Prior User Rights Study Report to Congress - America Invents Act

As with the creation of the prior user rights defense in the AIPA, the limited expansion of thedefense in the AIA also sparked debate among the patent and business communities. Proponents arguethat the defense is necessary in a competitive economy and strikes the balance between trade secretand patent protection. Proponents likewise argue a prior user rights defense is necessary in afirst-inventor-to-file regime to provide inventors who put inventions to practice first with the ability tocontinue using their innovations, even though they may not be entitled to a patent. Critics argue,however, that prior user rights undermine the purpose of the patent system by creating a strong incentiveto protect innovations as trade secrets rather than disclose them and fuel technological growth in theUnited States.Given the opposing views on the prior user rights defense, Congress mandated in section 3 of theAIA that the USPTO produce a report on the operation on prior user rights in industrialized countries inorder to explore the implications of a prior use defense in the United States. In particular, Congressrequired the USPTO to study the following topics, in consultation with the Office of the U.S. TradeRepresentative (USTR), Department of State (DOS), and Department of Justice (DOJ):(A)(B)(C)(D)(E)(F)A comparison between patent laws of the United States and the laws of otherindustrialized countries, including members of the European Union and Japan,Canada, and Australia.An analysis of the effect of prior user rights on innovation rates in the selectedcountries.An analysis of the correlation, if any, between prior user rights and start-upenterprises and the ability to attract venture capital to start new companies.An analysis of the effect of prior user rights, if any, on small businesses,universities, and individual inventors.An analysis of legal and constitutional issues, if any, that arise from placing tradesecret law in patent law.An analysis of whether the change to a first-to-file patent system creates aparticular need for prior user rights. 28This Report addresses each of the topics identified by Congress and analyzes “prior user rights”in the context of changes made by the AIA. This Report first provides background in Section II on thescope of the study that the agency undertook to fulfill its Congressional mandate. Next, the Reportprovides an international comparison of prior user rights in Section III, Part A, and then explores the28 § 3(m), 125 Stat. at 292.8