Patent Reform in the House of Representatives

Patent, Patent Legislation

Tech Law Reporter Andrew Noyes has indicated that 2009 will likely see a repeat of the same patent reform measures of 2008. [LINK]. I thought it would be important to look at a few faces that might ordinarily be behind the scenes in the legislation process.

Dr. Christal Sheppard will be the House staffer leading the charge on Patent Reform from within the House Judiciary Committee. Sheppard is a patent attorney and has been working on the Hill since 2003. Her official title is Chief Counsel for the Subcommittee on Courts and Competition Policy (there is no IP subcommittee). Sheppard holds a PhD with a focus on molecular biology from the University of Michigan and has remained active in the patent bar. Other patent attorneys in the House include Garg Sampak (committee on rules) and Jonathan Pawlow (assistant to Rep. Adam Smith (D-Wa)). Susan Davies – who was the staffer in charge of patent reform at the Senate under Senator Leahy has moved to the White House. Davies is a resume superstar — a University of Chicago Law School graduate who clerked for both Justices Kennedy and Breyer. Aaron Cooper (formerly of the Covington firm) has apparently replaced Davies in the Senate.

The Judiciary Committee is headed by Representative Conyers of Michigan. Members include Berman (D-Cal), Boucher (D-Va), Smith (R-Tex), and Issa (R-Cal).

Patent Reform in the House of Representatives

Patent Legislation

Tech Law Reporter Andrew Noyes has indicated that 2009 will likely see a repeat of the same patent reform measures of 2008. [LINK]. I thought it would be important to look at a few faces that might ordinarily be behind the scenes in the legislation process.

Dr. Christal Sheppard will be the House staffer leading the charge on Patent Reform from within the House Judiciary Committee. Sheppard is a patent attorney and has been working on the Hill since 2003. Her official title is Chief Counsel for the Subcommittee on Courts and Competition Policy (there is no IP subcommittee). Sheppard holds a PhD with a focus on molecular biology from the University of Michigan and has remained active in the patent bar. Other patent attorneys in the House include Garg Sampak (committee on rules) and Jonathan Pawlow (assistant to Rep. Adam Smith (D-Wa)). Susan Davies – who was the staffer in charge of patent reform at the Senate under Senator Leahy has moved to the White House. Davies is a resume superstar — a University of Chicago Law School graduate who clerked for both Justices Kennedy and Breyer. Aaron Cooper (formerly of the Covington firm) has apparently replaced Davies in the Senate.

The Judiciary Committee is headed by Representative Conyers of Michigan. Members include Berman (D-Cal), Boucher (D-Va), Smith (R-Tex), and Issa (R-Cal).

Patently-O Bits and Bytes No. 90

Bits and Bytes, Patent, Patent Legislation,
  • Patent Reform I: In a recent article, DC insider Hal Wegner noted that there is “reason for optimism that patents will not be put on the back burner by the new President.” Wegner pointed to the President’s pro-reform start and to the President’s Technology Agendy that calls for: (1) ensuring that American IP is protected abroad and (2) reforming the patent and copyright systems “while ensuring that intellectual property owners are fairly treated.” The agenda speaks specifically to patent reform: “Reform the Patent System: Ensure that our patent laws protect legitimate rights while not stifling innovation and collaboration. Give the Patent and Trademark Office (PTO) the resources to improve patent quality and open up the patent process to citizen review to help foster an environment that encourages innovation. Reduce uncertainty and wasteful litigation that is currently a significant drag on innovation.” [Read the Technology Agenda]
  • Patent Reform II: Although Wegner noted “optimism,” many patent industry insiders may be pessimistic that there is a high likelihood of patent reform. In particular, the technology agenda statements, coupled with Professors Sprigman and Rai as advisors, further coupled with the rumored appointment of John Thompson as Secretary of Commerce point toward legislative patent reforms being along the same lines as eBay (weakening injunctions), KSR (making it easier to find patents obvious); VW (weakening plaintiff’s choice of forum); Bilski (limiting patentable subject matter); and Seagate (limiting damage awards).
  • Patent Reform III: On the other hand, Professors Rai and Sunstein are both major administrative reformers. There is hope that their style of internal PTO reforms – made through rule changes and standard operating procedures – could dramatically change the PTO for the better.
  • Role of the Secretary of Commerce: 35 USC 1(a) establishes the Patent Office (PTO) within the Department of Commerce. However, the statute is clear that the PTO has some power independent of the larger department: “The [PTO] is established as an agency of the United States, within the Department of Commerce. In carrying out its functions, the [PTO] shall be subject to the policy direction of the Secretary of Commerce, but otherwise shall retain responsibility for decisions regarding the management and administration of its operations and shall exercise independent control of its budget allocations and expenditures, personnel decisions and processes, procurements, and other administrative and management functions in accordance with this title and applicable provisions of law.”

