First Inventor to File: USPTO Derivation Proceedings Go Final

The United States Patent and Trademark Office (USPTO) announced today that it is creating a new proceeding designed to ensure the first person to file a patent application is actually the true inventor. The new proceeding will ensure that a person will not be able to obtain a patent for an invention that he or she did not actually invent. If a true inventor is not the first to file, the true inventor may challenge the first applicant’s right to a patent by demonstrating that the first application is claiming an invention derived from the true inventor.

This new procedure, called a derivation proceeding, is required thanks to the enactment of the Leahy-Smith America Invents Act (AIA), which went into effect on September 16, 2011. The AIA ushers in a great many changes to patent law and procedure, with the most significant being the change from first to invent to first to file, which does not actually become effective until March 16, 2013. The flavor of first to file adopted by the AIA is not the typical first to file system seen in many other jurisdictions around the world. The American flavor still provides a grace period, although it is peculiar to the inventors own disclosures and can be defeated by subsequent disclosures of third parties. The grace period is, therefore, quite fragile to the point that it is virtually non-existent. Much concern was voiced, however, over whether one could learn of an invention and then win a race to the USPTO. That is where the derivation proceedings come into play. The U.S. version of first to file is better stated as “first inventor to file.”

“Our historic shift to a first-inventor-to-file system reduces legal costs, improves transparency, and allows us to harmonize our patent system with the rest of the world, all of which will help U.S. innovators and strengthen our economy,” said Under Secretary of Commerce for Intellectual Property and Director of the USPTO David Kappos. “This derivation proceeding will ensure that under a first-inventor-to-file system, the inventor is always the one who obtains the patent. We’re pleased to release this final rule to the public months in advance of its implementation, to allow stakeholders greater time to prepare.”

The USPTO currently is seeking comment on its proposed rules for implementing first-inventor-to-file, which will also go into effect on March 16, 2013. Comments on the proposed first inventor to file rules are due no later than October 5, 2012.  For more see Defending the USPTO Interpretation of the New Grace Period and USPTO Publishes Proposed Examination Guidelines for First to File. Thus, the examination guidelines and interpretations are still in draft form, although I do not anticipate they will substantively change insofar as interpretations of the law are concerned.  These rules disclosed today relative to derivation proceedings are not proposed rules, but rather are final rules.


Comments and Revision of Proposed Rules

The Office received 251 written submissions of comments from intellectual property organizations, businesses, law firms, patent practitioners, and individuals. The comments provided support for, opposition to, and diverse recommendations on the proposed rules.  The USPTO did take into account the comments received and made a number of modifications to the proposed derivation rules.  There were 7 major differences between the final rules and the proposed rules identified by the USPTO.  They are as follows:

  1. The final rule clarifies that the phrase “same or substantially the same invention” means patentably indistinct (§ 42.401).
  2. The final rule also clarifies that the phrase “the first publication” means either a patent or an application publication under 35 U.S.C. 122(b), including a publication of an international application designating the United States as provided by 35 U.S.C. 374.
  3. The final rule clarifies that a petition for a derivation proceeding must be filed within the one-year period beginning on the date of the first publication of a claim to an invention that is the same or substantially the same as the earlier application’s claim to the allegedly derived invention (§ 42.403).
  4. The final rule clarifies the petition must show that the petitioner has at least one claim that is the same or substantially the same as the invention disclosed to the respondent (§ 42.405(a)(2)(ii)).
  5. The final rule clarifies that the petition must demonstrate that the inventor from whom the claimed invention was allegedly derived did not authorize the filing of the earlier application claiming the derived invention (§ 42.405(b)(2)).
  6. The final rule clarifies that the petition must show why the respondent’s claimed invention is the same or substantially the same as the invention disclosed to the respondent (§ 42.405(b)(3)(i)).
  7. The final rule eliminates the requirement that the petitioner must contact the Board to discuss alternate modes of service when the petitioner cannot effect service of the petition and supporting evidence (§ 42.406(b)). Instead, the final rule clarifies that: (1) upon agreement of the parties, service may be made electronically; (2) personal service is not required; and (3) service may be by EXPRESS MAIL® or by means at least as fast and reliable as EXPRESS MAIL® (§ 42.406 (b)).

