Derivation Proceedings

Derivation proceedings are a narrow PTAB proceeding with specific applicability requirements: STATUTORY BASIS: 35 U.S.C. § 135; created by the Leahy-Smith America Invents Act (AIA, 2011); effective for applications with an earliest effective filing date on or after March 16, 2013; WHAT IT IS: an administrative proceeding before PTAB to determine whether a named inventor of a patent or application derived the claimed invention from a named inventor of a competing application; WHAT 'DERIVATION' MEANS: derivation occurs when one person takes another person's complete conception of an invention and files a patent application on that invention without authorization; the petitioner is claiming: 'I conceived the invention first; the respondent learned it from me and filed without my permission'; WHEN IT APPLIES — AIA CONTEXT: the AIA changed the US patent system from first-to-invent to first-inventor-to-file; in the new system, the first person to FILE wins (with some exceptions); derivation proceedings address the specific situation where the first filer is not the true inventor but instead derived the invention from the true inventor; PRE-AIA ANALOG — PATENT INTERFERENCE: pre-AIA § 135 provided for patent interferences to determine who was the first-to-invent; interference proceedings compared two competing claims and determined priority of invention based on conception and reduction to practice dates; derivation is NARROWER than interference: interference resolved all priority disputes; derivation resolves ONLY the specific claim that one inventor stole the invention from another; PRACTICAL RARITY: derivation proceedings are very rare; the more common scenario under AIA is: true inventor files first → no derivation issue; true inventor files second → they lost on priority (AIA first-to-file) unless derivation occurred; derivation is hard to prove and limited to the theft/misappropriation scenario.

Derivation requires proving three specific elements clearly and convincingly: ELEMENT 1 — COMPLETE CONCEPTION BY PETITIONER: the petitioner's named inventor must have conceived of a complete and operative invention; CONCEPTION: 'the formation in the mind of the inventor of a definite and permanent idea of the complete operative invention' (Burroughs Wellcome); the conception must be of the subject matter claimed in the respondent's application or patent; the invention must be complete — not just a general idea or research direction; ELEMENT 2 — COMMUNICATION OF THE COMPLETE CONCEPTION: the petitioner's inventor must have communicated the complete conception to a named inventor of the respondent's application; the communication must be corroborated by evidence beyond the inventor's own testimony (rule against self-serving testimony); WHAT COUNTS AS COMMUNICATION: email with technical details; written documents shared; conversations with witnesses who can corroborate; shared code or prototypes; lab notebooks with witness signatures; meeting notes; presentations; TIMING: the communication must predate the respondent's conception (or at least predate the respondent's filing date); ELEMENT 3 — FILING BY RESPONDENT WITHOUT AUTHORIZATION: the respondent filed an application on the derived invention without the authorization of the petitioner; the respondent is not entitled to a patent on an invention they took from the petitioner; STANDARD OF PROOF: petitioner must prove derivation by a PREPONDERANCE OF THE EVIDENCE; SUPPORTING EVIDENCE: corroboration is critical for all elements; the stronger the corroboration, the more persuasive the case; lab notebooks; emails; technical documents; witness declarations all serve as corroboration; CLAIM MAPPING: petitioner must show that the respondent's claims correspond to the petitioner's conception — claim charts help establish this.

Derivation petitions have strict timing and procedural requirements: FILING DEADLINE: 35 U.S.C. § 135(a): petition must be filed within ONE YEAR from 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'; the triggering event is the PUBLICATION of the respondent's application — not its filing; WHAT COUNTS AS PUBLICATION: publication of the application itself (18-month publication under § 122); grant of a patent; publication of an issued patent; once the respondent's claim is published, the 1-year clock starts; FILING WITH PTAB: the petition is filed with PTAB under 37 C.F.R. Part 42, Subpart E (Derivation Proceedings); PETITION CONTENTS: identify the applications/patents at issue; state the basis for the derivation claim; include claim charts showing the claims are directed to the same invention; include supporting evidence; include a declaration from the petitioner's inventor(s); CLAIM CORRESPONDENCE: the petitioner must show that there is at least one claim in respondent's application that 'corresponds to' a claim in petitioner's application — i.e., the claims are directed to the same or substantially the same invention; FILING FEE: $400 (small entity); $200 (micro entity); PRELIMINARY CONFERENCE: PTAB reviews the petition and may hold a preliminary conference to determine if the proceeding should be instituted; INSTITUTION THRESHOLD: PTAB institutes the proceeding only if the petition demonstrates a reasonable likelihood that the derivation claim will succeed — the claim chart and evidence must make a threshold showing; SEPARATE FROM DISTRICT COURT: a derivation proceeding does not prevent the petitioner from filing a civil action — § 135(b) allows a civil action for derivation in district court; the civil action must also be brought within one year of publication.

