Note: This article appeared as a two-part series in the March and April 1996 editions of Managing Intellectual Property, Euromoney Publications, London, England. Reprinted by permission.

Introduction

Most of the world has a "first to file" patent system. If two or more inventors discover the same patentable device, compound, process, etc., the one who files the first patent application will receive the right of excluding others from using the invention. The United States, in contrast, has a "first to invent" patent system. Patent protection on the same invention in the United States, the one who invented first has the superior right to the patent.

Because it awards patent rights to whoever invents first, the United States needed to develop a system for resolving the inevitable conflicts that arise when two or more parties claimed patent rights to the same subject matter. Congress established this procedure in § 135 of the patent laws by delegating to the Commissioner of the Patent and Trademark Office (PTO) the authority to declare an "interference" when "an application is made for a patent which . . . would interfere with any pending application, or with any unexpired patent . . . ."¹

Until very recently, under the laws of the United States, inventors outside the United States could not use their non-U.S. activity to prove they were the "first to invent." The best they could do was rely on the earliest filing date of their non-U.S. patent applications. But the recently enacted legislation implementing GATT and its accompanying TRIPs agreement abolish this geographic distinction. On and after January 1, 1996, inventive activity outside the United States may be used to prove who was the "first to invent" a particular invention. Because of this dramatic change in U.S. patent law, non-U.S. inventors must now become acquainted with the concepts and procedures of the United States "patent interference."

Subject Matter of Interferences

An interference occurs when an application claims subject matter that is the "same patentable invention" found in the claims of another application or issued patent. It is sometimes useful to look at an interference as a contest to determine which of two competing sets of claims should act as patent-defeating prior art against the other. The PTO uses this prior-art approach to define the subject matter of an interference--the "same patentable invention"--as follows:

Invention "A" is the "same patentable invention" as invention "B" when invention "A" is the same as (35 U.S.C. 102) or is obvious (35 U.S.C. 103) in view of invention "B" assuming invention "B" is prior art with respect to invention "A." Invention "A" is a "separate patentable invention" with respect to invention "B" when invention "A" is new (35 U.S.C. 102) and non-obvious (35 U.S.C. 103) in view of invention "B" assuming invention "B" is prior art with respect to invention "A". ²

Claims in different applications or patents may be directed to interfering subject matter, that is, they may constitute "the same patentable invention," even though they do not actually and identically overlap. For example, a claim requiring "chlorophenyl" could be directed, under proper circumstances, to the same patentable invention as a claim requiring "fluorophenyl" in an already-issued patent.

Furthermore, both of two interfering claims do not have to be patentably indistinct from each other; an interference can be declared if a claim in an application is patentably indistinct from a claim in the patent, even if the reverse is not true, i.e., the patent claim is patentably distinct from the application claim. At least in theory, an invention can be both the same patentable invention as another invention and a separate patentable invention with respect to the other invention. To illustrate, invention "A" could be directed to a genus (e.g., halophenyl) while invention "B" is directed to a species (e.g., fluorophenyl), subsumed within the genus of invention "A." Invention "A" is the same patentable invention as invention "B" because invention "A" is the same as (i.e., anticipated by) invention "B." At the same time, invention "B" (species) could be a separate patentable invention with respect to invention "A" (genus) because a species is not always anticipated by a subsuming genus and, under appropriate circumstances, a species can be patentable over a genus that totally encompasses the species.

The Concept of "Counts"

As part of the procedural mechanism for resolving interferences, the PTO prepares one or more "counts." These counts define the scope of the subject matter (invention) in dispute.

The count, initially drafted by the PTO, looks very much like a claim in a patent application or patent. Indeed, the count often derives directly from a claim in the application or patent of one or both of the parties to the interference. The count should encompass all the interfering subject matter; that is, all patentably indistinct, but otherwise patentable, subject matter of the applications and patents involved in the interference. Thus, in some instances, a count will actually be broader than the disclosure and claims of any single party.

For example, one party might disclose a process requiring a temperature between 60°C and 100°C. Meanwhile, the other party discloses substantially the same process at a temperature between 75°C and 125°C. In the ensuing interference, the count would pick up the low end of one party's range and the high end of the other, and recite a temperature range of 60°C to 125°C, even though neither party disclosed this range. Such a count is known as a "phantom count."

When the claims involved in an interference are particularly complex, the PTO faces the dilemma of drafting a count suitably broad to encompass the entire common invention. To meet this challenge, the PTO often fashions the count by taking the broadest claim from each side and connecting it with an "or." This technique, which has proven most satisfactory, gives each side the benefit of a count written in terms the party has chosen to define its invention. It also ensures a count of sufficient breadth to subsume the broadest allowable subject matter of each party.