Derivation Proceedings in a Nutshell

Derivation proceedings will be conducted by the Patent Trial and Appeal Board and proceed in a manner similar to inter partes reviews and post-grant reviews.  Unlike patent interferences, derivations will be conducted in a single phase without the use of a “count.” An inventor seeking a derivation proceeding must file an application. 35 U.S.C. 135(a). An inventor, however, may copy an alleged deriver’s application, make any necessary changes to reflect accurately what the inventor invented, and provoke a derivation proceeding by filing a petition and fee timely.

The petition that must be filed by the inventor alleging derivation must be filed within one year of the first publication by the earlier applicant of a claim to an invention that is the same or substantially the same as the respondent’s earlier application’s claim to the invention. Such publication may be the publication by the USPTO of an application for patent or by the World Intellectual Property Organization (WIPO) of an international application designating the United States. See § 42.403.

In addition to timely filing, § 42.405(b) requires that the petition identify the precise relief requested and also demonstrate that the claimed invention in the subject application or patent was derived from an inventor named in the petitioner’s application.  The petition must further state that the inventor named in the petitioner’s application did not authorize the filing of the earliest application claiming the derived invention. Furthermore, the petitioner must further show why the claim is the same or substantially the same as the invention disclosed to the respondent.

If the Director determines that the petition demonstrates that the standards for instituting a derivation proceeding are met, the Director may institute a derivation proceeding and that the determination of whether to institute a derivation proceeding is final and nonappealable. A derivation is unlikely to be instituted if the petitioner’s claim is not otherwise in condition for allowance, regardless of whether the standards have been otherwise satisfied.

Substantial Evidence and Practical Advice

Section 42.405(c) provides that a derivation is not sufficiently shown unless it is supported by substantial evidence.  This includes at least one affidavit addressing communication and lack of authorization.  Further, the showing of communication must be corroborated.

One open practical question is whether derivation proceedings will be at all useful.  How will the inventor alleging derivation be in possession of sufficient evidence to demonstrate communication and lack of authorization?  The best evidence of each will be in the hands of the party who is the alleged deriver, not the inventor claiming to be the source of the invention. Moreover, proving a negative (i.e., lack of authorization) may be challenging, as proving a negative can always be.

With this in mind inventors and companies that employ professional inventors will need more not less documentation relating to conception, reduction to practice and the circumstances of disclosure.  Who, what, when how and why will become critical in terms of access to the invention post conception, which is different than current requirements.  Under the current first to invent law evidence of conception, diligence and reduction to practice are required in order to prove one is first to invent.  In order to take benefit in a derivation proceeding that evidence will still be essential, but so will the particulars surrounding access to the invention.  Therefore, best practices will mandate more strict innovation records, which will be news to many who erroneously believed first to file would do away with record keeping requirements pertaining to invention.


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Join the Discussion

11 comments so far.

  • [Avatar for Gene Quinn]
    Gene Quinn
    October 24, 2013 07:22 pm


    For a derivation proceeding ordinarily the claims will need to be in condition for allowance, thus I would have to say that it would definitely need to be a non-provisional patent application.


  • [Avatar for Dan]
    October 24, 2013 05:19 pm

    Can a Provisional Application for Patent be used as the “application” to start a derivation proceeding, or must it be a Non-provisional Patent Application?

    Thank you,

  • [Avatar for Stan E. Delo]
    Stan E. Delo
    November 5, 2012 04:55 pm

    Randy and Gene-

    I am also not very sure where this effort is headed. From an American *prove me guilty* attitude, it seems as if they need to prove in some manner inequitable conduct, at least as far as legal representation is concerned. The inventor might very well not understand where the concept might go, but a good practitioner will usually be able to understand where the invention seems to be going, and what seems to be appropriate.


  • [Avatar for Gene Quinn]
    Gene Quinn
    September 17, 2012 10:56 am


    Frankly, I’m not sure. I haven’t worked through it myself but at these various roundtable events and conferences when someone raises this question that is the only thing anyone ever suggests as possibly being a solution. It is an extremely expensive solution and one that doesn’t wind up with the first inventor getting the patent. I suspect there is going to need to be litigation surround this which will force the USPTO to address it once it actually happens.


