Prior User Rights Study Report to Congress - America Invents Act

claim of prior user right, bears the burden of showing a nexus between said continued infringing activityand some particular business need.The breadth of permissible prior use activities under the AIA is of a broadening nature, which issimilar in about half of the studied countries. The AIA specifies that the prior user rights defense,“extends only to the specific subject matter for which it has been established that a commercial use […]occurred.” 140 However, the provision goes on to state that “the defense shall also extend to variations inthe quantity or volume of use of the claimed subject matter, and to improvements in the claimed subjectmatter that do not infringe additional specifically claimed subject matter of the patent.” 141 In permittingthe prior user rights defense to be invoked even where there are variations in the quantity or volume of theuse, the AIA permits a greater breadth of prior use activities than in some other jurisdictions.b. Transferability of the Prior Use DefenseIn most jurisdictions, the prior use defense is limited to prior users and may only be transferred orassigned along with some or all of a business entity utilizing the prior user right. Prior user rightsgenerally cannot be licensed, and as such, are typically treated as a personal right. The limits on transferand prohibition of licensing keeps the prior use defense an equitable defense rather than an affirmativeright. Among the studied countries, transferability of the prior user rights defense can be classified as:(i) transferable; (ii) transferable only with a business; (iii) transferable with either a business or aproduction unit; or (iv) not transferable.Only one of the studied countries appears to have an unqualified transferability requirement.Prior user rights in Australia can be transferred to “successors in title.” 142 More specifically, Australianlaw permits assignment of prior user rights. However, prior user rights cannot be licensed by the prioruser. Assignees are considered as “successors in title” while licensees are not considered as such becauseassignees are subsequent owners of rights. 143 Australian law does not articulate that there needs to be anexus between assignment and a business unit of the original holder of the prior user rights.Most of the studied countries permit the transfer of prior user rights if done in conjunction withthe transfer of the business originally holding such a right. For example, Denmark limits the transfer ofprior user rights by requiring that the right “shall only be transferred to others together with the business140 § 5, 125 Stat. at 298 (to be codified at 35 U.S.C. § 273(e)(3)).141 Id.142 Australian Patent Law, at § 119(4).143 IP Australia Submission, at 12-15.25