Interferences, at least as initially declared, are usually based on a single count. An interference may involve multiple counts, but each separate count must be directed to a different patentable invention. Priority is decided separately for each count.

When the PTO declares an interference, it designates the claims in the applications or patents that "correspond to the count." If a claim does not define an invention that is patentably distinct from the invention defined by the count, then it corresponds to the count. Claims corresponding to a particular count interfere with one another and any priority judgment as to a particular count governs all corresponding claims. A patentable claim not designated as corresponding to any count is not at risk in the interference; the party asserting such a claim will be entitled to obtain a patent containing the claim, regardless of the outcome of the interference.

The Date of Invention

In interference proceedings, the party determined to have invented first will receive an "award of priority." To receive this award, a party must establish an earlier "date of invention" than the opposing party. When determining this date, the PTO will consider both aspects of the inventive act, "conception" of the invention and its "reduction to practice."

On January 1, 1996, R&D labs throughout the world must take note of a significant change in U.S patent law: non-U.S. inventors will be able to prove dates of invention on the basis of non-U.S. inventive activity. Thus, all R&D labs should reevaluate the way they track their research and record its results. The records of this activity are essential for proving dates of invention. Those that fail to reconsider their research recordkeeping procedures may one day in the not-too-distant future find themselves congratulating the opposition in some interference proceeding.

Proving Conception

"Conception" can be likened to the proverbial light bulb turning on above the inventor's head. It is the mental part of the inventive act, the idea for the invention. But a legally sufficient conception, one that is relevant to the "date of invention," must be more than just a general idea. In traditional interference practice, an invention is conceived of when the inventor has in mind a complete idea of the invention of the count.

In most instances, claims--and counts--cover a number of different embodiments of an invention. To have a conception of the invention of the count, the inventor need not have thought of all possible embodiments. Just one embodiment is sufficient to prove conception of the count. However, the inventor must have in mind all the aspects of an embodiment of the invention embraced by the count. The inventor must also have in mind how to make or practice the invention so that the only thing left to do is the physical making of the invention.

The classic, and still accepted, definition of conception appears in the case of Mergenthaler v. Scudder:

The conception of the invention consists in the complete performance of the mental part of the inventive act. All that remains to be accomplished in order to perfect the act or instrument belongs to the department of construction, not invention. It is, therefore, the formation in the mind of the inventor of a definite and permanent idea of the complete and operative invention as it is thereafter to be applied in practice that constitutes an available conception within the meaning of the law.³

Proving Reduction to Practice

A party will not succeed in proving a date of invention merely by showing conception of the invention. After conception, the inventor must have reduced the invention to practice. This the inventor may do in one of two ways: (1) actually reducing the invention to practice by making the invention work or (2) constructively reducing it to practice by filing a patent application.

To achieve an actual reduction to practice, the inventor must actually make a tangible embodiment and demonstrate a practical utility. For example, if the invention is a machine, and the inventor has conceived of the idea of that machine, the inventor could reduce the invention to practice by building and testing the machine to show that it operates in the way intended.

A successful reduction to practice requires a showing of operativeness or practical utility. The invention need not reach the stage of perfection required for commercial exploitation; but the inventor must be able to show that the invention does indeed operate, even if poorly, in its intended functional setting.⁴ As with conception, however, reduction to practice can occur with a single embodiment within the count.

Under U.S. law, an inventor has a second option in showing the required reduction to practice, a relatively simple procedure obviating the need to produce a working model: "constructive reduction to practice." A constructive reduction to practice occurs when the inventor files a patent application describing the invention, teaching how to make and use it, and explaining the best mode of practicing it.

The U.S. patent laws, in § 112, set forth the requirements for a complete and sufficient disclosure of an invention in a patent application. Filing a patent application meeting those requirements constitutes constructive reduction to practice.

Determining Priority: The Importance of Diligence

The first party to conceive of the invention and reduce it to practice is deemed the "first to invent." If one party conceives of the invention first but reduces it to practice after the second party, he or she may still be considered the first inventor. Priority is awarded to the party establishing either of two sequences of events: (1) the earlier date of conception and the earlier date of reduction to practice or (2) the earlier date of conception, but a later date of reduction to practice, coupled with a reasonably diligent effort to reduce the invention to practice from just before the other party's date of conception until reduction to practice is ultimately achieved. In either case, the reduction to practice may be actual or constructive.

If the party is first both to conceive of the invention and to reduce it to practice, then the other party's diligence is irrelevant. Diligence becomes a factor only when a party is first to conceive of the invention and second to reduce it to practice. As a corollary, the date of conception has significance only when a party is second to reduce to practice and attempts to show conception and diligence from a time before the other party's date of conception.

