On the issues:

The issue of awarding damages based on a “patent’s specific contribution over the prior art” has been a major point of contention among stakeholders. We suggest a different approach that would maintain the current multi-factored analysis and define limited circumstances in which apportionment may apply. We recognize that in some cases where the patented component is an insignificant basis for market demand, damages may be based solely on the market value of the patented component. Additionally, we support including procedural safeguards that seem to enjoy broad support from other stakeholders.

Furthermore, we maintain strong concerns that the creation of a new proceeding within the U.S. Patent and Trademark Office to permit extended administrative challenges of validly-issued patents could improperly question the reliability of an emerging company’s intellectual property, often the core asset. S. 1145 would allow third parties an alternate venue to repeatedly challenge a patent, using lower evidentiary requirements, throughout the patent’s life. We support the approach in the House with one fixed post-grant opposition and an enhanced inter partes re-examination.

We also are concerned that the legislation does not curtail the “inequitable conduct” defense. The present legislation codifies the current intent standard but lowers the standard of materiality to a prima facie case of unpatentability. We propose codification of a standard of clear and convincing evidence, and a two-pronged test that specifies knowing and willful deception regarding material information and an objective standard for determining whether a claim would have issued absent the misconduct.