United Kingdom allows a prior user in a partnership <strong>to</strong> authorize his partners <strong>to</strong> perform the prior useactivities. 153The final category bars the transfer of the prior user right. While Mexican law does not appear <strong>to</strong>explicitly address transfer of prior user rights, it is unders<strong>to</strong>od in practice that prior user rights are nottransferable. 154 As such, prior user rights appear <strong>to</strong> be a purely personal and non-transferable right inMexico. 155Finally, it should be noted that Canada was not classified in<strong>to</strong> any of the categories above. Aspreviously stated, Canada’s prior user right encompasses the purchase, construction, or acquisition ofclaimed subject matter. 156 Therefore, any party in a product supply chain, or business transaction, mayalso be able <strong>to</strong> assert the prior user rights defense. However, it is not clear whether the right may betransferred <strong>to</strong> (and asserted by) someone outside of this nexus. Canadian law appears silent on this issueand Canadian case law does not appear <strong>to</strong> provide a definitive conclusion, with some suggesting that it islogical that they can be “passed on <strong>to</strong> another.” 157Like most of the studied countries, the prior user rights defense under the AIA may be transferredas long as it is in conjunction with a business unit. More specifically, the AIA specifies that prior userrights can only be transferred, except <strong>to</strong> the actual patent owner, as part of a good faith assignment ortransfer of the entire enterprise or line of business <strong>to</strong> which the defense relates. 158 That is, the right <strong>to</strong>assert said defense may not “be licensed or assigned or transferred <strong>to</strong> another person except as anancillary and subordinate part of a good-faith assignment or transfer for other reasons of the entireenterprise or line of business <strong>to</strong> which the defense relates.” 159c. Limitations on Enforceability of the DefenseUnder section 273(e)(5) of the AIA, a prior user right defense <strong>to</strong> infringement may not beasserted if “the claimed invention with respect <strong>to</strong> which the defense is asserted was, at the time theinvention was made, owned or subject <strong>to</strong> an obligation of assignment <strong>to</strong> either an institution of higher153 VAN EECKE, supra note 125, at 105; see also Hazel Craven, Senior Legal Adviser, UK Intell’l Prop. Office,Submission re WIPO Questionnaire on Exceptions and Limitations <strong>to</strong> Patent <strong>Rights</strong>, 16-18,http://www.wipo.int/export/sites/www/scp/en/exceptions/submissions/uk.pdf; and Webb, supra note 65, at 6.154 Mexican IP Law, Art. 22.155 Fabian R. Salazar, Divisional Direc<strong>to</strong>r for Patents, Mexican Institute for Indus. Prop., Submission re WIPOQuestionnaire on Exceptions and Limitations <strong>to</strong> Patent <strong>Rights</strong>, 10, http://www.wipo.int/export/sites/www/scp/es/exceptions/submissions/mexico.pdf.156 Canadian Patent <strong>Act</strong> at § 56(1).157 Binkley at 208.158 § 5, 125 Stat. at 298 (<strong>to</strong> be codified at 35 U.S.C. § 273(e)(1)(B)).159 Id.27
education… or technology transfer organization whose primary purpose is <strong>to</strong> facilitate thecommercialization of technologies developed by one or more such institutions of higher education.” 160After studying the prior user rights provisions on the various selected countries across the globe,there appears <strong>to</strong> be no limitations on enforceability in any of their laws. In this regard, it appears that theUnited States is rather unique is including a provision benefiting the academic sec<strong>to</strong>r.Thus, the USPTO finds that:Finding 2:The scope of the prior user rights defense includes limitations on the type ofcontinued activities, the transfer of the personal rights, and the enforcement of saidright, such that the patentee’s rights are not unjustly impinged and the universitycommunity may benefit, since the defense is not available in patent actions byuniversities.On the basis of the above analysis and findings, the USPTO recommends as follows:Recommendation 1:The prior user rights defense provisions set forth in the AIA aregenerally consistent with those of major trading partners and neednot be altered at this time.B. Impact of <strong>Prior</strong> <strong>User</strong> <strong>Rights</strong> on Innovation, Start-up Enterprises, Small Businesses,Individual Inven<strong>to</strong>rs and UniversitiesThe <strong>America</strong>n <strong>Invents</strong> <strong>Act</strong> mandates that the USPTO conduct a prior user rights study, requiringthe Office <strong>to</strong> conduct several inquiries related <strong>to</strong> economic activity. 161 This section addresses:(a) The effect of prior user rights on innovation rates in the selected countries;(b) If there is any correlation between prior user rights and start-up enterprises and the ability<strong>to</strong> attract venture capital <strong>to</strong> start new companies; and(c) The effect of prior user rights, if any, on small businesses, universities, and individualinven<strong>to</strong>rs.Economic thought on the relationship of property rights and the incentives <strong>to</strong> engage in creativeefforts like invention is well developed. Traditionally, economists have viewed patent rights as a solution160 § 5, 125 Stat. at 298-299 (<strong>to</strong> be codified at 35 U.S.C. § 273(e)(5)).161 §§ 3(m)1.B.-C., 125 Stat. at 292.28
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