The Clinton administration has introduced legislation to Congress to implement the GATT TRIPS Agreement. This legislation has been introduced under the so-called fast track procedure so that Congress must either accept or reject the entire package. Although Congress did not act on the package before going into recess before the November mid-term elections, a further session of this Congress will reconvene at the end of November to vote on the GATT implementation legislation. The most significant features of the proposed legislation in the intellectual property field are summarized below.

Patents

Two major changes are to be effected in U.S. patent law: first, the term of a patent is to be 20 years from filing of the "full" application and second, the requirement of 35 USC 104 that in considering acts of invention one can only consider acts that occur in the United States, Canada or Mexico is to be amended so as to cover acts carried out in all other GATT (or as it will be known after the Uruguay Round agreement comes into effect, the World Trade Organization (WTO)) member countries.

So far as the duration of the patent is concerned, after a 6-month transitional period, the 20-year term will run from the earliest of any series of continuations or divisional applications that was filed as a "full" application. In order to avoid prejudicing the rights of U.S. inventors, however, who unlike foreign inventors cannot take advantage of the Paris Convention to delay filing in the United States until one year after first filing of an application for an invention, a new provisional patent right is to be created. Such a provisional application will have to meet the general requirements of description and enablement set out in the U.S. patent statute but will not be required to contain claims. Provisional applications will not be allowed to claim priority from any foreign applications or any earlier U.S. application. Such provisional applications will not be examined and will be subject to a fairly low filing fee. The filing of such a provisional application will give one the right within one year to file a full application including claims. The 20-year term will run from the date of filing of that "full" application. In order to avoid hardship, the 20-year term from filing will be subject to a possible extension in certain situations. For example extensions of up to 5 years may be possible in situations where the grant of a patent was delayed because of an interference or a secrecy order or as a result of the fact that the patent was only granted after an appeal to the Board of Patent Appeals and Interferences or to a federal court.

The legislation also proposes a modification of the maximum term of currently existing patents or patents granted on applications filed before the new provisions come into effect. Under the transitional provisions such patents will have a term which is the greater of 20 years from the filing date of the "full" application or 17 years from grant, safeguard provisions are, however, introduced to protect those who have "commenced" or made "substantial investment" before the change of the law on the assumption that the patent would expire 17 years from its grant date.

The second major change is the extension of the right to establish inventive activity based on acts outside the United States, Canada and Mexico. This change is of significance not only in interference practice but also in ex parte proceedings since it will now permit those who made an invention outside North America to "swear behind" publications that occur less than one year before the actual filing of the U.S. application if they can show appropriate activity in a WTO member country. It should, however, be noted that the standard of proof required for demonstrating such inventive activity is the same as that required if the inventive activity is carried out in the United States and that if the laws of a country or the steps taken by a party prevent U.S. discovery procedures from being applied properly, any court or tribunal considering the issue may "draw appropriate inferences" and presumably exclude the evidence in question. A major practical consequence of this change is that persons in any WTO country who may wish to take advantage of this provision should ensure that their record-keeping, having regard to the making and documentation of inventions, complies with U.S. standards. One particular point to note is that the making of the invention must be able to be corroborated by someone who is not part of the inventive entity. Hence, it might be desirable to ensure that, for example, laboratory notebooks are inspected by someone outside any likely "inventive entity" on a regular basis so that such corroboration can be established.

The other major change in the patent area is a change in the definition of infringement to make it clear that an offer for sale of an infringing product in the United States or an importation of an infringing product into the United States constitutes an act of infringement whether or not any actual sale occurs.

Copyrights

The major changes in the copyright field are the bringing into copyright protection of certain works that are currently in the public domain either as a result of never having had copyright protection in the United States or as a result of protection having lapsed for certain reasons. Other changes relate to rental rights in computer programs and to various aspects of the protection of sound recordings.

Situations in which works will become subject to copyright protection, which either had previously not existed or had lapsed, are the following:


All of such works are referred to in the statute as being "restored copyrights" even if they never in fact previously existed.

Rights under such "restored copyrights" are limited in respect of those who have acted in reliance of the fact that no copyright existed in respect of the work in question. In respect of such parties it will be necessary to have notified them that copyright has been restored, either by publishing a notice in the Federal Register or by direct notification before action for enforcement of the copyright can be taken. Furthermore, for a period of 12 months after notification, any such party may sell off previously manufactured stock or may continue to perform or display the work publicly and indeed authorize others to conduct such activities. Furthermore, any derivative work created prior to copyright being restored in the main work may continue to be used subject to payment of compensation to the party whose copyright has been restored.

The change in respect of protection of computer programs is to abolish the sunset provision that previously existed in respect of rental rights for such programs.

So far as sound recordings are concerned, federal civil and criminal remedies are now provided against those who fix sounds or sounds and images of live musical performances, transmit or otherwise communicate to the public the sounds or sounds and images of a live musical performance or distribute or offer to distribute or offer to sell, rent or offer to rent or traffic in any copy or phonorecord fixed as described previously. The term "traffic in" is defined as transporting, transferring or otherwise disposing of, to another, as consideration for anything of value or to make or obtain control with intent to transport, transfer or dispose of the products in question. It is specifically provided that state law remedies are not preempted by the new federal statutes.

Trademarks

There are two major changes contemplated in the Lanham Act, namely:


The new law will go into effect one year after the World Trade Organization comes into operation with the exception of the provisions relating to the terms of patents which will come into effect 6 months after that date.