Patent Reform Act of 2009

Patent reform legislation has now been introduced in both the House and the Senate. The provisions call for major reforms and mirror much of the proposed legislation from 2008. If anything, this is not a consensus Bill. File Attachment: SenateBill.pdf (116 KB) File Attachment: HouseBill.pdf (180 KB)

Proposed changes in the Senate Bill include:

  • First to File: Moving to a first-to-file system that credits invention based on the filing date of the patent application rather than on the date of actual invention.   The provision eliminates the one-year grace period for most cases. Thus, any independent third-party publication prior to filing is considered prior art regardless of the date of invention. Likewise, secret prior art (102(e)) cannot be ‘sworn behind’ based on prior invention. This provision obviously hurts folks who delay in filing patent applications.
  • Damages: Must look to the invention’s “specific contribution over the prior art” to determine damages. There is an interesting provision that a reasonable royalty may be calculated as the price of licensing a “similar noninfringing substitute in the relative market.” In some cases, this could push damages to zero if the noninfringing substitute is in the public domain. The provision also codifies that treble damages are limited to instances where a judge finds that an adjudged infringer recklessly continued to infringe after receiving particularly specified written notice sufficient to create declaratory judgment jurisdiction and without relying on reasonable advice of counsel.
  • Expanded Reexamination Proceedings: Reexaminations may be requested based on published prior art, or evidence of prior public use or sale in the US. Inter partes reexaminations would begin to look more like court cases and would be heard by administrative patent judges. The Bill would clarify that parties would be estopped from filing inter partes reexamination requests after a district court judgment.
  • Additional Post Grant Review: Within 12 months of issuance, a third party can file a cancellation petition based on any ground of invalidity (rather than simply prior art). The post grant reviews would also be conducted by the administrative patent judges.
  • Pre-Issuance Submissions: Third parties can submit prior art during examination of the patent as well as a statement regarding the relevance of the art. The art should be submitted the latter of (1) six months after publication or (2) before the first office action on the merits.
  • Patent Litigation Venue: “A party shall not manufacture venue by assignment, incorporation, or otherwise to invoke the venue of a specific district court.” Venue is only proper were (a) defendant is incorporated; (b) defendant has its principle place of business; (c) where the defendant is permanently located and has committed substantial acts of infringement; or (d) where the plaintiff resides if the plaintiff is a nonprofit or individual inventor. The court should transfer venue to avoid evidentiary burdens when transfer can be accomplished without causing undue hardship to the plaintiff.”
  • Interlocutory Appeals: The Federal Circuit will have jurisdiction over interlocutory appeals of claim construction when approved by the lower court.
  • Administrative Patent Judges: The BPAI would become the Patent Trial and Appeal Board (PTAB). Interferences would be gone, however they would be replaced by derivation proceedings as well as reexamination and post-grant trials.
  • PTO Powers: The PTO has power to set its fees, including reducing fees.
  • Oath: Easing the rules to more easily allow rights-holders to file patent applications on behalf of the inventor.
  • Federal Circuit Judges: Making legal it for a Federal Circuit judge to reside more than 50 miles from DC.

As you can see, this is very much the type of reform that companies like Google would like to see. Google is regularly faced with charges of patent infringement and rarely sues for infringement. Some of these changes will benefit the system as a whole, but it is clear that this is not “balanced” reform. The damages provision will almost certainly reduce patent awards. And, perhaps equally important, the damages provision provides adjudged infringers a real cause to appeal jury awards if they did not directly follow the expert testimony.

I believe that the expanded use of reexaminations and post grant review and prior art submissions will be beneficial, and I have faith that the administrative patent judges will be able to handle their newfound responsibilities. That said, these provisions provide challengers with new ways to attack patent rights.

The plaintiff bar in the Eastern District of Texas is quite good, and defendants are doing what they can to escape from their grasp. The venue provision moves in that direction and would thus weaken the value of patents.

The trick with the first to file system is to realize that it is not about some mythical race to invent between competitors. Rather, it is about keying the priority on the date of filing the application rather than the date of invention or even one year prior to filing. This provision weakens patent rights because more materials will be considered prior art. It is possible to switch to a first-to-file system without eliminating the grace period so dramatically – this legislation does not, however meet that standard.

The Bill is sponsored by both Senators Leahy (D-VT) and Hatch (R-UT). Representative Conyers (D-Mich) introduced parallel legislation in the House, the legislation is largely similar, but does contain some differences. (I have not reviewed the House version in detail). Some opposition has already formed. Reps Manzullo (R-IL) an Michaud (D-ME) issued a joint press release titled “New patent bill encourages IP theft, destroys American jobs.” Their focus was on the damages provision.

There are some changes from the 2008 legislation.

  • The Bill does not require that all applications be published at 18 months.
  • Applicants would not be required to search prior art.
  • The 2009 Bill allows public use or sale in the US to be reasons for challenging patents.
  • CHECK 21 provisions are gone.
  • Fee Diversion is allowed in the 2009 Bill. (Oddly, Leahy explained that PTO Examiners perfer a system of fee diversion)
  • The 2009 Bill does not address inequitable conduct.