Several examples will illustrate these crucial requirements needed to prove a date of invention and hence priority: "conception," "reduction to practice," and "diligence." Suppose that party A conceived of the invention on March 1, 1985, and reduced it to practice on April 1, 1985. Further, assume that party B conceived of the invention on March 15, 1985, and reduced it to practice on April 15, 1985. In this case, party A was first to conceive of the invention and first to reduce it to practice. Party A wins the interference and receives the award of priority.

Diligence plays no role in this example. Even if party B was diligent and party A was not, the result does not change. Whenever a party proves that it was both first to conceive of the invention and first to reduce it to practice, that party is the first to invent and is entitled to the award of priority.

Diligence only becomes relevant when party B conceives of the invention before party A. Thus, in our example, still assume that party A conceived of the invention on March 1, 1985, and reduced it to practice on April 1, 1985, just as before. Now, however, suppose that party B conceived of the invention a month earlier on February 1, 1985, instead of March 15, 1985, as in the previous example, but still assume that party B reduced the invention to practice on April 15, 1985. In this new situation, party B was first to conceive of the invention, but last to reduce it to practice. Diligence now becomes a key issue.

To succeed in this new example, party B (first to conceive, second to reduce to practice) would have to prove diligence from just before the conception date of party A, March 1, 1985, until the reduction-to-practice date of party B, April 15, 1985. If party B cannot prove diligence, then party A will be considered the first inventor on the basis of the reduction-to-practice date of April 1, 1985, some two weeks earlier than the April 15, 1985, date for reduction to practice by party B.

Proving Diligence

To establish diligence between conception and reduction to practice, a party must show conduct meeting well-established guidelines of the PTO Board of Patent Appeals and Interferences:

The party chargeable with diligence must account for the entire period during which diligence is required . . . . The standards for finding reasonable diligence are harsh. The public policy favors early disclosure, . . . and thus the law is reluctant to displace an inventor who was the first to disclose to the public his invention . . . .  During this period there must be "reasonably continuous activity."⁵

As is apparent, an inventor seeking to rely on diligence during the critical period faces a heavy burden. While minor periods of inactivity, i.e., a few days may be forgiven or overlooked, as a general rule, to satisfy the requirement for "reasonable diligence," a party must show virtual daily activity directed toward reducing the invention in issue to practice.

To show this necessary activity, the party must be prepared with evidence of what acts occurred as well as the specific dates when those acts occurred.⁶ This means that the party asserting diligence must establish what was done and when it was done.⁷ It is not sufficient merely to state that there were no weeks or months where the inventor was not diligent or that the inventor was diligent during the entire critical period.⁸

Under appropriate circumstances, absence of diligence may be excused. To be excused, parties usually must show that circumstances beyond their control prevented them from working on the invention and, but for those circumstances, they would have been working on the invention.

In interference practice, diligence usually is not an issue. When it is, it can be quite difficult to prove. Accordingly, in the majority of interference cases, the party who was first to reduce the invention to practice, either by actual or constructive reduction to practice, will prevail.

The Importance of Corroboration

When seeking to prove that an invention was conceived of or reduced to practice on a given date, an inventor must be able to point to some corroboration of his or her own testimony. The inventor's word alone about conception and reduction to practice is simply not enough: Some evidence independent of the inventor, proving that the activities of the inventor actually occurred, must corroborate the story. This "corroboration" is sometimes difficult to establish, for it can be challenging to find witnesses who can corroborate all aspects of conception and actual reduction to practice.

The corroboration requirement only applies where an inventor tries to prove conception and actual reduction to practice. When a party relies on the effective filing date of the patent application, that party is not required to put on any corroborating witnesses or provide any documents other than the patent application itself, and any earlier application, such as a convention priority application, on which the party is relying.

How Interferences are Declared

During the pendency of a U.S. patent application, the application materials are kept in the strictest confidence by the PTO. Thus, often one patent applicant has not the slightest hint that another patent applicant is simultaneously seeking a patent on the same subject matter. By the same token, the holder of an already-issued patent may be totally unaware that a patent applicant seeks to obtain patent protection on subject matter already patented.

Because of this secrecy, interferences are often initiated by the PTO when a patent examiner becomes aware of two conflicting patent applications, which neither of the respective applicants knows about. In other words, a patent applicant may only learn that another applicant seeks patent protection of the same subject matter when notified that the PTO has declared an interference.

