March 13, 2018, marked the fifth anniversary of the transition from the previous “first to invent” system to the AIA’s “first to file” regime.  The PTAB seemingly marked the occasion by instituting the first ever derivation proceeding one week later in Anderson Corporation v. GED Integrated Solutions, Inc., Case DER2017-00007, Paper 32 (March 21, 2018).

The concept of “derivation” was not created by the AIA.  Pre-AIA 35 U.S.C. § 102(f) dictated that a person shall not be entitled to a patent if he did not himself invent the claimed subject matter.  Thus, evidence of derivation could be used as “prior art” to challenge patent validity in litigation, and derivation also was at issue in some interference proceedings.  The AIA abolished Section 102(f), replacing it with a post-grant proceeding wherein the PTAB determines whether an inventor named in an earlier filed application derived the invention from an inventor named in a subsequent application without authorization.  Derivation proceedings serve to ensure that patents are granted to the true inventor(s) of the claimed subject matter.

To succeed in a derivation proceeding, a petitioner must establish that the petitioner “has at least one claim that is: (i) the same or substantially the same as the respondent’s claimed invention; and (ii) the same or substantially the same as the invention disclosed to the respondent.”  37 C.F.R. § 45.405.  A petitioner must also show that the patent owner, without authorization, filed an application claiming the derived invention.  To prove derivation, the petitioner must establish by substantial evidence a prior conception of the claimed subject matter and communication of that conception to the inventor(s) identified in the challenged patent.

Here, Petitioner alleged that its employee invented a window spacer frame claimed in U.S. Patent 9,428,953, and shared it with the ’953 Patent Owner before the application for the ‘953 patent was filed.  Petitioner’s evidence includes pictures of a prototype, CAD drawings, and email correspondence.  The Board characterized the evidence as “a detailed mapping of record evidence to all of the recited elements of claims 1-22 of the ’953 patent.”  Petitioner’s evidence of email communications and declaration evidence sought to establish that Petitioner communicated the invention to the Patent Owner. The Board stated that the petition satisfies the “substantial evidence” standard required for institution and, therefore, instituted the derivation proceeding.

Interestingly, Petitioner structured its petition to establish prior conception and communication of the subject matter of each of claims 1-22 to Patent Owner’s inventor, i.e., the petition asserted that 22 different derivations occurred.  The Board found nothing in the statute prohibiting assertion of 22 separate derivations in a single petition, and instituted trial on all 22 allegedly “conceived” and “disclosed” inventions.

While derivation proceedings are not subject to the same statutory deadline as IPRs, it appears the Board expects to handle these proceedings in approximately the same time frame; oral arguments, if granted, are tentatively scheduled for November 2018.

Resources & Info

Arthrex and the Supreme Court Resource Center

In United States v. Arthrex, Inc., the Supreme Court has heard whether 125+ PTAB decisions rendered through October 2019 must be remanded for new decisions. Read about how that issue developed through our post.

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Our Team

PTABWatch, provided by Marshall, Gerstein & Borun LLP, analyzes and reports recent developments concerning Post-Grant Proceedings at the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office (USPTO), including Inter Partes Review (IPR), Post Grant Review (PGR), and Covered Business Method (CBM) proceedings.