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82 thoughts on “Patent Reform Act of 2009

  1. CHINA 2009 PATENT REVISION CLOUDS US AND MOST COUNTRIES PRIOR ART PRACTICES.

    The revision to be effective Oct.1 2009 clouds current practice as stated by a US Patent Attorney that “It has long been the patent law of most countries that “priot art” comprises, in part, “…” 20 year old patents involving inventions that have never been prototyped or sold etc…”
    Article 22 Chap 11 of the China patent revision states that:: Inventiveness” means that, as compared with the technology existing before the date of filing the invention has prominent substantive features and represents a notable progress and that the utility model has substantive features and represents progress.
    Practical Applicability” means that the invention or utility model can be made or used and can produce effective results.
    It stand to reasons that conversely,retired 20 year old inventions that have never been prototyped or sold ..etc, cannot show practical applicability and inventiveness. That the inventions cannot show results and represent substantive progress. Its prior art is suspect , inhibits new inventions, economic advancement and represent major cost in the patent process. US congress is enjoined to consider the China Revision together with the insight in publication entitled “ An aid to legislation for the US Patent Reform Act of 2009“ at 333chamfil.newsvine.com.

  2. I am a computer programmer. But I do not have the kind of money a large corporation would have to file for a patent. I would rely on the ability to market the product as “Patent Pending” and then file for the patent when I can afford to. I normally just include my source code on a disk, then mail the disk to myself sealed. So that if and when a dispute arises I can hand the judge a time sealed envelope proving that I invented it and when.

    What this law basically means is that if I create an innovative design, and it turns out to be a major success, my competitor may copy my idea and then file for a patent on my idea and the sue *ME*. And even if I can prove without a shadow of a doubt that I was the first to come up with the idea and apply the idea *I* would be the one paying damages.

    The proposed system literally means if someone even sees my idea he can patent it before I can without even being a programmer and then sue me for the final product. Rewarding dishonesty and punishing hard work.

    This can only benefits the wealthy and hurts everyone else. In in no way would reduce lawsuits files and may actually make the problem worse since lawyers would be in a rush to file ASAP. When people are in a rush they loose sleep, drive dangerously, take risks, and sometimes forget to include important information. It might even cause new lawsuits of people suing their old lawyers for not getting the job done in time.

    I see no reason why the rights of the INVENTOR should be violated in this way.

  3. Max,

    I 100% agree with you with respect to FTF. Small inventors and small companies have been hoodwinked and have no idea what things are like in large corporations.

  4. “It’s the litigators and prosecutors who are against it. They have a vested interest to protect, and some naive people get fooled by their blandishments.”

    DING DING DING DING!!!!!

    We have a winnah!

  5. Here we go again. People full of prejudice but empty of knowledge of how FtF works in practice once again busy rubbishing it. In Europe, the patent system rewards those who are quickest to file an enabling disclosure of the solution to a technical problem. Depending on the technical field, one page might be enough. Do it yourself jobs can suffice. There’s no point in including all the boilerplate with which US patent attorneys fleece gullible lay clients. But make sure your filing is delayed long enough until it’s enabling. Those who jump the gun, with less than a worked solution, get the worst of all worlds, namely, an app that’s invalid but when published gives the game away. Big corp’s lumbering procedures have the consequence that it files slower than SME, almost invariably. You still don’t get it, do you? FtF shifts the balance in favour of those who are quick on their feet ie small inventors and little companies. It’s the litigators and prosecutors who are against it. They have a vested interest to protect, and some naive people get fooled by their blandishments.

  6. “Those who felt they’d be under pressure to file quickly make a marginal argument. It is a pressure filled career. What about those crappy US Provisionals (USP)that need to be re-drafted and filed before the end of the year; and the client comes to you a week ahead of time? I don’t see much difference between that and the F2F pressure.”

    The argument is NOT marginal. You cite crappy provisionals and applications filed with one week’s notice as examples of time pressure. Yes, those exist and make up perhaps 10% of the applications filed, so that time pressure is there for 10%. First to file will make that 100%. Also, the crappy provisionals usually arise because somebody sought a very early filing date a year ago, likely for F2f reasons. So your post admits that F2F leads to crap.

  7. Why would the patent community as a whole allow fee diversion? Why do we not have a host of attorneys from all walks of life upset at congress taking funds from inventors and entities to fund what they like? This procedure is a disgrace. It is no wonder the patent office is so far behind in every way, when hundreds of millions of dollars has been taken with no intent to repay

  8. First to file should allow no prefiling disclosurs since inventorship accuracy depends on absolute novelty and the secrecy of the uspto files during the critical 60 day period after filing. Other evidencing methods should include multiple invention involvements and previous invention clusters.

  9. First to invent is actually an attempt to find the first to file.It assumes no evesdroping has occured therefore it needs other factors to ensure accuracy such as provisional filing that allows additions to the original conception to demonstrate intellectual dominance by additions to the original conception to show a complete fileable nonprovisional patent by one year

  10. The first thing to realize about first to file is that it is designed to find the first to invent.It is one of many evidencing methods that should be used to correctly determine the actual inventor as opposed to a large pack of liars.