In other situations, a patent applicant may initiate an interference. For example, a patent applicant may learn of an already-issued U.S. patent and seek to have an interference declared between the application and the patent. This may involve amending the claims of the application or adding claims directed to the subject matter claimed in the patent. Presumably the vast majority of interferences will come about because provoked by a party if prompt publication is adopted in the U.S.

Lastly, a U.S. patent applicant may learn that another U.S. patent application exists by seeing the publication of a foreign counterpart. In such a case the applicant may call the patent examiner's attention to this fact and request that the examiner investigate the possibility of declaring an interference with a potential corresponding U.S. application.

When Interferences Are Declared

When the PTO learns that two or more patent applications interfere with one another, the patent examiner looks at the effective dates of the applications. As a rule, if those dates come within six months of each other, the PTO will declare an interference unless the inventions are of a relatively simple nature. With relatively simple inventions, interferences are not declared between applications unless the filing dates are within three months. In situations where the filing dates are outside these guidelines, the PTO issues the earliest-filed application and applies the resultant patent as prior art against the later application. Any interference that may ensue will involve the issued patent and the application.

When an application and an issued patent contain interfering subject matter, and the application has the earlier effective filing date, an interference is declared without regard to the difference in filing dates. When, however, the patent has the earliest effective filing date, an interference will not be declared unless the applicant establishes that there is a basis upon which the applicant could prevail. If the effective filing dates are within three months, the applicant need only file an affidavit or declaration alleging that there is a basis upon which he or she could prevail. No explanation is needed.⁹

If the difference in effective dates exceeds three months, a more detailed showing of possible success is required before the PTO will declare an interference. In this case, the party with the later filing date, known as the junior party, must actually show that he or she can overcome the effective filing date of the earlier party, known as the senior party.¹⁰ This showing almost always involves providing evidence that the junior party's invention was made before the senior party's filing date,¹¹ but the junior party might also try to prove that the senior party is not entitled to a patent, for example, because of lack of patentability. However, the PTO will not declare an interference unless the party trying to provoke the interference has at least one allowed claim. Thus, the showing of unpatentability must apply to the senior party only, a somewhat unusual circumstance.

If the proper circumstances exist to permit an attack on patentability--such as a senior party's patent containing broad claims and a junior party's application containing narrow claims--an interference can provide an attractive forum for attacking patentability, for it is the only inter partes proceeding in the PTO where patentability can be contested.

The Interference: A Procedural Overview

Patent interferences consist of three phases, the first running from the declaration of the interference through the motion period; the second, from the decision on motions through the trial stage; and the third, from the close of testimony through final hearing. The interference begins when the PTO sends to the involved parties a notice advising them that an interference has been declared. The notice completely identifies the applications or patents of all opposing parties. If the PTO has determined that an involved application or patent is entitled to the benefit of the filing date of an earlier application, the Notice of Interference so indicates. Parties normally are not afforded the benefit of the filing date of foreign priority applications at the time interferences are declared, particularly if the priority application appears in a language other than English.

The Notice of Interference also includes (1) at least one count, (2) a listing of the claims in each party's case that have been designated as corresponding to the count, (3) the name of the PTO Administrative Patent Judge responsible for the interference, and (4) the due date for filing initial papers, i.e., a Designation of Lead Attorney, Preliminary Statements, and Preliminary Motions. Usually, parties have about two weeks to designate their lead attorney and about three months to file the first substantive papers, i.e., the Preliminary Statements and Preliminary Motions.

Preliminary Statements

A Preliminary Statement contains allegations of relevant dates the parties believe they can establish in the interference. But Preliminary Statements are mere allegations: They do not constitute proof. Furthermore, nothing untoward will occur if a party alleges dates earlier than the ones the party ultimately establishes. By the same token, a party is normally not permitted to establish dates earlier than those alleged in the Preliminary Statement.

A typical Preliminary Statement alleges the date the invention was conceived, a date the first drawing was made (if any), the date the invention was first described in writing, the date the invention was first disclosed to a noninventor, the date the invention was first actually reduced to practice, and the date after conception when diligence toward reduction to practice began. If the inventor described the invention in writing, then the party must file that description with the Preliminary Statement.¹²

A party must make these allegations only when trying to prove a date of invention in advance of that party's filing date. When a party intends to rely solely on the filing date of an earlier application, such as a priority application, the Preliminary Statement merely needs so to state and identify the earlier application. Nothing further is required. Indeed, if a party intends to rely on its actual U.S. filing date, or the date of an earlier application to which benefit has been accorded in the Notice of Interference, no Preliminary Statement is required at all.

