The debate on patent reform seems to be a rerun of the debate in the previous Congress. Will there be a different outcome this time? Only time will tell.
The latest development in the debate is the introduction of a competing Senate bill (S. 610) by Sen. Jon Kyl (R-AZ). BNA (subscription service) is reporting that Sen. Kyl’s bill is identical to the bill he proposed last September in the wake of the failure of the other patent reform bill then pending in the Senate.
S. 610 differs from the earlier introduced bills (S. 515 and H.R. 1260) in several respects. First, S. 610 does not seek to codify the Federal Circuit’s In re Seagate decision regarding inequitable conduct. It does, however, seek to toughen the standard for proving inequitable conduct. Second, S. 610 does not contain the controversial provision of providing for interlocutory appeals on claim construction, a provision the Federal Circuit seems opposed to.
S. 610 retains the “applicant quality submission” language that has been removed from S. 515 and H.R. 1260. Instead of requiring applicants to perform searches and submit the closest prior art with analysis with respect to the claims, S. 610 provides that the PTO may “offer incentives to applicants” to submit such search reports. In light of recent PTO activities, this is an extremely dangerous provision.
S. 610 also shares several provisions in common with S. 515 and H.R. 1260. These include the limitation on venue selection for infringement suits, a change to a first to file system (which will likely never happen under the current wording in the bills), and a new post-grant review procedure. In addition, S. 610 retains the controversial “second window” for such reviews that has been deleted from S. 515 and H.R. 1260. The “second window” provides for post-grant review proceedings to be brought by any entity that has been charged with infringement of the patent. Unlike the post-grant proceeding that immediately follows a patent’s issuance, the “second window” proceeding could be brought any time during the life of the patent.
Like H.R. 1260, it does not seek to repeal the Baldwin Rule that
requires Federal Circuit judges to live within 50 miles of Washington,
D.C.
Sen. Kyl’s bill, not coincidentally, was introduced on the eve of the mark-up session for S. 515. Although it’s good to see that there will be alternative proposals and debate on the issues, simply repeating the steps of the previous Congresses doesn’t seem like the most efficient way to achieve any type of agreement.
March 25, 2009 at 3:04 pm |
THEY WILL BE AT IT AGAIN-ANOTHER BAILOUT FOR 2009!!!!
It came as no surprise that Senate Minority Whip Jon Kyl (R-AZ) had recently introduced HIS latest Patent Reform Act (S610) a copycat of his last version (S3600).
It again includes a “Check 21″ exception (sec. 13,): “With respect to the use by a financial institution of a check collection system that constitutes an infringement under subsection (a) or (b) of section 271, the provisions of sections 281, 283, 284, and 285 shall not apply against the financial institution with respect to such a check collection system.”
Although a small Technology Company named Data Treasury and its patents were NOT specifically mentioned, the intent of the exception is aimed directly at Data Treasury and its on going litigation against the banking industry for infringing upon its “Check Collection” remote image capture technology.
If passed, the exception would shift the financial responsibility for infringement to the American Taxpayer. Billions of dollars in taxes would be passed on to us in the name of (honesty and justice). The U.S. Commerce Department has recently objected to this type of legislative provision. Such a law would pave the way for Congress to start interfering in legal cases on behalf of the highest bidder. The Commerce Department — the parent agency of the Patent and Trademark Office — also pointed out that “limiting patent holders’ rights and remedies in this instance could reduce innovation in the technology area.” In other words, revoking someone’s property rights affects not only the disenfranchised property holder but also the next round of inventors. In this instance, moreover, Congress would be sending the bill for the bailout to us — the taxpayers. All this makes for quite a lobbying coup. The banking industry makes off with a few extra billion dollars, robs a small business of its intellectual property and again sticks taxpayers with the tab. Legislation should not be used to grant retroactive legal immunity to large corporations that willfully ignored the property rights of a small, innovative company. And no elected official who has pledged to maintain the integrity of our legal system should be a party to such a travesty. The windfall is not 2-6 billion of savings to the banks, but at 40 billion checks per year for the major institutions at $1 to $2 per check the savings is $40 to $80 billion dollars. The vast majority of banks who offer RDC have stated they have seen growth in deposits due to RDC. Deposits represent the lifeblood of any financial institution and have pervasive impacts throughout the organization. Recent research conducted by RemoteDepositCapture.com has revealed that for every dollar a financial institution has in deposits, they make over $2 in loans and investments. Of course Data Treasury is suing for 5 cents per check and settling for even less. The industry used to claim that it cost close to $2. per check so what justifies the banks STEALING this for FREE , except why pay if you are not forced to. The proposed legislation places the US government in the position of accountability. Since the US government both issued and affirmed the validity of the DT patents, it seems to place the government in the curious position of stipulating patent validity without having any control over the question of whether infringement is or is not occurring and with the bank’s interest’s non-aligned with the government’s interests. The enactment of such an exception would result in litigation against the federal government for DT to seek compensation for the taking of its private property. The federal government would have to pay $1 billion+ to Data Treasury over 10 years as compensation for taking its property under the exception, according to estimates (albeit, a conservative estimate) by the Congressional Budget Office. Senator Kyle by championing this exception should be made (with a clear answer devoid of spin) to explain why exactly, banks should be immune to patent law that applies to everybody else and why the public should fund any patent royalties when infringing returns billions in operational savings to the banks !! Source: 2008 FDIC Data, RemoteDepositCapture.com
The funny part about this campaign is that everybody will take a sudden, but belated, interest in this fiasco if and when the bill comes due and has to be paid by the American taxpayer. But he does not mind, do he? After all, I’m sure he wants to show as much love to Bank of America, Citibank, etc. as Citibank and its group shows to him!! All this on the heels of the recent Wall Street bailout. I guess business as usual is still the main diet of some elected officials!! DISGRACEFUL!!!
Paul Principato
principo@earthlink.net
April 1, 2009 at 1:07 pm |
[...] Jon Kyl (R-AZ), who had earlier introduced his own patent reform bill, expressed a dissenting view on the situation. He expressed support for the proposed changes to [...]