  11. Robert,
    My point about the foreign priority claims was simply in answer to a concern that FtF will lower the quality of patent specs.
    There are hypothetical situations with both systems which cause grief. Does your small engineering firm keep the necessary records, for instance? I guess my response is that my practice is in a FtF system, and almost exclusively comprises small engineering firms. I have never encountered, either personally or anecdotaly, a situation such as you suggest.

  12. Thanks bsn, Former American, and Lionel Hutz for responding to my question seriously.

    Lionel says: “How? How do you see that happening and how is that good for innovation?”

    Your point is a good one, but only as much as it sees innovation merely as disclosure. Innovation is much more than publication–it is the fostering of a healthy ecosystem for innovation, an ecosystem that allows companies of all sizes to compete in the same markets, an ecosystem that grows innovative companies and creates jobs, good high-paying jobs for innovative people, precisely the kind of jobs that will keep America innovative into the 22nd century.

    Consider a scenario in which a small engineering firm competes in the same market as a large conglomerate. The engineering firm has a limited budget and so prefers to finance its corps of engineers over its legal department. (I hope that even amongst lawyers and agents we can agree that this value system inherently favors innovation, as it creates jobs for innovators.) Now, this small engineering firm puts out a regular stream of patentable innovations, many in the same general area as its competitor, and its legal team works diligently to get them all filed. Sometimes, however, it might take a full year for the understaffed legal team to have cleared up the docket backlog, write a good spec, get the drawings drafted, all in consultation with the inventors. And inventors being busy inventing, they don’t always get back to the legal team within a day when the legal team asks them to proof a draft of the spec. Sometimes it takes a week or two. I don’t think this kind of delay takes the process outside the realm of diligence. It takes time to put together a patent.

    Continuing in our narrative, the small engineering firm files, and (some years later, of course) the examiner hits them with prior art from one of those big conglomerates I mentioned, filed just a few months before the small engineering firm’s filing date. To keep things simple, let’s say the prior art isn’t claiming the same invention, so this wouldn’t be going into interference in any case.

    In the present system, the small engineering firm has recourse and may still acquire their patent to compete in the marketplace. In the new system, big corporate, capable of paying large fees to outside counsel or of maintaining a large internal legal department to do filings, wins virtually every time, because they can afford to finance the more timely disclosure and all that goes into it. There is no more recourse.

    Most of the jobs in America come from small businesses. It’s crucial for innovation as a whole that we maintain an ecosystem in which small innovative companies can be permitted to coexist with large corporations, so that we can employ many more innovators, people who will raise their children to be innovators as well.

    Former American’s point that the race is 2-part is valid but irrelevant. As a society we need to establish a system that favors the marathon rather than the sprint. To do otherwise is shortsighted.

    bsn mentions a 2-stage Australian system. I’m not sure how this fundamentally differs from our provisionals. An examiner with art published in the time intervening between provisional filing and nonprovisional filing would still hit an applicant with a new matter allegation, and rightly so. Only in a first-to-file system, again, we have removed the recourse.

    The fact that some large percentage of patents claim foreign priority shouldn’t enter into the equation. Of course many patents claim foreign priority. The U.S. is the best technology market in the world and every inventor across the globe wants to seek patent protection here. Americans shouldn’t be setting up their patent system with regard to what foreign filers are doing. We should be protecting American innovation.

    To Gomer and other inevitablists, we’ve had several chances to pass FtF in the last few Congresses and it hasn’t passed yet.

  13. Jules is giving is the sort of disconnected rant we’d expect from a Rush Limbaugh fan.

    FtF is coming, so get used to it.

  14. First-to-file is such garbage. America should maintain its first-to-invent system so that actual inventors are encourage to innovate, and so corporations don’t run the entire game. Any big corporation with a few dollars can file an application immediately after it is drafted, which may not be true for the little guys. If you change to first-to-file, America will be just like every other socialist loser out there. No offense =).

  15. Robert, you don’t desreve platitudes, and Mooney can be patronizing, but bsn and Lionel Hutz make good points. Further, the race is a 2-part race. One can’t file a proper applic w/o 1st innovating. It’s not innovate OR file, rather innovate AND THEN file. I appreciate your egalitarianism, but what about the inventor who didn’t use the proper notebook ? Is he/she to lose out to one who did, even if the 1st to invent was the one with the poor documentation ? F2F simply makes sense in an imperfect world. The patent system is so imperfect, appeal rates are skyrocketing.
    Further, how long can someone “sit on their a$$” (copyright to Lionel) before disclosing in an application ? From reading US P-law, I perhaps recall that there is an easily measured period (sarcasm intended)like “reasonable”. Bring that to court.

  16. Lionel, we seem to agree.
    The Australian solution to some of the problems suggested is to loosen the enablement requirements of the provisional application. One can claim a priority date with a relatively brief disclosure, and then has twelve months to write the full specification. It’s almost a case of the prov being ‘this is what I’ve done’, with the full spec being the how and why. I’m slightly overstating this, but I hope you get the general idea.
    Also, I see no reason to dump the grace period. It works fine in Australia under a first-to-file system.

