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January 17, 2008

Deform Ahead?

2007 may have passed, but the Patent Reform Act thankfully didn't. Passed in the House last session 220-175, it never made it to floor of the Senate in the 110th session. But it's not dead: key senators on the Senate Judiciary Committee remain committed to passage.

A 106-page report maps the terrain: first-to-file; apportionment of damages; scotching inequitable conduct charges, and further raising the bar for proving willfulness; post-grant opposition; litigation venue limits; authorizing the USPTO to require patentability searches from applicants; and other tweaks, such as third-party prior art submission; facilitating assignee prosecution; marking; and prior user rights.

From the report:

Congress has not enacted comprehensive patent law reform in more than 50 years. The object of the patent law today must remain true to the constitutional command, but its form needs to change, both to correct flaws in the system that have become unbearable, and to accommodate changes in the economy and the litigation practices in the patent realm.

First, questions have been raised regarding whether the current scope of what is patentable is too broad, and whether the current standard for obtaining a patent is too low.

Second, in recent years the cost and uncertainty of patent litigation has escalated, leading many to believe that it is an unbearable drag on the innovation that the patent system is supposed to foster.

Third, many patent applicants filing in the United States often seek patents in other countries for their inventions as well. Yet the United States’ patent system differs from every other patent system in the world in one major respect – it awards patents to the “first to invent,” while every other patent system uses a “first to file” rule.

S. 1145, the Patent Reform Act of 2007, has three primary goals: (i) to improve patent quality and the patent application process; (ii) to improve and clarify several aspects of patent litigation, including the creation of a less expensive, more expeditious administrative alternative to litigating patent validity issues; and (iii) to make the United States’ patent system, where it is useful to do so, more consistent with patent systems throughout the rest of the industrialized world.

In general, the numbered sections of the Act do the following:
(1) title the Act the Patent Reform Act of 2007;
(2) change the system to a “first-inventor-to-file” system;
(3) make it simpler for patent applicants to file and prosecute their applications;
(4) codify and clarify the standard for calculating reasonable royalty damage awards, as well as
awards for willful infringement;
(5) create a relatively efficient and inexpensive administrative system for resolution of patent
validity issues before the USPTO;
(6) establish the Patent Trial and Appeal Board;
(7) provide for eventual publication of all applications and enhance the utility of third parties’
submissions of relevant information regarding filed applications;
(8) improve venue in patent cases and provides for appeals of claim construction orders when
warranted;
(9) give the USPTO the ability to set its fees;
(10) remove the residency restriction for judges on the United States Court of Appeals for the
Federal Circuit;
(11) authorize USPTO to require patent searches with explanations when a patent application is
filed;
(12) codify and improve the doctrine of inequitable conduct;
(13) give the Director of the USPTO discretion to accept late filings in certain instances;
(14) limit patent liability for institutions implementing the “Check 21” program;
(15) end USPTO “fee diversion”;
(16) make necessary technical amendments; and
(17) set the effective date of the Act.

Many of the major thrusts of the legislation are wrong-headed, based upon false and ignorant presumptions. The legislation has been largely driven by anti-patent interests, primarily serial infringers in the computer-related industries that would like to lessen payment of what they consider "patent taxes." At least one major issue that needs addressing is untouched: the standard for obviousness.

The bill has drawn criticism from businesses in numerous industries, and several Republican lawmakers.

To become law after what should be tumultuous debate and then passge in the Senate, serious in-conference horse-trading would need to occur to reconcile differences in the House and Senate versions, followed by lame duck Dubya scribbling his signature to an controversial bill opposed by many moneyed interests in the Republican camp. All this in an election year.

Aspects and viewpoints on the proposed legislation holistically and by issue have been covered repeatedly in the Patent Prospector in the "Patent System" category; browse for some lively reading.

Posted by Patent Hawk at January 17, 2008 12:16 AM | The Patent System

Comments

Hey Hawkie - I don't like this patent deform any more than you do for all the reaons people of hashed over on the web.
The 2 nasty provisions are watering down of damages and requiring a search and patentability analysis (if it werent for the inequitable conduct and the estoppel issues, this would be no big deal whatsoever).
That being said, it appears that the damage stuff has been watered down somewhat so that this is less of a "patent repeal act."
If this is the case, it may pay for opponents to agree to this bill now (with hopefully more watering down of the damage provisions and removing the required search or putting in a proviso that the required prior art analysis is inadmissable in litigaqtion), under the assumption that the next congress/president could provide an even more patent-hostile environment.
Thoughts?

Posted by: anonymousAgent at January 17, 2008 6:59 PM

in reply to anonymousAgent -

There is no reason to assume that Hillary Clinton is going to be patent hostile; sharp cookie, she just needs a bit of education.

There is no reason for this dookie bill to become law.

Thanks for asking.

Posted by: Patent Hawk at January 18, 2008 1:34 AM