John McCain’s Prize System: $300 Million for Battery Power

Bits and Bytes, Patent, Patent Legislation

For a long time, monetary prizes have been offered as an alternative to patent rights as a mechanism for driving innovation. In 1714, for instance, the British Parliament offered £20,000 for a solution to the “longitude problem” – to determine the current longitude of a ship at sea. John Harrison solved that problem by creating an accurate mechanical clock set to GMT. Longitude was calculated as the difference between the ship’s local time (as measured by the sun) and GMT. [LINK]

Republican nominee John McCain recently proposed the American version: $300,000,000 “for the development of a battery package that has the size, capacity, cost and power to leap frog the commercially available plug-in hybrids or electric cars” – but that cost 30% less. The prize would be open to any company worldwide – so long as they planned to sell in the US. Although unclear, I suspect that the winner would also be able to protect its innovation through patents. In Harrison’s case, he was required to “surrender the innovation for public use.”

Unlike obtaining a patent, prize systems typically require that the technology be proven through actual monitored testing. That means the winner is more likely to bring the product to market. When thinking about this type of system, I like to compare prizes to patents and also to direct government funding (subsidy/grants). Table 1 below tells most of the story.

  

Patent

Grants

Prize

Success Required for Payout

Yes

No

Yes

Government Chooses Technology

No

Yes

Yes

Government Outlay of Funds

No

Yes

Yes

Provides Seed Money for Venture

No

Yes

No

Payout is driven by Market

Yes

No

No

Table 1

 

Notes:

  • Now Pending S.2210 is the “Medical Innovation Prize Act of 2007.” The act would attempt to “de-couple” the reward for pharmaceutical product research from the market price of the product. Unlike more traditional prizes, this one would not pre-select the goal. [LINK] In the mid 1990’s Economist Michael Kremer proposed that the government should buy-up important pharmaceutical patents and then dedicate them to the public.
  • Attorney/Entrepreneur Michael Martin adds his thoughts: Why the Venetians didn’t invent a Prize system for Inventions

Tax Patent Legislation: Excusing Infringement of Patented Tax Planning Methods

Method Claims, Patent, Patent Legislation

Rep. Rick Boucher’s Bill to excuse infringement of patents covering tax planning methods now has 40 co-sponsors. However, its prospects for becoming law are still slim – only one of the co-sponsors is a member of the House IP Subcommittee which must approve the bill.

The proposal copies the language of the “medical practitioner’s performance of a medical activity” exclusion found under 35 USC 287(c). (Known as the Ganske compromise).  Under the proposed bill, unauthorized use of a patented tax planning method by a taxpayer or tax practitioner would not be considered infringement.

“With respect to the use by a taxpayer or a tax practitioner of a tax planning method 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 taxpayer, the tax practitioner, or any related professional organization with respect to such tax planning method.”

A tax planning method is defined as any “plan, strategy, technique, or structure that is designed to reduce, minimize, or defer, or has, when implemented, the effect of reducing, minimizing or deferring, a taxpayer’s tax liability.” The proposal is careful to exclude “tax preparation software or other tools used solely to perform or model mathematical calculations or prepare tax or information returns.”  This language is potentially too loose — as most tax software does much more than perform math and prepare the return.