  17. Robert,

    “First-to-file changes the game to “let he who writes his patent application first and wins a race unrelated to innovation be touted as an inventor”.”

    How? How do you see that happening and how is that good for innovation?

    The person who files first is the inventor of what he filed and therefore innovated. If someone else invented it earlier and sat on his a$$, then why should we reward him with a patent.

  18. Dave and me,

    In a first-to-file system, the application still has to be filed by or on behalf of the inventor. That does not change. It just allows second inventors to obtain applications without being challenged in an interference.

    Whoever told you first-to-file is unConstitutional is full of crap.

    102(f) or something similar will be there to stop copyists.

  19. The constitutional argument seems like garbage to me. Can two people independently invent the same thing? Sure. Should they both get a patent? No. Who gets the patent? A good public policy question, but not a constitutional one.
    As was pointed out last go-around of this conversation, about 50% of US patents claim a foreign priority. This means they are currently based on a first-to-file system. I’ve seen no evidence to suggest their quality is significantly less than US originating patents.
    RKS, you’re overlooking the fundamental quid pro quo of the system. Patent rights aren’t in return for invention in the abstract, they’re in return for invention and disclosure. Let’s reward the inventor who discloses (files) first.
    On a practical level, it removes all the rather esoteric arguments about reduction to practice, and replaces them with a nice, definite test.

  20. “You know, if you cant see any ‘reasonable justification’ for implementing a first to file rule, you’re not even trying.”

    I sincerely ask to be persuaded, and I get rhetorical platitudes? *Somebody’s* not trying.

    Where I went to school, we had the motto “palmam qui meruit ferat”, loosely translated, “let he who invests the research dollars, and works diligently to perfect his technology, and works diligently to write a good patent application that meets the burdens of disclosure, be the one who may profit from his invention”. First-to-file changes the game to “let he who writes his patent application first and wins a race unrelated to innovation be touted as an inventor”. The present system favors the inventor, whereas the proposed system favors the corporate entity with an army of patent practitioners, draftsmen, etc.

    We need to award patents to the inventors who are winning the right race; first-to-file takes us further, not closer, to that ideal.

    Your turn…

  21. “I still haven’t seen it explained how first-to-file doesn’t unreasonably shift favor from true original inventors to those with resources to put together their applications faster, or, if it does, what the reasonable justification for this shift could be.”

    You know, if you cant see any “reasonable justification” for implementing a first to file rule, you’re not even trying.

  22. “I’m fascinated to know how you can identify non-Americans by punctuation style. Is it the Oxford comma that gives it away, or what?”

    In French, you put a space between the end of your sentence and your question mark.

    I noticed after I posted that the poster used the name “Former American”, but I would bet money the poster spent his childhood in Europe.

  23. “I’m guessing by your punctuation style that you’re not an American, anyway.”

    I’m fascinated to know how you can identify non-Americans by punctuation style. Is it the Oxford comma that gives it away, or what?

  24. “Why can’t an inventor simply file an applicaiton as soon as he/she can write down what the invention is ?”

    Writing something down on paper is cheap. Filing a patent application is expensive, and not just in terms of filing fees, but in terms of fulfilling all the legal requirements, which requires the expertise of a patent professional, putting together drawings that at least disclose everything that will be required in the final application…

    I still haven’t seen it explained how first-to-file doesn’t unreasonably shift favor from true original inventors to those with resources to put together their applications faster, or, if it does, what the reasonable justification for this shift could be.

    Current statutory bar rules are restrictive enough. First-to-invent is the best thing about the American patent system, and it amazes me that there is disagreement on this issue, or that so many are in favor of a first-to-file system. Have all of you gone through interferences or something?

    I’m guessing by your punctuation style that you’re not an American, anyway.

  25. My entry for dumbest idea of the year:
    instituting ex parte reexaminations on public use or on-sale prior art.

  26. “Why can’t an inventor simply file an applicaiton as soon as he/she can write down what the invention is ? Not too much to ask IMHO.”

    No shxt. The Constitutional argument is really too shallow to waste additional time on.

  27. Inventor (dictionary definition): one who devises some new process, appliance, machine, or article. Even tho this definition supports “6” (“first” is implied), it is clear that proof is required (like publication is required for art to be cite-able prior art). Perhaps I thought of an invention a year ago but never wrote it down. Can I prevent someone else’s patent application for that invention ? Clearly not. Why can’t an inventor simply file an applicaiton as soon as he/she can write down what the invention is ? Not too much to ask IMHO.

  28. “I’ll take a stab”

    Please don’t.

    There’s enough “strict construction” and “original intent” blathering on the internet without you adding to it.

  29. I hate to do it, but I gotta’ agree with Moonbeams here. The Constitution has nothing to do with FTF or FTI. Dave, if you were taught in law school that FTF is unconstitutional, you need to go get your money back.

    First of all, “first-to-file” means the first INVENTOR to file. All of the FTF draft bills I have seen say that the patent rights don’t extend to someone who misappropriates the invention from an inventor.

