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First-filer vs. second-filer: Federal Circuit clarifies AIA derivation proceedings
More than a decade after the America Invents Act (AIA) shifted the U.S. patent system from a “first-to-invent” to a “first-to-file” system, the U.S. Court of Appeals for the Federal Circuit has weighed in for the first time on a derivation proceeding under the law. Its ruling sheds valuable light on the proper framework for such proceedings under the AIA.
Derivation duel
Global Health Solutions LLC (GHS) and Marc Selner each filed a patent application for the same invention, a method for preparing a wound treatment ointment. When GHS discovered Selner’s application, it filed a petition for a derivation proceeding against him. In a derivation proceeding, the Patent Trial and Appeal Board (PTAB) determines whether 1) an inventor named in an earlier patent application derived the claimed invention from an inventor named in the petitioner’s application, and 2) the earlier application was filed without authorization.
According to GHS, its founder, who was listed as the inventor on its application, was the true inventor. The PTAB, however, ruled in Selner’s favor. GHS then turned to the Federal Circuit, the appellate court that hears all patent-related appeals, for relief.
Conception and communication
The court began its analysis by explaining how the AIA has changed the litigation of derivation claims. Under the AIA, it said, a “first-inventor second-filer” must prove that the first-filer derived the purported invention from the second-filer. Because the focus is now on first-to-file, the inquiry in an AIA derivation proceeding centers on whether the petitioner conceived and communicated the invention before the first-filer filed an application.
If the petitioner can show both conception of the invention and communication of it to the first-filer before the latter filed its application, the first-filer isn’t without recourse. That party can overcome the showing by proving independent conception before the communication from the petitioner.
An inventor’s testimony alone won’t suffice to establish independent conception; corroboration is required. Documentary or physical evidence that was made contemporaneously with the inventive process provides the most reliable corroboration.
In this case, the PTAB had considered contemporaneous emails retrieved from Selner’s AOL email account. GHS’s founder sent Selner an email on February 14, 2014, with a 4:04 p.m. time stamp, which described the invention. Selner, though, had sent the founder an earlier email on that day that also described the invention. The language in the founder’s later email substantially resembled Selner’s email. Moreover, the founder sent Selner’s daughter an email in April 2014 that acknowledged her father as the inventor.
GHS didn’t challenge the authenticity of the emails, so they didn’t require independent corroboration. Even if they had, though, the court notably pointed out that the metadata generated by the web-based mail server (including the date and time the emails were sent and received and the addresses of the sender and recipient) indicated that the associated emails weren’t authored by Selner. Rather, the corroborating evidence was independent of his own statements and documents.
Co-inventor claim
GHS alternatively argued that, if the court affirmed the PTAB’s finding of independent conception, it nonetheless should send the case back to the board to determine whether its founder should be named as a co-inventor on Selner’s application. The Federal Circuit declined to do so.
The court found that GHS had forfeited its request to correct ownership because it hadn’t properly presented it. Along with abiding by other requirements, the request should have been made in a separate motion, accompanied by a processing fee and an application data sheet identifying each inventor. GHS, on the other hand, simply included a single sentence with the request in its petition for a derivation proceeding. And it provided no evidence that the founder was a co-inventor.
File fast and document
The court’s decision provides yet another reason for inventors to promptly file their patent applications. It also highlights the need to maintain careful documentation of invention conception to corroborate inventor testimony.
Sidebar: Is reduction-to-practice required?
The second-filer in Global Health Solutions (see main article) also argued that the Patent Trial and Appeal Board erred by rejecting the argument that conception wasn’t complete until the first-filer reduced the invention to practice — that is, actually developed it. The U.S. Court of Appeals for the Federal Circuit rejected this argument, too.
Conception generally can occur without an inventor actually reducing the invention to practice. Exceptions exist, such as when an inventor “is unable to envision the detailed [structure of his invention] so as to distinguish it from other materials, as well as a method for obtaining it.”
But the court had never held that actual reduction to practice is always necessary for complete conception to occur. The first-filer’s conception was complete in this case when he was able to define the invention by its method of preparation or had formed a “definite and permanent idea of the complete operative invention” — despite the fact that he never actually reduced the invention to practice.
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