Senate Patent Reform Bill on Prior User Rights

Under current law, “prior user rights” may offer a defense to patent infringement in certain limited circumstances, including when the patent in question is a “business method patent” and its inventor uses the invention, but never files a patent application for it. If the same invention is later patented by another party, the prior user may not be liable for infringement to the new patent holder, although all others will be.

Section 4 of the Patent Reform Act of 2007 (S. 1145) notes that the bill, as introduced, would have extended prior user rights to all kinds of patents – not just business method patents – but the persuasive outcry from the university and tech transfer communities limited the amendment of the prior user right defense to one that simply alters paragraph (b)(6) of section 273 to clarify that “affiliates” of the user may also assert the defense. Affiliates include those who caused or controlled the acts that were performed that give rise to the defense. Additionally, Section 4 of the Act instructs the Director of the USPTO to conduct, and provide to Congress, a study with recommendations on prior user rights (both in the United States and abroad) within two years of enactment of the Act, in order to determine whether further Congressional attention is warranted.