Prior User Rights Study Report to Congress - America Invents Act

user. 270 “Fairness” has been a common theme in the history of United States patent law. 271 Prior userThe reason most frequently cited in support of prior user rights in a first-inventor-to-file regime isensuring “fairness” -- appropriately balancing the equitable interests of the prior user and the patentee. 269As noted above, a first-inventor-to-file system creates the potential for inequity if an earlier inventorcommercializes a new technology without disclosing it, but another later obtains a patent on it. In such asituation, the earlier inventor may be subject to liability for infringement, which could entail a substantialloss of investment, loss of jobs, and erosion of U.S manufacturing. A prior user rights defense addressesthis issue by allowing the earlier inventor to continue using the invention without liability, subject tocertain conditions, while the patentee still enjoys exclusive rights as against everyone except the priorrights have been specifically provided in the United States in the past as a means to balance respectiveinterests. 272 The prior use defense applicable only to business methods, for instance, was enacted toprotect businesses against infringement claims for using processes thought to be unpatentable before thedecision in State Street. 273 Moreover, since 1952, United States patent law has provided a prior inventiondefense by virtue of section 102(g)(2), the elimination of which under the AIA creates a need for a similardefense applicable in a first-inventor-to-file environment to ensure a continued and similar balancing ofinterests under the new law. 274This same notion of “fairness” also underlies the provision of prior user rights in otherjurisdictions. 275 A number of comments received were from, or on behalf of, foreign practitioners havingexperience with, or knowledge of, prior user rights in their home countries, e.g., Japan, Germany andAustralia. Several of these comments highlight the same basic dilemma created by a first-inventor-to-fileregime, i.e., that of an earlier commercial user and a later patentee of the same subject matter, as themotivating factor behind the establishment of prior user rights in those countries. 276 One German269 See, e.g., H.R. Rep. 112-98 at 87 (Letter from Secretary of Commerce Gary Locke to House Judiciary CommitteeChairman Lamar Smith (May 31, 2011)) (providing a prior user rights defense is a “matter of fairness”); seegenerally, Kupferschmid, supra note 9 at 217, 229 (citing “fairness” as argument number one for and against prioruser rights out a litany of arguments summarized in the article).270 Comments of Microsoft Corp., at 5.271 See Kyla Harriel, Prior User Rights in a First-to-Invent Patent System: Why Not?, 36 IDEA 543, 553-55 (1996)(noting the relationship between prior user rights and notions of “economic justice” that underlie U.S. law as itrelates to rewarding innovation and creativity).272 See Kupferschmid, supra note 9, at 217, 229.273 See supra note 20.274 See id. and Comments of Microsoft Corp., supra note 43, at 6.275 VAN EECKE supra note 125, at 23-24 (noting that prior user rights “are almost unanimously recognized in the[European Union] as being just and desirable on the grounds of both fairness and efficiency”).276 See, e.g., Comments from Freischem, supra note 39, at 3 (Germany); Comments of Telstra Corp., supra note 37,at 3(Australia); and Comments from Dr. Shoichi Okuyama, President, Japan Patent Attorneys Ass’n, to MaryCritharis et al., Senior Patent Counsel, USPTO, Office of Policy and External Affairs, Submission to the Request for50