TAKEAWAY: Institution of a derivation proceeding requires substantial evidence to show conception of the invention, reduction of the invention to practice, and a disclosure of the invention to an alleged derivative inventor. Thus, practitioners, inventors, and companies will need detailed documentation that shows the who, what, when, how, and why of the invention from conception to disclosure to a third party.

Section 3 of the America Invents Act (AIA), amended Section 135 of the U.S. Code to replace interference practice with derivation proceedings, which coincided with the change from a first-to-invent system to a first-inventor-to-file system. The changes to Sections 135 of the U.S. Code became effective on March 16, 2013, and were not retroactive. Thus, derivation proceedings only apply to applications (and any patent issuing thereon) having an effective filing date on or after March 16, 2013. Interference practice continues to apply to applications (and patents) having an effective filing date before March 16, 2013.

In order to institute a derivation proceeding, an applicant for a patent must file a petition to institute a derivation proceeding with the USPTO. The petition must set forth with particularity the basis for finding that an inventor named in an earlier application, without authorization, derived the claimed invention from an inventor named in the petitioner’s patent application. The petition must be made under oath, and must be supported by substantial evidence. The petition must be filed “within the 1-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 invention.” Similar to inter partesreview, the Director’s decision to institute (or not institute) a derivation proceeding is final and nonappealable.

After submitting a petition for institution of a derivation proceeding, the PTAB will conduct a three-part relationship analysis to determine whether the allegedly derived claims meet the “same or substantially the same” requirement to institute a proceeding. To date, no derivation proceedings have been instituted, and few opinions have been issued regarding the lack of institution. However, the petitions filed in Sports Nutrition Res. Ltd. v. Chemi Nutra, DER2013-00001, DER2015-00003 (December 31, 2014) are pending, and there is a chance that the PTAB will institute at least one of these derivation proceedings in 2016. If practitioners are considering filing a petition for institution of a derivation proceeding, Sports Nutrition is a good starting point for what is required to have a successful petition.