    Second, there is no legal theory I know of that “inventor” applies only to a first inventor. Ten people who independently invent the same thing over a period of years are all inventors under the Constitution and if 9 of them sit around with their thumbs stuck unproductively in a posterior orifice, then that other one who files should have the rights to market.

    But as I have argued above and otherwise, no one who invents prior to another’s filing should be cut off from using his invention [as opposed to licensing it] by FTF. Prior use rights should be a defense to infringement in a FTF system, so long as the prior use can be proven and has not expanded after the filing date.

  30. “The constitution does not state “First Inventors” … only “Inventors.”

    If the Framers wanted to limit it solely to “First Inventors” the Framers could have said so. Because they didn’t. So there is no requirement for “First Inventors” to have the right. ”

    Yes, but what was the understanding of what the word “inventor” used to mean (and likely should still mean?). I’ll take a stab: The first person to make something novel (and perhaps you might tack obviousness/flash of genius on here).

    Oh look, define: inventor.

    someone who is the first to think of or make something.

    First is in the definition of the word, you don’t have to say first in front of inventor to mean the first person to think of or make something.

  31. The 1st to file is working ok for those of us in the non-US part of the world. Thank you Babel boy, Tazistan Jen and M. Mooney for realizing F2F is reasonable.
    Seems that this aspect of the reform may simplify the P-Law a lot. Those who felt they’d be under pressure to file quickly make a marginal argument. It is a pressure filled career. What about those crappy US Provisionals (USP)that need to be re-drafted and filed before the end of the year; and the client comes to you a week ahead of time? I don’t see much difference between that and the F2F pressure.
    Re USPs (someone asked what would happen to them), I don’t see why there’d be any issue keeping them in light of the reform. A USP would simply be that 1st filed application. Is that too easy?
    I was born in the USA (like Springsteen) … maybe after the reform I’ll take the US Patent exam.
    Re post grant action: A good idea; but I like the commenter who recommended better examination. I like the pre-Appeal possibility (haven’t used it yet tho). Too much incentive for Examiners to do crappy work & then just say that Applicant arguments weren’t convincing and voila…Final. I’d rathe pay more fees up front and have an honest examination. Plus, with the lack or reading by the Examiners, there should be 3 (or more) iterations before needing an RCE (or appeal), not just 2.

  32. “The consitution gives the patent right to inventors, not filers.”

    False. The Constitution doesn’t give patent rights to anybody. Please take your kindergarten level understanding of the law to http://www.RedState.com or some other place where diapered adults cry about change.

  33. The consitution gives the patent right to inventors, not filers. First-to-file is clearly unconstitutional, and both the strict constructionists as well as the legislative intent folks will end in the same place…

  34. BigGuy: ” suppose that we could argue that the Constitution was only referring to “American” inventors…”

    The Framers had no difficult making such distinctions elsewhere in the Constitution.

    /scalia off

  35. “Attorneys who love the present system for one reason or another (read: $$$$$) are always making the same dumbaxx argument that you were taught in your law school.”

    Indeed. While ignoring the fact that 102(g) expressly allows a second inventor to receive a patent, under some circumstances, and that 102(a) also implicitly allows a second inventor to receive a patent, if the first invention was only known in a foreign country. But I suppose that we could argue that the Constitution was only referring to “American” inventors…

  36. “it is simply accepted that first-to-file is a perfectly legal alternative”

    No, it’s not. Attorneys who love the present system for one reason or another (read: $$$$$) are always making the same dumbaxx argument that you were taught in your law school.

  37. “I keep asking this question. When I was learning law and patent law, I was told that ‘first to file’ was unconstitutional because the Constitution states: “To promote the Progress of … useful Arts, by securing for limited Times to … **Inventors** the exclusive Right to their … Discoveries””

    I don’t recall that the Supreme Court has ever addressed the issue. However, the argument for the interpretation you recited has always struck me as incredibly stoopit. The Constitution mandates interference proceedings? No, I don’t think so, friends.

    The Constitution merely gives Congress the right to set up a system to provide inventors with a means to secure rights to their inventions. A first to file system does that perfectly well. There is no requirement in the Constitution that ONLY inventors can own rights to their inventions. The absurd reading proposed in your law school could be used to argue that assignments are prohibited by the Constitution. That is equally stoopit.

  38. there’s nothing wrong with what the tech companies are doing. Applicants are filing for data structures and RDB schemas straight out of Strousup and Sahni and other programming textbooks that were published over 20 years ago.”

    WHAT DO YOU NEED RESPONDS: And your point is? If this is true, then these applications will never mature into patents.”

    You, sir, are a liar. Have you no decency?

  39. Dave:

    The constitution does not state “First Inventors” … only “Inventors.”

    If the Framers wanted to limit it solely to “First Inventors” the Framers could have said so. Because they didn’t. So there is no requirement for “First Inventors” to have the right.

  40. Talk about pro-defendant: the proposed venue reform forces patentees onto alleged infringers’ home turf (albeit in a different judicial district).

