Derivation of inventions: new proceeding under the AIA will expand ways patents may be attacked


Financier Worldwide Magazine

March 2013 Issue

March 2013 Issue

Historically, the US has been an outlier when it comes to certain aspects of its’ patent laws, in large part due to traditions predating the Constitution. In 2012, Congress enacted the America Invents Act (AIA) which provided an overhaul of the patent laws, attempting to bring the US system closer to international practices.

The US requirement that a patent applicant be in the name of the inventor has always been different from the standard used by the rest of the world, which instead applies a ‘first-to-file’ rule under which any party can secure a patent provided it is the first to apply for a patent on the technology, thereby establishing a race to the patent office among applicants. The unique US rule that an applicant be an inventor of particular subject matter is retained by the AIA. However, under the AIA, there is a conversion from the US’s tradition of awarding patents to inventors based upon a ‘first-to-invent’ standard, in favour of a ‘first-inventor-to-file’ standard that will apply from 16 March 2013 going forward. Over time this change will gradually phase-out interference practice, a specialised adversarial administrative proceeding unique to the US, that seeks to determine the first inventor of contested subject matter.

Under the current first-to-invent system, if two inventors independently filed patent applications for the same invention, a complex evidence-based proceeding is initiated, that serves to determine as a matter of law, which of the parties conceived of the invention, and diligently reduced the invention to practice. To the winner goes all of the legal rights to the invention. Under the AIA, a far-simpler standard will apply – the first inventor that files a patent application on an invention will secure the property rights to that invention. Proponents of the AIA cite this change as encouraging early disclosure of inventions, while providing inventors (and their employers) much needed predictability in an IP based economy.

A major drawback to any system that rewards the first applicant (i.e., the coming US standard or the current international one) is that a party could learn of the inventor’s idea and then beat the inventor to the Patent Office, thereby securing property rights in the invention even as to the actual inventor. Outright trade secret theft, or even a far-less nefarious situation involving loss of rights based on unintentional derivation, is a significant threat in today’s collaborative environment where vast amounts of data are shared instantaneously amongst investigators, some of whom may reside outside of the US. To protect an inventor, the AIA created a new mechanism for the rightful inventor to challenge an improper first-filer through a derivation proceeding.

Under the AIA, derivation proceedings will ensure the patentee, and not another person, is truly the inventor of a particular patented technology. There are strict time constraints for asserting derivation and a proceeding must be filed within one year of the first publication of the invention by the earlier applicant. Procedurally, under the AIA, a derivation proceeding will be instituted by the USPTO upon petition by an applicant claiming derivation where the petition shows: (i) the petitioner’s invention is the same or substantially the same and is not patentably distinct from the earlier applicant’s invention; (ii) the invention was derived from the inventor on the petitioner’s application; (iii) the earlier application was filed without the inventor’s authorisation; and (iv) the construction of the petitioner’s claims accurately reflects the true invention.

While derivation proceedings will provide a vehicle for protecting the rights of inventors under the US patent laws post-AIA, formal derivation proceedings have no precedence under current US patent practice, and therefore applicants are in virgin territory as this aspect of the AIA phases-in. Complicating matters, there is a limited body of established law relating to derivation. The courts have held as a threshold matter, that one cannot patent the invention of another, and that “being an inventor might be regarded as a preliminary legal requirement, for if he has not invented something, if he comes with something he knows was invented by someone else, he has no right even to approach the door” (In re Bergy, 596 F.2d 952 (CCPA 1979)) (of the Patent Office). Accordingly, a showing of derivation as to a patentee must establish both prior conception of the invention by another, and communication of that conception to the patentee (Gambro Lundia AB v. Baxter Healthcare Corp., 110 F.3d 1573 (Fed. Cir. 1997)). Conception is a well-established legal standard, requiring “formation in the mind of the inventor, of a definite and permanent idea of the complete and operative invention, as it is hereinafter to be applied in practice” (Hybritech Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367 (Fed. Cir. 1986)). 

Currently, in an interference, to prove derivation a party must establish prior conception of the claimed subject matter and communication of the invention to the adverse party. Intrinsic to derivation then, is a requirement that the inventor be “in possession of the invention” (Lamb-Weston Inc. v. McCain Foods, Ltd., 78 F.3d 540 (Fed. Cir. 1996)) and that communication of the invention be communicated to the patentee in enabling detail (Gambro Lundia AB v. Baxter Healthcare Corp., 110 F.3d 1573 (Fed. Cir. 1997)). Related to derivation but still distinct, is the legal concept of inurement, which involves a claim that the acts of another person should accrue to their benefit. Thus, with a claim of inurement, another party might be the proper inventor, but legal rights to their work is claimed by the petitioner. Communication is an essential difference between inurement and derivation, and communication of the invention is essential to establishing derivation, but is not required to establish inurement (Cooper v. Goldfarb, 154 F.3d 1321 (Fed. Cir. 1998)).

As derivation practice phases-in, the emphasis on prior conception will become less significant. The courts have already distinguished the originality context of inventorship, from the temporal component that is intrinsic to interference practice, thus establishing a solid foundation for future derivation practice. The issue central to inventorship in any current assertion of derivation, and therefore the likely standard for derivation proceedings going forward, is not which party was the first to invent, but rather who conceived of the invention (Price v. Synsek, 988 F.2d 1187 (Fed. Cir. 1993)). The courts have deemed this a question of law based on underlying facts (Gambro Lundia AB v. Baxter Healthcare Corp., 110 F.3d 1573 (Fed. Cir. 1997)) and supported by corroborating evidence (Price v. Synsek, 988 F.2d 1187 (Fed. Cir. 1993)) that establishes clear and convincing proof of conception. Prior conception should continue to be an absolute defence. Thus, a derivation proceeding will require from the litigants, solid evidence in the form of laboratory notebooks, written and electronic manuscripts and drafts, patent applications and draft, all of which are corroborated by contemporaneous records, receipts and witnesses. Since the AIA also creates a limited prior user rights defence, as well as new opposition proceedings, strict records retention policies should be the standard for company best-practices involving innovation and intellectual property. Similarly, in view of the race to the Patent Office among inventors that the AIA establishes, it makes sense to employ a strategy of filing (provisional) patent applications frequently and without delay. How often? There is no clear answer, but as a guideline, whenever there is a definite idea of an operative invention, it makes sense to secure a filing date for that invention. As new embodiments or modes of performing the invention become apparent, a subsequent patent application should be considered. In addition, best practices also suggest withholding where possible, any critical features of the invention in any public disclosure. While independent conception is a defence to a charge of derivation, withholding information provides a tactical ‘head start’ that can hold competitors off, while patent applications are finalised and filed.

The AIA contains numerous changes that will dramatically change US patent practice. But these changes are designed to provide a measure of transparency to the patent process, and reduce patent litigation. Admittedly, administrative challenges to patents are costly and time consuming, but the new derivation proceedings, while breaking new legal ground, are founded in established principles of US law, promising at least to some degree a bit of predictability.


James Culverwell is an associate and John M. Garvey is a partner at K&L Gates LLP. Mr Culverwell can be contacted on +1 (617) 951 9052 or by email: Mr Garvey can be contacted on +1 (617) 261 3117 or by email:

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James Culverwell and John M. Garvey

K&L Gates LLP

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