H. R. 2365

Patently-O Bits and Bytes No. 9

Patent, Patent Legislation,
  • Bush Administration Opposes Aspects of Patent Reform: [LINK] (But will support an amended version)
  • Additional Senate Comments on Patent Reform: [LINK (836 KB)]
  • Senator Kyl: Congress should eliminate business method patents because they create monopoly costs without any new beneficial technology.
  • Senators Spector & Brownback: The S.1145 “remains a work in progress;” the damage apportionment language would create uncertainity and litigation — especially determining an invention’s “specific contribution over the prior art.”
  • Senators Feingold and Coburn — If the bill is passed without serious amendment “Patents will be devalued and many inventors will opt for trade secrecy instead, undermining the Framers’ intent to promote disclosure and public benefit through a strong patent system.”
  • General Remarks from a minority of Judiciary Committee members: “Primum non nocere is Latin phrase that means `First, do no harm.’ … In our opinion, the intervention the bill proposes will create real and certain damage to our patent system and the ability of America’s inventors and innovation industries to protect their intellectual property rights.”
  • The link above includes the formal Judiciary Committee report on the proposed patent reform legislation now pending in the Senate.
  • Spare Parts: Spare parts manufacturers continue to lobby congress to include a special provision in the reform bill that would eliminate the potential of protecting automobile spare parts with design patents.  Several car companies are currently attempting to limit the off-brand repair market. http://www.qualitypartscoalition.com/
  • KSR Rejections: PTO provides examples of how to use KSR to reject Business Method claims. [LINK] [via PatentHawk]
  • See the Forest: A new IP analytics site titled “See the Forest” is lets you create some interesting patent maps: http://see-the-forest.com.  The company behind the site is IPVision.

    •  

    Patent Refom: Unsettling Rights

    Patent, Patent Legislation,

    Patent.Law056By Dennis Crouch

    There have been numerous reports calling the US Patent System broken or at least in need of severe repair. From my view, the greatest problems with US patent law arise because of its common lack of clearly drawn property lines.  In academic lingo, we call this a failure of the public notice function.  

    Examples of the fuzzy lines of patent law are well known to Patently-O readers and include the secret rights of unpublished patent applications; shifting rights that may be altered via extended prosecution, future continuing applications, and second look examination; and uncertain rights potentially crumbling under the vagaries of claim construction and obviousness jurisprudence.

    These problems are exacerbated in certain technology areas – such as electronics – by massively overlapping claims and speculators asserting patents in a seemingly more aggressive fashion.  At the same time, there is a strong consensus that these issues do not arise in the same fashion in the pharmaceutical and bio-technological areas. Pharmaceutical patent law is often heralded as an incredible success — especially in the post Hatch-Waxman days of strong generic competition.

    Now comes the Patent Reform Act of 2007. Unfortunately, the proposed patent reforms now being debated by the Senate do virtually noting to address these serious problems and instead potentially cause harm to the current regime.

    CAFC Chief Judge Michel has publicly discussed patent reform and its potential impact on the judicial process. Apart from the Chief’s particular quarrels with damage apportionment and expanded interlocutory appeals, he makes a particular point about the destabilizing effect of major Congressional patent reforms.  In the decades following reforms, each amended word will be litigated and eventually construed. Unfortunately, during the wait for new statutory interpretations, patent holders and accused infringers will be left guessing.  Judge Michel’s ultimate point is that changes in the property regime should only be made when we have a genuine reason to believe that the changes will improve the system as a whole.  For the majority of the proposed patent reforms, that case simply has not yet been made.

     

    Patently-O Bits and Bytes No. 6.