    Think it’s fair to force a patentee to go into Michigan to win a verdict against Ford? Off-the-cuff alternative: “venue is also proper in any adjacent state.” So, you could sue Ford in Minnesota, Google in Nevada, etc.

  41. I keep asking this question. When I was learning law and patent law, I was told that ‘first to file’ was unconstitutional because the Constitution states: “To promote the Progress of … useful Arts, by securing for limited Times to … **Inventors** the exclusive Right to their … Discoveries”

    Going to first-to-file, I was told, would allow a non-inventor (not first to invent) to obtain a patent, which is unconstitutional.

    I never see this issue addressed in any full manner anywhere. It seems to be forgotten, altogether. And it is simply accepted that first-to-file is a perfectly legal alternative. Has anyone researched this and generated a reasoned article?

    Dave

  42. Under “Damages”:
    “There is an interesting provision that a reasonable royalty may be calculated as the price of licensing a ‘similar noninfringing substitute in the relative market.’ In some cases, this could push damages to zero if the noninfringing substitute is in the public domain.”

    So we just ignore the fact that the infringer actually used the patented invention rather than the ostensible noninfringing substitute. In other words, replace the facts with legal conjecture. Think about this–if the noninfringing substitute were “just as good” as the infringed invention, why didn’t the infringer actually use the noninfringing “substitute”?

    “The provision also codifies that treble damages are limited to instances where a judge finds that an adjudged infringer recklessly continued to infringe after receiving particularly specified written notice sufficient to create declaratory judgment jurisdiction and without relying on reasonable advice of counsel.”

    Apparently the Seventh Amendment is just a “piece of g-dd–m paper!!” Notice the removal of punitive damages in the patent context from jury consideration.

    This proposal smells like protection of very large, wealthy, entrenched special interests. Is anyone surprised?

  43. Won’t First to File impact –patent quality–? If I have to file the application before the inventor is done explaining it to me so that I wont be later sued for taking too long to prepare the application, what are the chances that I will produce a “quality application”?

  44. What do you need patent reform for then?,

    Thanks for your rebuttal to Microsoft Bob. Couldn’t have said it better (or more succincly) myself. The fact remains, this new version of the so-called “patent law reform” still greatly favors the corporate Goliaths, not the Davids of innovation.

  45. I’m not liking the idea of eliminating the grace period. I could live with first to file.

    I actually rather like the expanded pre- and post-issuance procedures. It seems to everyone’s benefit to prevent or clear out invalid patents. But I wish something could be done to get better examinations in the first place.

  46. We will have to watch what amendments are proposed. While we are discussing changes to practice before the Patent Office, here are a few of my thoughts.

    1. I would like to see inequitable conduct claims reined in — not just harder to prove but also harder to raise. There is a ton of prior art out there and no easy way to find the most relevant art. Because of the presumption of validity I want to bring the most relevant art to the Patent Office’s attention but I don’t always have the time or the budget or the means to find it.

    2. I would also like to see the Patent Office produce something for each application that we can call a search report to help with foreign prosecution. It could be attached to the first Office Action — just make the 892 form look more like a PCT search report form.

    3. The use of provisional applications can ameliorate some concerns over first-to-file. I can prepare and file a rough provisional fairly easily and then take some time to craft better claims to file with a more complete application. That’s not perfect, but generally my practice won’t change one bit with a switch to a first-to-file system. Assuming that the one-year grace periods in 102 remain.

  47. As noted above, a pure “first to file” race winable by any “paper patent” without even adequate DEFENSIVE protection for prior actual commercial product inventor/developers and users is unfair and illogical. It was never even intended by the “first to file” legislation proponents. This change was part of some ill-advised sua sponte Congressional amendments of the patent reform legislation in the last term.
    ——————
    Re the report that “Leahy explained that PTO Examiners prefer a system of fee diversion”:
    One has to wonder who could possibly believe that more than a lunatic-fringe of examiners would actually want the only source of their paychecks to be partially diverted to be spent on something completely different? [A de facto "tax on innovation" which would require higher fees and thus discourage the patent applications that are their only livelihood.]

  48. they’re expanding post-exam procedures and pre-exam procedures instead of revising the examiner production requirements. treating the symptoms not the cause. at least they’re trying.

  49. This is a great package.

    Pegging damages to the margin of innovation over existing art is brilliant. You could virtually eliminate the whole of 103 obviousness and all the wasted time and money it generates. So long as the invention is novel — great, issue the patent and let the courts award the $7.50 in infringement damages because that is all the improvement is worth.

    First to file is long, long, long overdue. I haven’t read the bills, but what appears to be missing is concurrent expansion of prior use rules.

    Filing first should never be able to cut off the first inventor’s right to practice the invention. However, if you invent and don’t file, you should lose the right to license the invention. This just makes good legal sense within the context of property law.

  50. “there’s nothing wrong with what the tech companies are doing. Applicants are filing for data structures and RDB schemas straight out of Strousup and Sahni and other programming textbooks that were published over 20 years ago.”

    And your point is? If this is true, then these applications will never mature into patents. Also, even if patents were issued on these concepts, it wouldn’t take much for somebody more knowledgable about the art than the examiner to put these into reexamination.

