Patent Reform 2011

Here we go again. Sen. Patrick Leahy (D-VT), chairman of the Judiciary Committee, has announced that he plans to introduce his latest bill on patent reform next week. The bill is also being pushed by Republican members of the Committee Sens. Orrin Hatch (UT) and Charles Grassley (IA).

On his website, Sen. Leahy notes that the bill “mirrors key improvements” to the legislation announced last March as the “Manager’s Amendment.” He indicates that it is also based on legislation introduced by House Judiciary Committee Chairman Lamar Smith (R-TX) and Congressman Howard Berman (D-CA) that passed the House in 2009, but never made it to the Senate floor.

Sen. Leahy plans to introduce the bill on Tuesday, the Committee’s first day of executive business, and has scheduled a mark-up session already for Thursday, January 27. It appears that he will try to fast track the bill again without permitting hearings or debate.

What’s in the Bill?

Although we’ve seen most of this before, it’s a good idea to review the major changes contained in the bill.

1.     The bill proposes the switch from a first-to-invent system to a “first-inventor-to-file” system. They continue to try to draw the distinction between this and the first-to-file system that exists in most other countries.

Under current law, for prior art that is publicly available less than one year before an application for a patent, an inventor can prove that he invented the claimed invention prior to the date of the prior art. In that case, he can still get a patent for his invention. The bill proposes to change the one year grace period that currently exists to limit it to only disclosures by the inventor or someone who obtained the disclosure from the inventor.

A “first-to-invent” system sometimes requires a determination of who actually was the first to invent if two applications or an application and a patent both claim the same invention. Currently, these proceedings are referred to as “interferences.” The new bill would replace interferences with new “derivation” proceedings to determine if the inventor of an earlier-filed patent “derived” the invention from the inventor of a later-filed application.

2.     False marking cases would be limited to those filed by persons who have actually been harmed by the alleged misconduct. False marking cases would also include a statute of limitations that limits the time to file such cases to 10 years after the alleged misconduct or 1 year after the plaintiff in such an action became aware of the alleged misconduct.

3.     The bill contains a provision that permits patent applications to be filed by assignees without the requirement of a declaration by the inventor, provided the inventor is given notice.

4.     It also contains the damages compromise to require district court judges to act as gate-keepers for evidence and jury instructions on the issue.

5.     The bill includes the changes to make pleading and proving willful infringement more difficult, including requirements of pre-suit notification and specificity in pleadings.

6.     The bill includes the post-grant review proceeding that may be filed with the PTO within 9 months of a patent’s issuance, and an inter partes proceeding before the PTO after this time-frame. The bill includes yet another standard for the PTO to decide whether to institute such a proceeding. The petitioner must provide a “reasonable likelihood” (or more likely than not) that it will prevail in invalidating at least one claim of the patent. An accused infringer may not petition for post-grant review if it has already filed an action in court regarding the patent’s validity or more than 3 months after it is required to respond to an infringement suit filed against it. This should cut down on the number of co-pending Federal court and PTO proceedings. The bill also contains estoppel provisions for arguments raised or that reasonably could have been raised in the PTO proceeding. The arguments may not be raised in a later PTO proceeding or in a court action.

7.     The bill permits third parties to submit prior art patents or publications, as well as PTO or court statements by the patent applicant to the patent examiner during pendency of a patent application. Such statements may be made confidentially.

8.     The bill includes provisions for Supplemental Examination. A patent owner may provide potentially material prior art to the PTO. If the PTO determines the information provided has no effect on patentability, no charge of inequitable conduct can be brought based on the information submitted. The information must be brought to the PTO and the reexamination must be completed prior to litigation.

The bill does not grant the PTO substantive rule-making authority, but does provide the PTO with fee-setting authority and retains provisions for reduced fees for small and micro-entities. The bill would also add a new fee of $400 for applications that are not filed electronically.

The bill repeals the Baldwin rule that requires Federal Circuit judges to live within 50 miles of Washington, DC; it deems patent applications on “tax strategies” to be within the prior art; and it retains the best mode requirement, but does not permit a patent to be invalidated for failure to comply with this requirement.

The text of the bill is available here. Patent Docs provides a good summary of the bill.

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3 Responses to “Patent Reform 2011”

  1. Tweets that mention Patent Reform 2011 « INVENTIVE STEP -- Says:

    […] This post was mentioned on Twitter by IP ENCYCLOmation, Matt Osenga. Matt Osenga said: Patent Reform 2011: […]

  2. General Global Week in Review 31 January 2011 from IP Think Tank Says:

    […] on patent reform introduced Jan 25, 2011 (IPBiz) (Inventive Step) (Patents Post Grant Blog) (PharmaPatents) (Maryland Intellectual Property Law Blog) (Patently […]

  3. Judiciary Committee to Consider Patent Reform Bill « INVENTIVE STEP Says:

    […] Osenga The Senate Judiciary Committee has scheduled a mark-up session for this morning on S. 23, the Patent Reform Act of 2011, introduced by Sen. Leahy (D-VT) last week.  The Committee Chairman would like to fast-track the […]

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