  • [Avatar for Randy Landreneau]
    Randy Landreneau
    September 16, 2012 11:50 am

    Gene –

    I’m not an attorney. How can post grant review cure a situation where a patentable invention was derived dishonestly from another?


  • [Avatar for Gene Quinn]
    Gene Quinn
    September 14, 2012 01:51 pm


    As unacceptable as it may seem, the recourse would be to file for post grant review.


  • [Avatar for Randy Landreneau]
    Randy Landreneau
    September 14, 2012 10:21 am

    Gene –

    1. If the true inventor doesn’t see the 18 month publication, then by the time the patent issues, it will normally be too late to petition for a derivation proceeding. Without the organization to spot a publication in time to petition for a derivation proceeding, or the funds to go through a derivation proceeding, the person who obtains the patent will be the first-to-file, not the first-inventor-to-file.

    2. If the invention information is made public by a dishonest party in order to stop the inventor from being able to get a patent, and the dishonest party does not file for a patent, the true inventor will not have any powers to enable discovery, and therefore his chances of prevailing in a derivation proceeding will be virtually nil. The inventor could have ample records of who had “access to the invention,” but he will not be able to force discovery to prove that a person who had access passed the information to another who published the information.

  • [Avatar for TGV]
    September 12, 2012 03:56 am

    From a pure first to file (European) perspective, a typical derivation case goes something like this; joint development agreement or joint venture goes wrong, and one of the (former) partners files an application. The dispute will then be that the other partner argues that because of let’s say the agreement he has the actual standing etc.

    Cases of pure theft are very rare or even non-existent.

    Also take in account that under first to file, any disclosure prior to filing kills (ie. is state of the art), so for example the scenario of a disclosure by the inventor at a trade show and the subsequent filing of that invention by a competitor does not work. For the new US rules it would be prudent to (as Gene always says) file first, disclose later, (also to preserve your rights abroad), and if that fails, and you end up in a derivation proceeding, you indeed need lots and lots of evidence…

    I do not think that there is a lot of discovery possible, so it is down to “run what you brung” with respect to evidence….

  • [Avatar for Stan E. Delo]
    Stan E. Delo
    September 11, 2012 11:13 pm


    Not quite the same as interferences by another name if I am not mistaken, because for one thing PTAB will be handling the cases, which seems like a very good idea to me, as long as they prove to be fair and impartial. Nobody can know that quite yet for sure, but I get a sense that they might be better and faster at resolving conflicts.

    There might be a few problems that would be new, one that has to do with the nature of derivation proceedings, and another associated with the new final rules.

    First is the more adversarial nature of derivation proceedings in my opinion, which Gene hints at in at least the last few paragraphs of this article. It seems as if all of the burden is shifted to the petitioner, and the defendant has no real or required reason to co-operate with the petitioner. In fact it might be incriminating for them to provide certain information, so they could always just plead the Fifth, and just say “Prove it!” I believe that is exactly what Gene is alluding to with his remarks about record keeping being Much more important now, instead of less or the simplifying of things.

    Second, the Director can trump the whole proceedings by a summary decision, shall we say? I have no problem trusting our current Director implicitly, but what if a future new Director is heavily biased in one direction or another? Maybe I am just being paranoid, but that doesn’t mean they might not actually be out to get me! (Independent inventor humor, just kidding;-) I would welcome any suggestions or facts that would prove me wrong in some substantive manner.


  • [Avatar for Anon]
    September 11, 2012 03:26 pm

    A big stink was made about interference practice and all we really did was put a new label on it and called it derivation. Actually that’s not completely true. We have made the derivation process even more difficult (as I understand it).


    Isn’t your comment more appropriate for discussing the new 102? Has anyone else noticed the not so subtle title change to that section? What has been dropped are three little words: “loss of right.”

    Arguably, with this major rewrite, the statutory bars (which should be recognized as a distinctively different thing than the definition of prior art) are gone.

  • [Avatar for Ron Hilton]
    Ron Hilton
    September 11, 2012 12:01 pm

    Is continuous diligence in reduction to practice actually still required? Or just proof of prior conception, followed at some point by communcation and lack of authorization?