A party must complete the Preliminary Statement and file it with the PTO in a sealed envelope by the date specified in the Notice of Interference. The party must also serve a notice on the opponent, stating that the Preliminary Statement has been filed. At this time, however, the opponent does not receive a copy of the Preliminary Statement. Instead, the parties will receive their opponents' Preliminary Statements at the end of the motion period.

Preliminary Motions

The motion period is an extremely important stage of an interference proceeding. During this time, the parties raise issues that will be contested throughout the interference. As a general rule, if a party can raise an issue during the motion period and fails to do so, that party will not be permitted to raise it later. Thus, it is critical that all issues important to a case be addressed during the motion period.

Also, during the motion period a party may try to obtain a position that will be advantageous in later stages of the interference. Often, the outcome of the interference will be determined by positioning that takes place during the motion phase. The motion period further offers an opportunity to attempt to terminate the interference without a trial phase. In other words, certain motions, if granted, can be dispositive of the interference. If such a motion is brought successfully, the party then has no need to go through the time-consuming and expensive trial.

Finally, the motion period provides a time to define the issues the parties must contest in the interference. As in all legal contests, framing the issues can often determine ultimate outcome.

Preliminary Motions: The Crucial Ones

The types of preliminary motions that may be brought in an interference are set forth at 37 C.F.R. § 1.633 (Rule 633). A review of the rule shows a wide variety of possibilities. Furthermore, these possibilities are not exhaustive. 37 C.F.R. § 1.635 provides for filing motions "relating to any matter other than a matter which may be raised under § 1.633 . . . ." Motions under § 1.635 may be brought at any time, including during the motion period. The PTO is receptive to motions requesting anything that a party is clever enough to think of, provided the action requested makes sense under the particular facts of the case.

Motions for Judgment on Grounds of Unpatentability

One of the dispositive motions available in an interference is a Motion for Judgment on the ground that the claims in the opponent's case are not patentable (37 C.F.R. §1.633(a)). Such a motion, of course, provides a very attractive option because it can end the interference quickly without ever reaching priority issues.

Motions for Judgment on grounds of unpatentability need to be considered carefully. Remember, interfering subject matter by definition is subject matter that is not patentably distinct. Thus, in most instances, an attack on patentability of an opponent's claims corresponding to the count also represents an attack on the patentability of one's own claims. A successful attack on an opponent's claims on the basis of prior art that is also prior art against one's own application or patent, often will result in neither party's receiving a patent. In many instances, however, this can provide a satisfactory outcome.

In some instances a party can attack the patentability of the opponent's claims without at the same time defeating the party's own claims. In such instances, Motions for Judgment on the ground of unpatentability are particularly attractive.

For example, a particular reference may be prior art against one party to the interference, but not to the other. In addition, one party's claims may be much narrower than the opponent's claims. A successful attack on broad claims does not necessarily defeat narrower claims. Furthermore, one party may have or can obtain claims not designated as corresponding to the interference count. Such claims would not be adversely affected by a finding that claims corresponding to the count are unpatentable, because claims designated as not corresponding to the interference count are by definition patentably distinct from the subject matter of the interference.

Motion to Dissolve on the Ground of No Interference-in-Fact

37 C.F.R. § 1.633(b) provides for Motions for Judgment on the ground there is no interference-in-fact. Such motions are proper when the claims in each party's case are patentably distinct. In situations where a party is content to allow the opponent to obtain a patent containing the opponent's allowed claims, and the party also would like to obtain the claims in its own application or patent, a Motion for Judgment on the ground there is no interference-in-fact may be desirable. A Motion for Judgment founded on no interference-in-fact can be coupled with a Motion for Judgment on the ground that an opponent's designated claims are unpatentable. If successful on both motions, the opponent will lose the claims in its application or patent, while the successful moving party will be able to obtain its allowed claims.

Motions to Redefine the Interfering Subject Matter

Under 37 C.F.R. § 1.633(c), a wide variety of motions to redefine the subject matter of the interference are available. For example, a party may move to add or substitute an interference count. Similarly, a party may amend a claim corresponding to the count or add a claim to be designated as corresponding to the count. Such motions can become crucial, for they ensure that the count and corresponding claims correspond to a party's priority proofs.

A party may also move to redefine the interfering subject matter by designating claims as not corresponding to the count. Such a motion urges that a particular claim defines a patentably distinct invention from the interference count. For example, the interference count could define a generic class of compounds, while the moving party's claims disclose a specific compound particularly effective for the intended purpose. If the opponent does not disclose the particularly effective compound, the moving party will likely want to bring a motion to designate as not corresponding to the count claims directed to that compound.

If a claim is designated as not corresponding to the count, that claim is not in issue in the interference. The applicant or patentee retains the claim after termination of the interference, regardless of the outcome of the interference. Thus, parties should always consider the possibility of bringing these motions.

