Vetter, Greg R., Are Prior User Rights Good for Software? (March 17, 2014). U of Houston Law Center No. 2014-W-1. Available at SSRN: http://ssrn.com/abstract=2410689

“The America Invents Act (“AIA”) gave modern patent law in the United States a general prior user rights defense. The patent right is enforced via infringement litigation, but enterprises sometimes obtain patents for defensive purposes. Alternately, an enterprise that does not pursue a patent for an invention may choose to use the invention under trade secrecy protection. However, trade secrecy protection leaves a prior user vulnerable because a later inventor may patent the innovation and enjoin the prior user from further use. Styled as an infringement defense for a “prior commercial use,” the AIA defense replaces a decade old “earlier inventor” defense that arose from a software system patent infringement case and applied only for business method patents. This article assesses the AIA’s prior use defense from the perspective of software technology in view of the contentious issues around software patenting. It concludes, first, that courts should interpret the defense, or congress should alter it, to ensure its efficacy for software. Facially, the defense suggests a manufacturing motif, although its applicability to commerce in software may be stronger than suggested at first glance. Second, this article assesses the potential impact of a prior use defense on intellectual property protection in software. Some have posited that, as a general matter, the defense may create an incentive to favor trade secrecy over patenting. Regardless of the strength of that logic for other technologies, it seems lacking for software. While the use of the defense for software patent infringement will depend on the defense’s efficacy, there is also the question as to the defense’s impact on software patenting. One potential impact is on defensive patenting. Will software firms engage in less defensive patenting if there is an efficacious prior use defense?”