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USPTO: Prior User Rights Essential to Support Innovation

The AIA is viewed as a substantial change to the U.S. patent system that now favors a first-to-file approach to award patents instead of a first-to-invent structure. However, the AIA, signed into law on September 16, 2011 also provides an expansion of prior user rights to defend patents or invalidate patents.

Congress had concerns whether the changes to the patent law could negatively impact the innovation rate in the U.S. to which the USPTO now responded that it does not expect such an effect. The USPTO believes that the expansion of the prior usage rights as well as a stronger focus on a first-to-file system, would strike the right balance in the patent filing system as it is "limiting the prior user rights defense to those parties that can prove commercial use at least one year prior to the filing date of the patent application by clear and convincing evidence."

Specifically, the AIA now provides prior user rights defense to patents in all technologies, not just business methods. Previously, prior user rights were limited to "methods of conducting business." The limitations and exceptions of prior user rights defense in the AIA include:

- a prohibition against license
- an assignment or transfer of the defense other than in connection with an assignment or transfer of the entire business to which the defense relates; the defense is geographically limited to cover only those sites where the invention was used before the critical date
- patents that are owned by or assigned to universities or affiliated technology transfer organizations

Following a public hearing, the USPTO noted that the only negative impact of AIA and greater prior user right could be of an increase "secrecy over disclosure in a manner that could be detrimental to the patent system," while the general feedback apparently was that "the ability to maintain trade secrets is vital to American competitiveness and job growth, and that a limited prior user right defense is an appropriate complement to a first-to-file system."

In its response to Congress, the USPTO noted that the "AIA should be maintained with no change at the present time," and that the organization "should reevaluate the economic impacts of prior user rights as part of its 2015 report to Congress on the implementation of the AIA."