Motion for the Benefit of the Filing Date of an Earlier Application or to Deny Previously Accorded Benefit of the Filing Date of an Earlier Application

Parties to an interference, under appropriate circumstances, are entitled to the benefit of the filing date of earlier-filed applications, including foreign priority applications. In many instances, the benefit of the filing date of earlier applications is accorded by the PTO at the time the interference is declared, obviating the need to move for priority benefit. In such a case, of course, it is possible to move to have the benefit accorded an opponent denied.

In most instances, however, date benefit is not accorded to foreign language priority applications at the time of the interference is declared. As a practical matter, at that time the PTO has no way of determining whether an applicant or patentee is entitled to priority benefit. Thus, a foreign application applicant will nearly always move for priority benefit.

The requirements for receiving benefit of the filing date of a previously filed application in an interference context are somewhat different than in the context of avoiding prior art. An intervening reference is only avoided by a prior application if that application supports the full scope of the claim in issue. In contrast, in an interference setting, it is enough that the prior applications support an embodiment within the scope of the interfering subject matter. For example, if the interference count is directed to "halophenyl," a party is entitled to the benefit of a foreign priority application disclosing "chlorophenyl."

The embodiment relied upon in an earlier case, including a foreign priority application, must comply with the requirements of 35 U.S.C. § 112. That is, the specification must (1) contain a written description of the embodiment relied upon, (2) must enable one skilled in the relevant art to make and use the relevant embodiment, and (3) disclose the best mode contemplated by the inventors. Nevertheless, the application need not describe the full scope of the interfering subject matter.

Other Motions

Rule 633 recognizes other motions, such as motions to substitute the earlier-filed application for the application involved in the interference, motions to declare an additional interference, and motions to add a reissue application. Moreover, inventorship may be corrected under Rule 634. Such motions may be important in specific factual settings, but they are not as common as the motions discussed above.

Discovery

Unlike the discovery available in federal district courts in the United States, the scope of discovery in interferences before the PTO is quite narrow. Generally, discovery is initially limited to discovery of information by the junior party from the senior party. Moreover, to be entitled to that information, the requesting party must have some basis for believing that it actually exists. Further, the party seeking discovery can only ask for relevant information and may not use the discovery mechanism as a "fishing expedition" to find out whether certain information is available for attacking the opponent's position.

The legislation recently enacted to implement the provisions of GATT and TRIPs specifically refers to discovery abroad relating to dates of invention. The GATT legislation amended § 104 of the U.S. patent laws so that it will read as follows:

To the extent that any information in a NAFTA or WTO member country concerning knowledge, use, or other activity relevant to proving or disproving a date of invention has not been made available for use in a proceeding in the Patent and Trademark Office, a court, or any other competent authority to the same extent as such information could be made available in the United States, the Commissioner, court, or such other authority shall draw appropriate inferences, or take other action permitted by statute, rule, or regulation, in favor of the party that requested the information in the proceeding.¹³

This provision requires the PTO or a court to "draw appropriate inferences" when evidence relevant to the date-of-invention issue is not obtainable from an entity in a WTO member country. At this time, the practical effect of this change is unclear.

Quite likely, if a party to an interference declines to provide required discovery, the PTO will assume as fact precisely what the party seeking discovery hopes to prove. Indeed, the PTO can grant judgment against a party for failure to provide discovery ordered by the PTO. Thus, the PTO has ample power to motivate parties to comply with discovery orders. But the drawing of adverse inferences or the granting of a judgment provides no incentives for nonparties to provide discovery. Using inferences fairly when a nonparty declines to provide discovery may prove difficult. But this potential problem will not often arise, for discovery in interferences is narrowly circumscribed, and discovery from unrelated third parties rarely becomes necessary.

Testimony and Exhibits

In the trial phase of an interference, called the "testimony period," the parties present evidence in the form of testimony of various witnesses. The parties may supplement this testimony with exhibits, consisting of documents of all kinds, including laboratory notebooks, internal reports, publications, and the like. Anything relevant to the issues in the interference may be introduced as an exhibit.

Recently adopted rule changes require presentation of direct testimony of witnesses in the form of affidavits or declarations. However, the direct testimony will not be received by the PTO unless the witness is produced for cross-examination by attorneys representing the adverse party. Cross-examination occurs before a court reporter. Though the scope of cross-examination can be rather broad, at least in theory it is limited to issues presented by the direct examination.

The PTO sets the length of the testimony period allotted to each party. The junior party, i.e. the party with the later filing date, goes first, presents testimony, and introduces exhibits. Then the senior party, i.e. the party with the earlier filing date, has a period for presenting testimony and introducing exhibits.