Derivation and interference are related but fundamentally different proceedings: PRE-AIA PATENT INTERFERENCE (§ 102(g)): SYSTEM: first-to-invent; TRIGGER: two applications or an application and an existing patent claiming the same patentable invention; PURPOSE: determine which party invented the invention FIRST; STANDARD: priority of invention = conception + reduction to practice (actual or constructive); parties could 'swear back' prior art by proving earlier conception + diligence; COUNT: the central disputed patentable subject matter; OUTCOME: priority awarded to the first-to-invent; the losing party's claims canceled or awarded to the winner; COMMON IN: 1980s-2000s; technology races (biotech; semiconductors; software); BROADER SCOPE: interference resolved ANY priority dispute between parties — even when both invented independently; AIA DERIVATION (§ 135): SYSTEM: first-inventor-to-file; TRIGGER: competing claims to the same invention where petitioner claims respondent derived the invention from petitioner; PURPOSE: determine whether DERIVATION (theft/misappropriation) occurred — NOT who invented first in the abstract; STANDARD: petitioner must prove complete conception + communication + unauthorized filing (a higher bar than mere priority); CANNOT resolve mere 'who invented first' disputes — if two parties independently invented, the first to file wins and there is no derivation; MUCH NARROWER: derivation is ONLY for the theft scenario, not for legitimate independent invention races; VERY RARE: pre-AIA interferences were relatively common (thousands per year); AIA derivation proceedings are extremely rare (fewer than 100 per year) because the first-to-file system resolves most priority disputes without PTAB; TRANSITION RULES: interference proceedings still apply to applications/patents with a pre-March 16, 2013 effective filing date; derivation applies to applications filed on or after March 16, 2013.

Derivation proceedings can result in significant remedies affecting patent ownership: PTAB REMEDIES: AWARD OF PATENT TO PETITIONER: if PTAB finds derivation, it can order that the derived claims be canceled from the respondent's patent or application and allowed to proceed to grant in the petitioner's application; JUDGMENT OF UNPATENTABILITY: PTAB can enter judgment that the respondent is not entitled to the claims at issue; CANCELLATION: the respondent's claims that correspond to the petitioner's invention can be canceled; CIVIL ACTION ALTERNATIVE (§ 135(b)): within one year of publication of the respondent's claims, the petitioner may file a civil action in district court instead of or in addition to a PTAB derivation proceeding; the district court can also award the patent to the correct inventor; the district court action and PTAB proceeding can run concurrently (though courts may stay the civil action pending PTAB); LIMITATIONS: derivation cannot result in BROADENING the petitioner's claims — only the claims that correspond to petitioner's conception can be awarded; derivation does not affect unrelated claims in the respondent's patent; PRACTICAL CHALLENGE: even winning a derivation proceeding can be expensive and slow; by the time the proceeding concludes, the derived invention may have been on the market for years; PREVENTION: document conception carefully (lab notebooks with dated, witnessed entries); use NDAs before discussing inventions with potential partners; be careful about what is disclosed before filing a patent application; file quickly after completing conception to minimize the window for derivation; INVENTOR DECLARATIONS: all inventor declarations filed with USPTO certify that the named inventor is the true inventor; a false declaration = inequitable conduct; derivation proceedings can expose false declarations.