Patent Article by William S. Ramsey, P.C.

ARE YOU A PRIOR USER?

The recently enacted American Inventors Protection Act of 1999 (Act) changed several areas of the U.S. Patent Statutes. This article will consider only Title 3, the most controversial section, which establishes a limited prior user defense to patent infringement for the first time in U.S. law.

Prior use was no defense before the Act. This meant that a person who made an invention and used it in secret could nevertheless be sued for patent infringement by another person who independently made the invention and applied for and obtained a patent. This happened despite the fact that the person who got the patent might, in fact, have been the second inventor, second to the inventor who kept the invention secret. This created a strong incentive for an inventor to obtain a patent rather than keep the invention as a trade secret. The law clearly preferred the inventor who obtained a patent and, thereby, made his or her invention known to the public over the inventor who kept his or her invention secret.

Patenting an invention necessarily involves making the invention public through the publication of the patent application. The application shows the details of the invention, as well as the claims which describe the exact invention which is protected by the patent. Publication of the details of the invention benefits the public in three ways. First, publication of the application lets the public know exactly what invention is protected by the patent so the public can avoid infringing the patent by making, using, or selling the invention. Second, the provision of a detailed description of the invention and its uses allows the public to understand the invention and thereby encourages the invention of improvements to the original invention. Third, the detailed description helps the public make, use and sell the invention after the patent has expired. By subjecting a person who practiced an invention in secret to an infringement charge by a second inventor who obtained a patent, the law encouraged patenting over keeping an invention secret.

The Act changed this scenario, at least with respect to patents on methods of conducting business. Under this Act, a person who, in good faith, reduced to practice the method at least 1 year before the patent application was filed, and commercially used the method before the patent was filed, has a defense against a charge of infringement by the patent owner.

In the Act, the prior user defense is limited to a "method of doing or conducting business". The federal courts will have to further define these terms. Conceivably this defense could be very broad. Courts will have to decide, for example, whether a chemical method, such as a method of fermenting penicillin, is a method of doing or conducting (pharmaceutical) business. It may be that any commercially useful process is in fact a method of doing or conducting business.

On the other hand, the defense may have no practical application because most inventions are claimed in various ways, and a method may be only one way of claiming the invention. For example, software inventions usually can be claimed in three ways.
A. An apparatus comprising a computer programmed to do the steps .....
B. A method of doing something comprising the steps ....
C. An article of manufacture comprising a floppy disc with a program which instructs a computer to do the steps ....

A narrow application of the Act would protect a prior user from claims of type B but leave him or her open to infringing claims of type A and C. Incidently, this devaluating of methods claims certainly will mean few method claims in patents.

In yet another twist, it is possible that a judge would interpret apparatus or article of manufacture claims of type A or C as substantially method claims of type B and thereby expand the scope of the prior user defense. Under this scenario, the prior user defense would apply to a vast number of patents.

What then can we say about the newly enacted prior use defense? Is it of little practical effect? Does it disrupt the patent system as it has evolved over the past two hundred years? Stay tuned.

William S. Ramsey 410-740-2225

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