Prior User Rights Study Report to Congress - America Invents Act

practitioner even noted that first-inventor-to-file is the “source” of prior user rights and that the potentialinequity it causes makes prior user rights “essential” in such a system. 277Unfortunately, there is very little empirical data on the frequency of use of the prior user rightsupon which to base a conclusion that providing them in a first-inventor-to-file regime is quantitativelyessential. Many of the comments and the few studies on the subject note that there have been only arelative handful of litigation outcomes involving the prior user rights defense, either in the United Statesor abroad. 278 Some of the comments, however, explain that litigation outcomes only tell part of the story.The prior user rights defense frequently leads to pre-litigation settlements between the prior user and thepatentee that are not – and in fact, could not be – revealed in empirical studies given the confidentialnature of the settlements, or because the lack of pre-trial discovery in some jurisdictions preventsuncovering prior uses, limiting application of the defense. 279Thus, the USPTO finds that:Finding 9:Providing limited prior user rights in a first-inventor-to-file system addressesthe inherent inequity such a system creates between an earlier commercial userof the subject matter and a later patentee. A prior user rights defense ispro-manufacturing and pro-jobs, as it rewards businesses that put new technologypromptly into commercial use, and provides protection for early commercial usewhen challenged by the later filing of patent applications by other entities.Comments on the Study of Prior User Rights 1 (Nov. 7, 2011) [hereinafter “Comments from Japan Patent AttorneysAss’n”] http://www.uspto.gov/aia_implementation/pur-2011nov08-jpaa.pdf.277 Comments from Freischem, supra note 39, at 3.278 See Lise Osterborg, Towards a Harmonized Prior User Right Within a Common Market System, 12 INT’L REV.INDUS. PROP. & COPYRIGHT 447, 456-59 (1981) (noting the dearth of reported prior user rights cases in France,England, Italy and the Netherlands); John Neukom, A Prior Use Right for the Community Patent Convention, 12EUR. INTELL. PROP. REV. 165, 166 (1990) (few reported cases in West Germany); Comments of Microsoft Corp.,supra note 43, at 4 (since 1977, there appear to be only 5 reported cases in the U.K.); and Comments of FICPI,supra note 2 (few reported cases in Europe and Brazil); but see Maeda, supra note 133, at 52 (reporting surveyresults suggesting frequent reliance on prior user rights by Japanese companies to avoid infringement litigation). Arecent study on usage of the Section 102(g)(2) prior inventor defense in the U.S. suggests, by analogy, that prior userrights may be asserted with some frequency under the new regime provided in the AIA. Comments from LexMachina, Inc., to the USPTO, U.S. Prior User Rights / Inventorship Study 1 (Nov. 7, 2011),http://www.uspto.gov/aia_implementation/pur-2011nov08-lex_machina.pdf (noting surprisingly high usage ofSection 102(g)(2) in reported cases).279 Comments from Freischem, supra note 39, at 1-2; Comments of FICPI, supra note 40, at 2; Comments fromComments of Microsoft Corp., supra note 43, at 4 (referencing findings of the European Union report cited supra,note 275, including that settlement prior to litigation helped explain the low rate of reported usage of prior userrights in Europe); see also Comments from Coalition for Patent Fairness, at 4-5 (suggesting that lack of discovery inforeign jurisdictions limits application of the defense).51