  51. If there’s expanded post-grant review then how many people are going to use reexam unless it’s after the 12 month post-issuance period?

  52. @iwasthere: you misinterpreted my statement. For the longest while, the CCPA/CAFC were so ridiculously pro-patent that 102 became the sole standard for patentability — 101 and 103 were completely irrelevant. SCOTUS is much more moderate and less ridiculous.

    @EG: there’s nothing wrong with what the tech companies are doing. Applicants are filing for data structures and RDB schemas straight out of Strousup and Sahni and other programming textbooks that were published over 20 years ago. And this isn’t even “duty-to-search” material. This is “applicant knew or should have known this was in the prior art because they teach it in high school programming classes.” With the way re-exams are handled, if your patent isn’t garbage, then you have nothing to worry about.

  53. “Go back and tell Barnes and Noble that one-click is now invalid, and every one of those “correct” judges have now been overturned.”

    It is? That’s news to me. Last time I checked reexam control number 90/007,946 the case was still pending, and in fact it appears that the examiner and the applicant agreed that an amendment to the claims to add “a shopping cart model” would define over the prior art.

    Do you know something we don’t?

  54. If they are going to go to first to file, then at the very least they should go to the European system in which “secret” prior art, i.e., 102(e) art, is only available for novelty rejections and not obviousness rejections.

  55. “Some opposition has already formed. Reps Manzullo (R-IL) and Michaud (D-ME) issued a joint press release titled ‘New patent bill encourages IP theft, destroys American jobs.'”

    Reps Manzullo and Michaud are my new heroes. That at least some Democrats, along with Republicans, see the potential problems with this new version of so-called “patent law reform” as potentially costing American jobs and undercutting American global competitiveness is fair warning that this bill benefits the corporate Goliaths, not the innovative Davids. The corporate Goliaths certainly aren’t going to create the jobs needed to bring American out of the current recession, but are (at least those in the banking and financial services world that created this mess) instead simply “sucking” money out of the so-called “stimulus” packages passed by the same Congressional characters who are supporting this new version of so-called “patent law reform.”

    Again, look at who is supporting this bill, the Coalition for Patent Fairness, a truly oxymoronic title for an organization that could care less if America’s patent system goes down the toilet. CFPR, which whines continually about how the current American patent system is stacked against it, isn’t going to create American jobs, but will simply increase the dominant position of the large computer/IT companies (who will continually cut American jobs). Also, could it be that these Congressional characters supporting this new version of so-called “patent law reform” pocketed funds from the Coalition for Patent Fairness? Again, this new version of so-called “patent law reform” will simply stamp out the Davids of Innovation, and with it the hope for job creation and global competitiveness in America. Anyone who believes otherwise is living in a dream world.

  56. “… Leahy explained that PTO Examiners perfer a system of fee diversion.”

    I must be working in some other US Patent Office than the one Mr. Leahy is talking about. WTF, Leahy, seriously, WTF!? If Congress wants to fleece the PTO’s fees just be upfront about it rather than try to play it off as the ones being fleeced wanting it. What next, rape victims want to be raped?

  57. the re-exam and damages portions are troubling, but don’t make me want to run crying that the sky is falling.

    I could live with this, as described.

  58. I don’t get it – Conyers’ home district is the heart of autoworker land. This is google legislation, not Ford GM and Chrysler legislation. What’s going on here? Maybe it’s time to put together a concerted anti-Conyers bill effort in SE Michigan.

  59. Ridiculously pro patent scotus? Even the witting press can’t be sell that b.s. Thanks for contributing to the misinformation pile.

  60. As far as I’m concerned, first to file is just cutting down on inequitable conduct that we all know goes on but is virtually impossible to prove.

    Venue is just clarifying what’s going on already — there’s no reason why an MNC selling 4 units of a commodity item in the eastern district (of TX or VA) should be a better forum, especially when the defendant is a CA corp, and the plaintiff is a newly formed holding company. Hell, a newly formed plaintiff in TX, DE, or VA has even less ties to that venue than the MNC selling 4 units. The plaintiff bar is just pissed because they’re losing their investments in firms built up in places like Marshall. And with the CAFC turning to no longer be so pro-patent, either Ward’s title of “least reversals of any district judge on patent cases” will disappear, or he’ll stop his obnoxiously pro-patent rulings.

    And the 50 mile rule is because they want to be able to bring DE judges down to sit on panels. I don’t have a problem with that, as long as they don’t step out of line for the less ridiculously pro-patent Supreme Court.

    Go back and tell Barnes and Noble that one-click is now invalid, and every one of those “correct” judges have now been overturned. Innovation is not furthered when the patent system becomes a race of gathering judgments and settlements before the patent is invalidated. Hopefully patent reform can help get rid of junk patents.

  61. There is always time pressure. However, now there is an added layer of rush – i.e. beating the other guy to the PTO.

    Regarding ” As far as liability, outside counsel retention letters . . . . For example, the firm will have one/two/three months in which to file an application assuming cooperation from the client and inventors, etc.”