As a result of this sequencing, the senior party enjoys the advantage of seeing the junior party's entire case before the senior party must identify witnesses and documents. Because the senior party will win the interference on the basis of an earlier filing date if the junior party cannot prove the earlier date of invention, the senior party can choose to offer no testimony and documentary evidence, and that decision need not be made until after the junior party's testimony period has ended.

Often, after the junior party presents testimony and introduces exhibits, the PTO finds the proof insufficient to establish conception and reduction to practice. In that event, the senior party can win the interference whether or not he or she provided testimony or documentary evidence.

Briefing and Final Hearing

After introducing their testimony and exhibits, the parties will compile the evidence and file the resulting record in accordance with PTO rules. Then the time has come for the final phase of the interference: briefing and final hearing.

In this phase, the parties to the interference submit their briefs on the relevant issues and, after briefing, appear before a three-member panel of the PTO Board of Patent Appeals and Interferences. At this hearing, no witnesses appear before the Board. Instead, the final hearing consists solely of oral argument by counsel for the parties. After the final hearing, the Board considers the case and ultimately renders its decision.

Other Ways to Prevail in an Interference

Proving earlier conception or reduction to practice is neither the only aspect of an interference nor the only way to win. Interferences can be decided without any testimony about the date of invention. For example, as previously noted, a party might prevail by successfully attacking the patentability of the opponent's invention without even offering proof of his or her own conception or reduction to practice.

Abandonment, Suppression, or Concealment

In the United States, an inventor is not entitled to an invention if he or she abandons, suppresses, or conceals it between the time of invention and the time of filing an application for patent. Thus, suppose an inventor discovered the invention in 1990 but waited until 1994 to file a patent application. Meanwhile, another inventor invents the same invention in 1993 and immediately files for a patent. When both applications are pending, the examiner discovers the conflict and declares an interference.

In the interference, the 1993 inventor might prevail over the 1990 inventor by proving that the four-year delay between invention and filing constituted abandonment, suppression, or concealment. If the PTO agrees, then the 1990 inventor cannot rely on the evidence about making the invention in 1990. To avoid this result, the inventor must provide a sufficient excuse for the delay in filing the application, such as by showing that there was reasonably continuous activity relating to the invention during the period in question. If the inventor cannot show such an excuse for the delay, he or she will be limited to the 1994 filing date and will lose the interference to the 1993 inventor, who also filed a patent application in 1993.

Under United States law, priority of invention is awarded to the first to invent, but early disclosure of the invention to the public forms an important part of the American system. Although there is no fixed time for how long the patent applicant can wait after he or she actually makes the invention to file a patent application, the cases on abandonment, suppression, or concealment show that when that period of time begins to exceed two years, the PTO will assume abandonment, suppression, or concealment, and thus require proof of an excuse.¹⁴

Derivation

Section 102(f) of United States patent laws states that an applicant cannot be granted a patent if "he did not himself invent the subject matter sought to be patented."¹⁵ Under this provision of the statute, a party to an interference might be able to invalidate the other party's patent by proving that the other party is not the true inventor. One way to do so is by proving "derivation."

By proving "derivation," a party (we'll call this person the "inventing party") can obtain an award of priority regardless of whether he or she was first or last to reduce the invention to practice. To establish derivation, the inventing party must prove that he or she conceived of the invention and communicated the conception to the other party (we'll call this person the "deriving party").

Proof of derivation will require witness testimony and documentary evidence, and usually will require documents in the possession of the deriving party. Ordinarily, the opponent's documents are difficult to obtain in interferences. However, if the inventing party can show that he or she communicated the invention to the deriving party, the PTO typically will grant access to the relevant documents in the possession of the deriving party.

If the inventing party proves conception and communication of that conception to the deriving party, then the deriving party is not considered an inventor and is precluded from obtaining a patent.

Introducing Patent Claims More Than One Year After the Patent Issues

According to § 135(b) of the U.S. patent laws, claims introduced into a patent application to provide a basis for an interference with a patent of another party must be added within one year of the issuance of the patent. For example, if a patent issues and a patent applicant does not introduce the subject matter of the patent claims into the application's claims until more than one year after the patent issues, the applicant can be prevented from getting into an interference with the owner of that patent. The inventor thus would not be entitled to the claims that would otherwise be in interference because of the one-year bar in § 135(b). This would be true even if the applicant actually made the invention before the patentee.

Under U.S. practice, the applicant need not introduce the exact patent claims into the application within the critical one-year period. It is enough that the application's claims are patentably indistinct from the patent claims.

