Patent Reform

As we speak, the IPO is holding its annual meeting in Chicago.  From the meeting:

  • PTO Director Jon Dudas announced that he has not yet decided whether to implement changes to limit continuation practice.
  • The IPO has created some information on patent reform.  First, a one-page sheet outlining the various draft bills. Second, a five-page comparison chart. And third, a red-line version of S.3818 that was introduced by Senators Hatch and Leahy. Word on the street — nothing is expected to pass in 2006. . .

14 thoughts on “Patent Reform

  1. As I see it, faced with a large number of patent applications (attracted by the ease of obtaining a patent due to a less than vigilant examination in many cases) and too few Examiners, the Patent Office decided to adopt rules to cut down on the number of applications and the number of claims while leaving the examination quality relatively untouched. In other words, there are other solutions, such as increasing the number of Examiners, changing the guidelines for examination of patents and the like that have been overlooked.

    My view is that the Patent Office has adopted a policy of limiting examination as much as possible. It no longer addresses substantive inventorship issues and has aggressively curtailed the scope and possibility of interferences. All of these policies shift the task of examination to the courts at a significantly higher cost to the public.

    Limiting continuation applications, if it works, may possibly discourage filing of patent applications further by ultimately limiting the scope of the inventions and encouraging design around. It is also likely to increase the cost of prosecuting and preparing patent applications.

    Indeed, it is likely that it may favor the well-heeled, and thus decrease the number of applications eligible for small entity status. Under the proposed rules, it is advisable to file several different applications that differ sufficiently from each other to properly claim a invention in a commercially sensible manner. This multiplication in applications is advisable due to the limits on claims and continuations based on a single disclosure.

    As a result, we should expect to see over time an increase in the fraction of small disclosure containing applications by large corporations, a decrease in the number of applications by small firms and individual applicants, and little change in the quality of the granted patents.

    The biggest impact is likely to be in bio-technology related patents, but significant impact should be expected in software and other arts as well.

  2. I have been following these comments that submited to PTO regarding the implementation of changes to limit continuation practice. Many comments argued that PTO doesn’t have the authority to make these changes. Can PTO be sued if they insist on implementing these changes?

  3. An appeal after the Markman hearing is an interesting twist to the Hatch bill and would certainly add dollars to patent lawyers coffers. Unfortunately I am not so sure it will lead to more clarity in the law as I am not covinced the Fed Cir gets it right a significantly higher percentage of the time than the District Court (see Gillette), and I am not sure many District Courts can come to the correct conclusion in a case even if they had the right claim construction. In addition an appeal at this early stage means that claim contruction will occur in the vaccuum where there is no knowledge of the infringing product – I think that is a good thing but the Fed Cir seems uncomfortable with this (see several notes in this blog).

  4. I am really interested to hear more comments on the proposed interlocutory appeal provisions in the Hatch Bill (S. 3818, Section 8). Near as I can tell, the concept doesn’t seem to have been discussed in detail in the law review. As I think everybody knows, the provision would require that the appeal be filed w/in 10 days of the Markman Order and the district court proceedings would be stayed pending the appeal. Unlike many of the other provisions common to the various patent reform bills (oppositions, first-to-file, willfulness reform, etc.), this provision is one that is unique to the Hatch bill.

    With a > 40% reversal rate at the CAFC on claim construction, it seems that interlocutory appeal could bring more efficiency to litigants and the district courts. This may be especially true as very often the Markman determination is effectively dispositive of a patent suit. It could have the potential of reducing nuisance type suits where plaintiffs file in “renegade” type forums, hoping to force settlement prior to appeal due to the economics of litigation.

    On the other hand, as pointed out in some of the above comments, it could lead to the loser always appealing Markman, which might reduce/delay settlements. Also, there would be the delay of the district court case in being stayed pending appeal. There is also the issue of how the CAFC will be able to handle these additional cases.

    I’m also curious about people’s thoughts on how the interlocutory appeal concept relates to Rep. Issa’s bill for a pilot program special opt-in patent judges. That bill was voted out of committee yesterday and seems to have legs. It seems like this pilot program and and a right to interlocuatory appeal complement one another.

  5. I heard that Robert Clarke of the USPTO spoke at a breakout session. He indicated that the USPTO did not expect to experience any “bubble” of continuation filings pre-effective date if the continuation rules where implemented, because the rules would somehow be retroactive. Has anyone heard any clear explanation of this retroactive provision and the USPTO’s anti-bubble plan?

