Sens. Patrick Leahy (D-VT) and Orrin Hatch (R-UT) and Reps. John Conyers (D-MI) and Lamar Smith (R-TX) introduced patent reform bills to Congress. The bills are similar to the one that passed the House last year, but failed to make it to the Senate floor for a vote. BNA (subscription service) provides some details on the bills. Text of the Senate bill and the House bill are here.
What’s in the Bills?
The bills continue to include the controversial provisions regarding apportionment of damages for patent infringement. Apportionment would limit damages to what can be shown in the invention that contributed to the demand over the prior art. This would be a significant hurdle.
Other provisions in the current bills that were retained from the prior bill would significantly change patent practice. The US would change from a first-to-invent regime to a first-to-file regime. This would eliminate interference practice.
As noted by patent commentator, Hal Wegner, this provision of the House bill would only take effect once the “major patenting authorities” of the world adopt the one year grace period that currently exists under US law. This means that the first-to-file provision won’t take effect until Europe and Japan scrap their absolute novelty regimes and switch to the US system where the inventor may publicly disclose or offer to sell his invention up to one year prior to filing a patent application. Guess what? That’s never going to happen.
The bills have a number of other provisions as well. They seek to codify the Federal Circuit’s decision regarding willful infringement, In re Seagate Technologies. The new bills adopt a post-grant procedure that would expand the current inter partes reexamination practice and allow challenges to patents within 12 months of their issuance. Forum shopping would be restricted by the venue provisions. Mandatory interlocutory appeals would be permitted for claim construction. This is to address the high reversal rate at the Federal Circuit on this issue. Finally, the bill would eliminate the “Baldwin Rule” which requires that Federal Circuit judges live within 50 miles of Washington, D.C. The purpose of this change is to attract a larger pool of potential judges.
What’s Not in the Bills?
The bills do not address inequitable conduct, but Sens. Hatch and Leahy recognize that some language addressing this issue will be added to the bills.
Several other controversial proposals that were in the previous bills are not in the new bills. These include the requirement that applicants perform a prior art search and submit a search report and analysis. The PTO had been pushing strongly for this provision. The prior bills also would have eliminated the opt out provision for publication of the application 18 months after filing. Currently, applicants that attest that they will not be filing outside the US can request their applications not be published. The prior bills contained a subject matter exclusion for tax planning methods. This exclusion is not present in the new bills.
Reaction
As expected, the software industry and related tech companies praised the bills, as they did the previous versions. The Coalition for Patent Fairness voiced enthusiasm for the bill. Michael Holston of Hewlett Packard said the bill would allow his company to focus more on innovation instead of responding to frivolous lawsuits. Robert Holleyman of the Business Software Alliance and D. Bruce Sewell of Intel Corp. characterized the current patent system as “outmoded” saying that we can’t afford to wait to pass the legislation.
Patently-O posted a guest post by Michele Lee, Head of Patents and Patent Strategy at Google, strongly supporting reform.
On the other side of the debate, Jim Greenwood, president of the Biotechnology Industry Organization, released a statement saying that his group supports patent reform, but remains concerned about many of the proposed changes. Senior Vice President Ken Johnson of the Pharmaceutical Research and Manufacturers of America similarly noted that the bills do not address the concerns of his group, pointing specifically to the damages provisions that would weaken patents.
The Innovation Alliance and the Manufacturing Alliance on Patent Reform also expressed concern over the damages provisions in the bills. Representatives from Corning, Dolby Labs., and Monsanto likewise decried the proposed changes to the damages provisions. Stan Fendley of Corning was disappointed that this provision is in the new bills after an entire year of debate on the issue. Monsanto also criticized the post-grant opposition proposals saying that patent owners would now be harassed on a piece-meal basis.
Similarly, critics have noted that even after extensive debate in the last Congress, the bills remain largely unchanged from the prior versions.
Will Patent Reform Make it Through Congress This Time?
One answer is that it is too early to tell. Several major changes have occured since the prior bill was debated. One is the new administration. The Obama administration seems to be more amenable to patent reform than the Bush administration was. The Bush administration was generally critical of the bills in Congress last year. The Obama administration hasn’t completely shown its hand yet, but the discussion of patent reform did make it into Obama’s campaign materials on technology, where he called for “gold-plated” patents.
The other major change is that the economy has continued to tank further. Both sides will argue that their position will help, or at least not further hurt, the economy. Pro-reformers argue that frivolous litigation and high damage awards cost their companies jobs and keep them from focusing on litigation. Those opposed to the changes argue that they will reduce the value of patents, which are the new life-blood of our economy. Reducing the value of patents will cause companies to reduce jobs and not focus as much on innovation.
Stay tuned to see who wins the debate.
March 6, 2009 at 10:51 am |
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