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Intellectual Property: Derivation Proceedings

Although the layman’s interpretation of patent reform suggests that derivation proceedings have been established to “replace” interference proceedings, it is inaccurate. Derivation, as a legal principle, has been and will continue to be available to parties involved in interference proceedings. More often than not, we have seen these derivation scenarios arise when collaborations between two parties fall apart, and information shared by one party makes its way into the other party’s patent application.

The legal principle of derivation remains unchanged by the patent reform laws. A party alleging that another derived the invention must prove that they: (1) conceived the invention claimed by another; and (2) communicated the complete conception of the invention to the other party.

Under patent reform, inventorship of patents and patent applications that do not contain any claims entitled to a priority date before March 16, 2013 cannot be contested in an interference proceeding. Instead, inventorship of these applications and patents, subject exclusively to the new first-to-file U.S. patent laws, can be challenged by filing a petition for a derivation proceeding by the U.S. Patent and Trademark Office, Patent Trial and Appeal Board (“Board”).

LeClairRyan’s patent attorneys possess a depth and breadth of experience protecting inventor’s rights and ensuring they achieve maximum strategic advantages. Our team of practitioners has developed skills and experience in litigating derivation issues in the context of patent interferences, and these same skills and experience will prove invaluable for the “new” derivation proceedings.

The following is a description of how the derivation process is initiated, as well as how we ensure our clients are positioned for success during the process and how we can save our clients time and money through alternative dispute resolution.


How Derivation Proceedings are Provoked

A derivation proceeding may only be requested by an inventor who has filed a patent application claiming the same or substantially the same invention as another applicant. While it may be that a petitioner has already filed an application claiming the same or substantially the same invention as another, more often this will be done by copying the earlier filed application, making any necessary changes to the application to reflect the invention by the later-filing applicant, and filing the application along with a petition for a derivation proceeding.

Regardless of the manner of filing the later application, the petition must state with particularity the basis for finding that the named inventor in the earlier application derived the claimed invention from the inventor in the petitioner’s later-filed application and filed it without the inventor’s authorization. Importantly, the petition for a derivation proceeding must be filed within one year of the first publication of the invention by the earlier applicant, whether that publication is the initial published application or the later published issued patent.

The standard for claiming the same or substantially the same invention is one that is carried over from interference practice, and therefore, the same two-way test for obviousness will be used to assess whether non-identically claimed subject matter constitutes substantially the same invention. This showing must be made twice: once with respect to what is being claimed by the two parties (i.e., at least one claim) and once with respect to what the petition disclosed to the other party. The petition must also be accompanied by sufficient evidence in the form of inventor and, possibly, witness declarations to demonstrate that a claimed invention was derived from an inventor named in the petitioner’s application, and that the inventor of the later-filed application did not authorize the other party to file the earlier application claiming such invention. The showing of communication must be corroborated.


Derivation Proceeding Strategies

Due to the one-year window for filing a petition, it is imperative to monitor published patent applications and issued patents for any that claim subject matter that you or one of your inventors developed. Aside from this being a best practice, it may be particularly important to monitor activity of former collaborators for the reasons discussed above. Our patent attorneys can help with monitoring such activity.

Derivation proceedings will be conducted on a compressed schedule; therefore, it is important to gather all documentation establishing invention dates and communication of the invention before filing a petition. Not only is such an approach helpful in litigating a derivation proceeding, it is also helpful in settling one because the evidence that substantiates the dates of invention will be available early in the proceeding – when the parties are most likely to settle. Our team members have extensive experience in coordinating the gathering of invention date information, filing patent applications in derivation situations to advantageously position our clients, and provoking interference proceedings that involve derivation issues.


Alternative Dispute Resolution

Derivation proceedings can be fully resolved before the Board. However, to save time and money, parties often wish to utilize alternative dispute resolution procedures, ranging from an exchange of proofs to binding arbitration to a truncated procedure before the Board. We have a depth of experience formulating procedures that protect our clients’ best interests and successfully handling interference proceedings utilizing a variety of alternative dispute resolution methods. Our experience handling interference proceedings will allow us to achieve favorable results for our clients in the resolution of derivation proceedings.