    Patent, Patent Legislation
    • Patent Reform in February: Hal Wegner notes “widespread predictions” that Senator Leahy now has enough votes to push the Patent Reform Act through the Senate.
    • Patent Reform Writeup: Professor Jay Thomas (Georgetown) is also tasked as the IP guy for the Congressional Research Service (CRS). In that capacity, Thomas has taken to explaining some of the pros and cons of the Patent Reform Acts of 2007. (HR 1908; S 1145).  [CRS REPORT ON PATENT REFORM] According to Thomas: “The provisions of the proposed legislation would arguably work the most sweeping reforms to the U.S. patent system since the nineteenth century.”  Thomas does an excellent job of quickly discussing each proposed reform measure in language as neutral as he can muster.
    • PCT Seminar: April 25–26 Pierce Law will host its 10th annual Comprehensive PCT Seminar in Concord, NH. Cost is under $400 ($100 for students). Two of the leading PCT Experts Carol Bidwell and David Reed will lead the seminar. [LINK]
    • Position: Director of the Office of Technology Management and Industry Relations at the University of Missouri. (Join me in Columbia). “The University of Missouri, Columbia (MU) is seeking an innovative, energetic, and experienced individual to serve as Director of the Office of Technology Management and Industry Relations.” [LINK]

    Patent Reform and the Ethos of the American Inventor

    Inventors, Patent, Patent Legislation

    PatentLawPic138Although I understand the reality that most patent prosecution is handled on behalf of corporate assignees, I still hold a special place in my heart for the maverick American inventor.  Some might understand the slight pangs I felt when reading the inventorship section of the Senate report on patent reform.  The report suggests eliminating from the law “the antiquated notion that it is the inventor who files the application, not the company-assignee.” Perhaps it is time my thoughts of the American inventor to go the way of the Wild West and horse drawn carriages.

    The Bill (S.1145) is intended to fix an understandable problem — that of inventors who fail to fulfill their contractual obligation to assign patent rights to the Corporate owner.  This is a serious problem as shown by the current issue of IPToday which includes a full-length article describing the complex set of hoops currently required to overcome these so called “problem inventors.” [LINK]

    Beyond the sound-bites, the specific reform provisions are not so bad. The revised statute would allow an “obligated assignee” to file the patent application on its own behalf. An inventor’s oath is still required unless the “obligated inventor” is either unable or unwilling to sign. Under the provision, a patent cannot be challenged as invalid or unenforceable based on a corporations mistaken claim that the inventor had an obligation to assign.  The savings clause appears to also include protection against mistakes in correctly naming inventors in the application.

    Patent Reform 2007: House of Representatives Passes H.1908

    Patent, Patent Legislation, , , ,

    Legislative patent reform still has a long road to travel before reaching its conclusion. However, the passage of H.1908 by the House of Representatives represents a major leap forward along the path. The following are some highlights of the statute as passed. [H.1908.As.Passed].

    First to file system: Obviousness and novelty would now be considered as of the “effective filing date.”  Novelty grace period would be eliminated except for the inventor’s own disclosures. Although unclear, the grace period appears to be completely eliminated for obviousness analysis. Interferences are gone.

    Damages: Reasonable royalty calculations (the most common damage awards) would all require courts to conduct a thorough analysis to ensure that damages are equal to the “economic value [of the invention] properly attributable to the patent’s specific contribution over the prior art.” The entire value of a product or process can only be the basis for royalty calculations if the innovation is the “predominant basis” for market demand of the product. (a showing that may be impossible in most cases). Overall this would reduce damage awards.

    Search Reports: PTO would be granted discretion in ordering search reports for all applications except those by a new group called ‘micro-entities.’

    Treble Damages: The statute explicitly calls-out ‘willfulness’ as the sole reason for enhanced damages then severely limits the facts where willfulness can be found. Overall this reduces the likelihood of awarding treble damages.

    Post-Grant Review: In addition to reexamination, a post-grant review proceeding would be available if filed within 12–months of issuance or with the patentee’s permission.

    Open Examination: Anyone may submit prior art for any patent or pending application along with an explanation of why the art is important.

    Tax Methods: A patent would not be available for a newly invented tax planning method. Tax planning methods do “not include the use of tax preparation software or other tools used solely to perform or model mathematical calculations or prepare tax or information returns.”

    Venue and Jurisdiction: Strong limitations on venue would likely eliminate E.D.Texas as a potential choice.

    Interlocutory Appeal: A district court would be given discretion to certify interlocutory appeals of claim construction decisions.

    Inequitable Conduct: Inequitable conduct must be pled with specificity following FRCP Rule 9b. Inequitable conduct rules would be made explicit in the statute. Overall, this weakens the defense of inequitable conduct.