    Obviously Mr. Hutz doesn’t seriously think that one can set a date based on the level of cooperation of a client. This is the equivalent of Project Management. Should all attorneys now run out and get their PMP certification? Besides, when it comes to client management and efficiency, remember… “the client is always ‘right.'”

  62. L-Hutz wrote:
    ” As far as liability, outside counsel retention letters . . . . For example, the firm will have one/two/three months in which to file an application assuming cooperation from the client and inventors, etc.”

    I love this. What is it with most practitioners?

    Why do they believe that there is not equivalent time pressure now?

    Hmm?

    Is it because sitting on your hands while the 102a ref becomes a 102b ref is not as obvious or proximate of a cause of the death of an application as is a publication 2 days before your filing date?

    How about that 103e ref?

    Bottom line is, the time pressure to get an application filed SHOULD NOT CHANGE AT ALL.

    All that will change is the obviousness of the fault of the practitioner for not getting the case written and filed before the publication, which used to be a 102a, but now, for all intents and purposes, will be a 102b.

  63. Cuh-ching.
    Cuh-ching.
    Cuh-ching.
    Cuh-ching.
    Cuh-ching.
    Cuh-ching.
    Cuh-ching.
    Cuh-ching.

    That’s right folks: Gideon Pope gets even richer.

  64. First-to-file will be so much better than our current system when it is finally enacted. As far as liability, outside counsel retention letters or agreements are just going to have to explicitly provide a time period in which the client agrees they will have met their duty. For example, the firm will have one/two/three months in which to file an application assuming cooperation from the client and inventors, etc. The time period can be set to be inversely proportional to the client’s charge to encourage a reasonable time for completion.

  65. The vexation, patent infringement and political mischief rewards act of 2009. Goal, create specific financial and property rights based incentives to drive patent owners from the marketplace and/or financial ruin. Inject executive branch politics into the system to get favorable results in star chamber like reexaminations. Raise FUD and costs to system so patent owners cannot possibly capitalize and bring products to market before market incumbent can saturate market with infringing product.

  66. So…let’s get this straight. We attorneys now have to work faster to get those patent applications done as soon as the disclosure comes through the door, risk malpractice or losing the client for ‘sitting on a patent’ even if we’re slammed….and fly all around the country to enforce our client’s rights for little or no money…. hmmm… I’m so glad I keep up to date on my trademark practice.

  67. Why did Leahy say that Examiners prefer fee diversion? There must be some twist that I’m missing.

  68. The courts and this proposed act are doing so much to weaken the value of patents under THE GUISE of fixing flaws in the system.

    Its become pretty clear… KSR, Bilski, and now this that an idea will not be allowed its just protection. Big corporations already have defacto monopolies over technology simply because they are big corps.

    Hurray for corp America trying to “fix” the system. Why don’t we just take out the concept of “small entity” in the MPEP… That seems to be where policy is headed in order to “fix” the system.

  69. As one who routinely decides which inventions should be filed, I could live with these provisions of the bill except for “first to file” and the damages section. I agree damages may need to be adjusted for software and other related instances, but the “first to file” is folly. This also piles on the chances of more liability for oustide counsel.

  70. “Must look to the invention’s “specific contribution over the prior art” to determine damages. There is an interesting provision that a reasonable royalty may be calculated as the price of licensing a “similar noninfringing substitute in the relative market.””

    I think this intended to address a logical problem with the last round of proposed amendments. The last version I looked at said that damages would relate to the improvement over the prior art.

    Suppose there was prior art but it would cost you $1.00 per unit to license and a new invention allowed you to avoid the prior art but did not improve on the prior art then the old wording might have had the result that the inventor of the new solution would not be able to claim damages. This new proposal addresses that logical problem.

  71. “The provision also codifies that treble damages are limited to instances where a judge finds that an adjudged infringer recklessly continued to infringe after receiving particularly specified written notice sufficient to create declaratory judgment jurisdiction and without relying on reasonable advise of counsel.”

    Awesome, more money for lawyers!

    er, I mean, this is a very important provision that should do a great deal to prevent large corporations from trampling on the rights of small patent-holding citizens.

  72. the PTO cannot even efficiently and quickly handle their current responsibilities, and Congress wants to give them more

  73. Almost forgot: no authority for the USPTO to enact “substantive rules.” Hopefully, that “hot potato” stays completely out.

  74. Interesting that applicant quality submissions (AQSs) and codifying inequitable conduct (IC) aren’t part of initial Senate bill. (The former good, the latter not so good.) But you might see something slipped in on these during the amendment process, so watch out.

  75. “PTO Powers: The PTO has power to set its fees, including reducing fees.”

    Will the PTO have the power to set the examiner’s wages and production quotas? (I assume they already do.) If so, they could overhaul the wages and production quotas and then charge applicants much more based these changes.

  76. “Damages: Must look to the invention’s ‘specific contribution over the prior art’ to determine damages. There is an interesting provision that a reasonable royalty may be calculated as the price of licensing a ‘similar noninfringing substitute in the relative market.’”

    This might be the silliest patent reform proposal yet.

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