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CLIENT ALERT — Patent Reform Act of 2009 Introduced in Congress

Background

The last major reform of the U.S. patent laws occurred in 1952. In recent years, Congress has considered, but failed to pass, several attempts at patent reform legislation. In 2008, the House approved a version of patent reform legislation, but the Senate failed to gain a consensus on various aspects of its bill.

Recently, nearly-identical major patent law reform bills were introduced in Congress (S. 515, introduced by Sens. Leahy [D-Vt.] and Hatch [R-Utah], and H.R. 1260, introduced by Reps. Conyers [D-Mich.] and Smith [R-Texas].) The bills are similar to the reform bills considered in the last Congress.  

Key Topics

Key topics in the bills include:

• Patent Damages. When awarding a “reasonable royalty,” the provision requires a court to conduct a detailed analysis to ensure the award reflects the economic value of the patent’s “specific contribution over the prior art.” (NB – The damages provisions were among the most hotly contested portions of last year’s bills and the subject of extensive public comment.)

• First-Inventor-to-File. Converts the U.S. patent system from one in which the “first inventor” under the law is entitled to a patent to one in which the first applicant to file gets the patent provided the first filer was an actual inventor (not an invention thief.) If there are competing applicants, there will no longer be interference proceedings to determine who invented first, but a “derivation proceeding” can be conducted to determine if the first filer is not the true inventor. If enacted, this provision puts a premium on prompt filing.

• Willful Infringement. Codifies the Federal Circuit’s Seagate decision (reported in our client alert via this link) by requiring a plaintiff seeking multiple damages to demonstrate with clear and convincing evidence that the infringer acted in a manner that was objectively reckless.

• Post Grant Review. Expands the reexamination system, and creates a new administrative post-grant review for challenges to patents within 12 months of issuance or reissue. 

• Pre-issuance Submissions. Permits third parties to submit timely pre-issuance information (i.e., prior art patents or publications, evidence of a prior offer for sale, etc.) relevant to the examination of the application, including a concise statement of the relevance of the submission.

• Venue for Patent Suits. Limits venue for bringing civil actions for patent infringement, including declaratory judgment actions.

• Interlocutory Appeals to Federal Circuit. Requires the Federal Circuit to accept all interlocutory appeals of claim construction orders when certified by the district court. Prior proposals for an “early” appellate review of a trial court’s claim construction (”Markman ruling”) have been criticized by the Chief Judge of the Federal Circuit for having the potential to overwhelm the appellate court and to further delay reaching a final resolution.

• Inventor’s Oath or Declaration. Eases the rules allowing patent owners to file patent applications on behalf of the inventor.

• Authority for USPTO to Set Fees by Regulation. Gives the Director rulemaking authority to set or adjust fees, provided that such fee amounts are set to reasonably compensate the PTO for the services performed.

What’s Not in Current Bill

Provisions omitted from last year’s bills include, among others:

• Second Window Post Grant Review. Previous bills included a hotly contested second window review provision allowing post grant challenges at any time, although subject to strict requirements. As noted above, the Post Grant Review provision of the current bills is now limited to challenges within 12 months of patent issuance or reissuance.

• Applicant Quality Submissions. The bills do not require applicants to submit their own search data, rather than have PTO examiners perform the search.

• 18-Month Publication of All Applications. The bills do not contain the previously proposed 18-month publication requirement for all applications, which would have removed the publication exception for applications not intended to be filed abroad.

• Inequitable Conduct. The bills do not include provisions on the law of inequitable conduct. However, the sponsors of the bills have indicated they intend to develop acceptable language on inequitable conduct (i.e., clarifying and limiting same) during the legislative process.

For Further Information

To read the Senate version of the bill, please go here

To read the House version of the bill, go here