Settlement of Interferences

Throughout the interference proceeding, the parties at any time might decide to resolve the conflict through a settlement agreement. Settling an interference, however, differs in some respects from the settlement of other disputes.

In settling an interference, the parties must provide for determining who would be entitled to the award of priority under U.S. law. If one or both of the parties has evidence of actually making the invention before the respective filing date, a common settlement procedure is to supply the other party with the documents showing conception and reduction to practice and then try to decide whether that evidence proves an earlier date of invention. If there are other issues involved, such as compliance with § 112 or patentability over the prior art, the parties could also try to work these issues out between themselves.

Often, parties to a settlement agreement will include license agreements providing for the licensing of the losing party by the winning party. These license agreements may include payment of royalties. It should be noted that such agreements could be entered into even if the parties choose to allow the PTO to make the decision of which party was the first to invent.

The rules permit a party to file voluntarily what is called a "concession of priority." In this statement a party concedes priority to the other party, and when the PTO receives such a paper, it will award priority of invention to the other party and terminate the interference.

To end an interference voluntarily the parties might also file an "abandonment of the contest." Similar to an express abandonment of a patent application, this document abandons the interference and any rights to the subject matter of the counts of the interference. Again, such an approach will prompt the PTO to terminate the interference in favor of the other party.

When parties choose to end an interference voluntarily, they usually will include in their settlement agreement either an abandonment of a pending application or a disclaimer of one or more claims of a patent. Most settlement agreements will require one or more of the parties to submit a concession of priority, abandon the contest, or take some action disclaiming a patent or abandoning an application.

If the parties reach any agreements that contemplate ending or settling an interference, they must file them with the PTO under § 135(c) of the patent laws. The PTO will, if asked, keep these agreements, which would include a settlement agreement and any associated license agreements, in a separate file not available to the public under ordinary circumstances. (The U.S. Government, however, does have access to these agreements if it wishes to investigate any possible violations of federal antitrust laws.)

Finally, § 135(d) provides for arbitration of interferences. In a settlement agreement, for example, the parties might agree to submit the interference to arbitration and be bound by the result of the arbitrator. This route is often chosen when the parties cannot agree on who is entitled to priority.

Summary

The valuable patent rights associated with some of the most important technological advances in world history have been determined through United States patent interferences. At least for the foreseeable future, these proceedings will continue to provide the forum for determining the ownership of U.S. patent rights when two or more inventors claim the same subject matter. Now, in light of GATT and TRIPs, virtual worldwide inventive activity will become the focus of interference proceedings. No longer will non-U.S. inventive activity give the U.S. inventor a leg up in the interference battles of the future.

Because of these dramatic changes to U.S. patent law, it is entirely appropriate, indeed vital, that all applicants for United States patents understand the basic terminology and concepts discussed in this paper so that they can anticipate the events that will arise in a typical patent interference in the United States. As of January 1, 1996, all non-U.S. R&D labs must begin to pay careful attention to their methods of keeping laboratory notebooks so that in some future U.S. patent interference they will be ready and able to prove their date of invention through conception, reduction to practice, and diligence toward that reduction to practice. Failure to develop adequate procedures could cause the loss of very valuable patent rights come the day when a patent interference is declared by the U.S. Patent and Trademark Office.

(2) 37 C.F.R. § 1.601(n).

(3) 11 App. D.C. 264, 276, 1897 C.D. 724, 731.

(4) Field v. Knowles, 183 F.2d 593, 601, 86 U.S.P.Q. 373, 379 (C.C.P.A. 1950).

(5) Liang v. Borger, 214 U.S.P.Q. 368, 372-373 (Bd. Pat. App. & Int. 1981), citations omitted; see also Moller v. Harding, 214 U.S.P.Q. 724, 729 (Bd. Pat. App. & Int. 1982).

(6) Kalnoki-Kis v. Land, 214 U.S.P.Q. 636, 641 (Bd. Pat. App. & Int. 1982).

(7) Gould v. Schawlow, 150 U.S.P.Q. 634, 643 (C.C.P.A. 1966).

(8) Id.

(9) 37 C.F.R. § 1.608(a).

(10) 37 C.F.R. § 1.608(b).

(11) A sample of the type of showing required is included in Appendix K.

(12) 37 C.F.R. § 1.623.

(13) Uruguay Round Agreement Act, Pub. L. No. 103-465, 108 Stat. 4809 (Dec. 8, 1994).

(14) As noted in the previous Section (Amended § 104), the PTO will take the position that these principles apply to foreign applicants proving dates of invention in advance of their filing date, although there is no clear statutory basis for doing so.

(15) 35 U.S.C. § 102(f).