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May 17, 2007

Between the Lines

John Sullivan, General Counsel of the U.S. Department of Commerce (DOC), has penned a note of support for its child, the patent office, and sent it off to those good folks on the Hill considering patent reform.

Sullivan feels that "quality is a shared responsibility," favoring best mode disclosure and stern rebukes for hiding prior art confectionaries; as Sullivan obliquely puts it, "more and better information." Sullivan draws an inapt analogy, viewing patent examination as a trial:

Requirements for more and better information to support a patentability determination are comparable to current requirements in virtually every judicial and administrative proceeding for parties to bring the most relevant, reliable and complete information before the decision-making body.

Praising the patent agency's Accelerated Examination Program, and scorning applicants that would like to preserve the full scope of their patent rights by adhering to the law and not searching the prior art, Sullivan wants better definition surrounding inequitable conduct as a way to statutorily require prior art search by applicants, all except the puniest inventors (Sullivan calls them "micro-entities"). Sullivan is of no mind to consider the impracticality of requiring applicant prior art search without consequence except the most dire (loss of patent grant).

Consistent with favoring "more and better information," Sullivan supports post-publication, pre-grant ex parte prior art submission. DOC likes the idea of peer review of patent applications.

DOC douses some cold water on statutory apportionment of damages, considering the current regime of reasonable royalty working.

While the appropriateness of damages awards in a number of patent cases may be subject to debate, DOC does not believe that a sufficient case has been made for a legislative provision to codify or emphasize any one or more factors that a court must apply when determining reasonable royalty rates.

Sullivan waffles on willfulness -

Modernization efforts should avoid perverse incentives that might make infringement simply "a cost of doing business."

For lack of a clear and substantiated case for major statutory reform in this area, DOC is unable to support all the provisions of section 5(a) of the bill as currently drafted. However, DOC can support a number of the narrowly drawn provisions of the section that we believe are appropriate, reasonable and fair to most interested parties.

Accordingly, the Department supports enactment of the amendments contained in section 5(a) that statutorily limit enhanced damages to determinations of willful infringement; require sufficiently specific notices of infringement; and provide that an inference of willfulness can not be drawn from the decision of an infringer not to present evidence of advice of counsel.

In other words, according to DOC, willful patent infringement is a problem, so let's make it hard to prove.

Mincing words, DOC backhandedly suggests being for first-to-file by being against expanding the prior use defense without first-to-file. But Sullivan is against first-to-file unless and until the rest of the world grants "a standardized one-year grace period to protect American inventors." In other wishes likely to be granted, Sullivan also wants a working snowcone machine in hell, with all the flavor toppings. Hal Wegner calls DOC's stance against first-to-file "a neanderthalic leap back, deep into the last century."

DOC does not wish to totally eliminate patent submarines: the current opt-out provision for pre-grant publication of patent applications, "considering that the current opt-out provision is a result of the careful balancing and sensitive negotiations that took place during the legislative process that led to the enactment of the American Inventors Protection Act of 1999."

Paternalistically protective, Sullivan worries that the proposed post-grant review process would tax USPTO resources. DOC likes post-grant review, but only the way that the patent agency likes it.

DOC thanks Congress for giving the USPTO authority to promulgate rules. Sullivan naturally remains silent on the counter-example of letting the agency run amok in rule-making, namely, the continuation limits about to be enacted that have the entire patent community in an uproar.

DOC demurs on much of an opinion regarding venue shopping and interlocutory appeals.

That the DOC is divergent with several proposed reforms in the Patent Reform Act of 2007 makes passage more problematic.

Posted by Patent Hawk at May 17, 2007 12:22 PM | The Patent System