  6. “I like the idea of interlocutory appeals of claim construction in theory (why wait for years to get a bad claim contruction fixed), but in practice won’t the loser in a claim contruction always take an interlocutory appeal, thus stopping the district court case in its tracks and tripling (or more) the burden on the Fed.”

    There are district judges that are on the speaking circuit that advocate automatic CAFC review of Markman rulings before trial. I agree with this position (especially since the CAFC overrules over 50% of trial court Markman rulings). Some District Court judges are now requiring that the Markman brief be accompanied by a Motion for Summary Judgment so the ruling is set up for an interlocutory appeal. Unfortunately, my local district is not one of them.

    According to the judges taking this position, why go through the entire trial, only to have to do it all over again after the CAFC changes the meaning of the claim?

    Maybe this increases the work for the CAFC, but didn’t they bring it on themselves by taking the position that they know better than district judges and should review all Markman decisions de novo? Shouldn’t the CAFC bear the burden, rather than doubling the trial court’s docket?

    Post-Markman ruling time was one of the best times to settle a case. But after the CAFC started reversing so many Markman decisions, my advise is not to rely on the trial court’s Markman decision as anything more than an advisory opinion. Settlement should only be seriously considered after the CAFC rules on the Markman decision.

  7. “That’s why the requirements to practice patent prosecution before the PTO are so rigorous and daunting …”

    Just because the patent office has screwed up and set the bar too low, that does not mean the judge in Topliff was not 100% correct!

    I think Patent Agents should not exist, but maybe that is just me…

  8. “It was Topliff v Topliff where Justice Brown said that a patent was one of the most difficult legal instruments to draft.”

    That’s why the requirements to practice patent prosecution before the PTO are so rigorous and daunting …

  9. It was Topliff v Topliff where Justice Brown said that a patent was one of the most difficult legal instruments to draft.

  10. These rules are really all very scary and many will not pass muster in the courts. It is too bad the patent office, and Dudas, have not listened to the people who practice before them. These rules will result in a HUGE number of filings in the 30 day they give, and greatly increase pendancy. They will also result in ANY more Appeals as prosecutors will have to appeal every claim and fight for every inch if they only have one RCE. These rules will be a huge debalce if implemented, and will result in a huge headache for the Patent Office. The good thing is that they will quickly get Doll and Dudas fired!

  11. Other than the comment by Dudas that he has yet to decide on the limits on continuations, did Dudas or anyone else from the PTO provide any other information on timing and content of the other aspects of the various proposed rule change packages (i.e., designated claims and IDS rules)?

  12. With the current publication of applications filed with no request for non-publication, and the publication of continuation applications claming priority to a patent application where a request for non-publication was made, there is no need to limit the number of continuation applications. Although I do not have the case name (and if anybody knows, please comment) I believe the Supreme Court has stated that a patent application is one of the most difficult legal documents to draft. Inventors should be allowed to have a parent application issue with narrow claims to deal with immediate knock-offs and still be allowed to argue for broader claims in a continuation application. The public has full on-line access to the prosecution history of the continuation and can act accordingly.

  13. Congressional efforts to address the crisis of confidence in the U.S. patent system are unlikely to progress until the patent reform bill narrows in scope.

    If Congress is to have any hope of passing legislative reform to the Patent Act, the supporters of patent reform will have to unite behind a streamlined set of proposals that directly address the most pressing and unambiguous defects of the current patent system.

    As stated in my recent Differential Impact paper, Congress should prioritize those reforms which will discourage the acquisition and assertion of bad patents without unduly prejudicing the interests of the holders of good patents.

    See, Patent Reform and Differential Impact
    (link to papers.ssrn.com)

    Matthew Sag
    Assistant Professor
    De Paul University College of Law

  14. I like the idea of interlocutory appeals of claim construction in theory (why wait for years to get a bad claim contruction fixed), but in practice won’t the loser in a claim contruction always take an interlocutory appeal, thus stopping the district court case in its tracks and tripling (or more) the burden on the Fed. Cir.? Now the Federal Circuit just gets the cases that didn’t settle — under this rule, there would be little incentive to settle after a bad Markman (given the relatively low cost of an appeal).

Comments are closed.