The Leahy-Smith America Invents Act (AIA) marked significant policy shifts in the U.S. patent system, most notably the AIA’s transition from a first-to-invent to a first-to-file regime. Complementary to the first-to-file regime was the AIA’s expansion of the existing prior user rights defense to patent infringement, which is presently codified at 35 U.S.C. Section 273. This defense allows a prior commercial user of an invention who did not file a patent application to subject to certain requirements, continue such use without interruption despite the claim by a third party that such use infringes a subsequently issued patent covering the same invention. Pre-AIA, the prior user rights defense was significantly limited, being applicable only against patents claiming business methods (e.g., nontechnical inventions), but the AIA expanded the scope of the defense to generally include all patentable subject matter.

The AIA’s expansion of the prior user rights defense did not pass without restrictions. The most notable of these restrictions is Section 273(e)(5)(A), colloquially known as the “university exception.” This exception prohibits the assertion of the prior user rights defense where the patent in suit was, at the time the invention was made, owned or subject to an obligation of assignment to either an institution of higher education or a technology transfer organization related to such an institution. Whether the AIA’s expanded prior user right has served the policies its proponents advocated is difficult to assess; there have been no litigated assertions of the defense reported in the eight years following its enactment. Nevertheless, increasing university patent acquisition and enforcement activity, begun in the wake of the Bayh-Dole Act of 1980, continues to grow following the AIA, undoubtedly amplifying concerns among commercial entities about the growing number of university-originating patents that are exempt from the AIA prior user rights defense.

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