are the fees?
  • The fee for filing a petition for a derivation proceeding is $400
Discovery
  • Discovery is limited, as it is with old interference proceeding
  • A party requesting additional discovery must show that such additional discovery is in the interests of justice
Settlement
  • The parties may settle. To terminate the proceeding via settlement, a written statement reflecting the agreement of the parties as to the correct inventor of the claimed invention in dispute must be filed with the USPTO
Arbitration
  • The parties may arbitrate and must give notice of any arbitration award to the USPTO
  • The PTAB is not bound by, and may independently determine, any question of patentability
  • The PTAB may determine issues the arbitration does not resolve
Board’s decision
  • The petitioner must provide “sufficient evidence” to prove a claim of derivation
Appeals
  • Either party may request rehearing of the Board’s decision
  • Dissatisfied party may appeal in district court or directly to the Court of Appeals for the Federal Circuit
Patent term adjustment
  • The term of a patent issuing that was involved in a derivation proceeding may be adjusted to offset the delay in issuance due to the derivation proceeding