    PTO Regulatory Power: The statute would give the PTO power to make the continuation rule changes that it has already implemented.

    Patent Trial and Appeal Board: Following John Duffy’s Suggestion, the statute would have the board appointed by the Secretary of Commerce rather than the PTO Director.

    Study of Patent Damages: The PTO will study how damage awards have changed based on the changes in the law.

    Patent Reform: Required Pre-Filing Search and Patentability Analysis

    Patent, Patent Legislation

    The PTO’s accelerated examination program (formerly petition to make special) requires that the applicant conduct a prior art search and provide an extensive discussion of how the submitted prior art relates to each claim. As mentioned in earlier Patently-O posts, I expected that the program somewhat of a prototype — if all goes well, the PTO may require a preliminary search and discussion of prior art findings for all cases.

    The future is here: The recently amended Senate Bill includes orders for the PTO Director to require search reports and patentability analyses for all filed applications (except for those filed by “micro-entities”).  Failure to submit a report would result in abandonment.  A new 35 U.S.C. Section 123 would read as follows:

    “The Director shall, by regulation, require that applicants submit a search report and other information and analysis relevant to patentability.  An application shall be regarded as abandoned if the applicant fails to submit the required search report, information, and analysis in the manner and within the time period prescribed by the Director.  Applicants from micro-entities, as defined in section 124 of this title, shall not be subject to the requirements of any regulations promulgated pursuant to this section.”

    In the past, IPO President Marc Adler has suggested on his blog that patentees should conduct pre-filing searches. [LINK]. Of course. Mr. Adler’s comments suggest only a voluntary system.

    Notes:

    Patent Reform 2007: Apportionment of Damages

    Patent, Patent Legislation,

    Patent are business tools that can help ensure some monetary reward for innovative effort.  Although few patent are litigated through final decision, the threat of litigation casts an ever-present shadow on licensing negotiations and inter-corporate dealings.  Of course, any underlying threat is closely related to the size of potential damages and strength of a potential injunction.  In the past two-years, damages in particular have become more important as the Supreme Court’s decision in EBay v. MercExchange lessens the likelihood of injunctive relief.

    There has been little scholarly discussion of how ongoing money damages should be assessed when an injunction is denied.  I take the position that a denial of an injunction should not necessarily result in a compulsory license and that there are many times when continued infringement would be considered willful.

    The Patent Reform Acts of 2007 (both House and Senate) propose changes to damage calculations that would require specific economic analysis to ensure that any reasonable royalty damage award captures "only [the] economic value properly attributable to the patent’s specific contribution over the prior art."  These calculations would apparently apply to calculations of both past and future damages. CAFC Chief Judge Michel recently testified before Congress — discussing some practical implementation of the damage modifications:

    [T]he provision on apportioning damages would require courts to adjudicate the economic value of the entire prior art, the asserted patent claims, and also all other features of the accused product or process whether or not patented. This is a massive undertaking for which courts are ill-equipped. For one thing, generalist judges tack experience and expertise in making such extensive, complex economic valuations, as do lay jurors. For another, courts would be inundated with massive amounts of data, requiring extra weeks of trial in nearly every case. Resolving the meaning of this novel language could take years, as could the mandating of proper methods. The provision also invites an unseemly battle of "hired-gun" experts opining on the basis of indigestible quantities of economic data. Such an exercise might be successfully executed by an economic institution with massive resources and unlimited time, but hardly seems within the capability of already overburdened district courts. Appellate issue would also proliferate increasing complexity and delays on appeal, not to mention the risk of unsound decisions.

    I am unaware of any convincing demonstration of the need for either provision, but even if the Committee ultimately concludes that they would represent an improvement over current patent policies embedded in Title 35 of the United States Code, their practicality seems to me very dubious. That is, the costs in delay and added attorneys fees for the parties and overburden for the courts would seem to outweigh any potential gains. Finally, even if the policy gains were viewed as significant, the courts as presently constituted simply cannot implement the provisions in a careful and timely manner, in my judgment.

    (more…)

    Continuation and Claim Limitation Rules Submitted for Final Review: Final Publication in Early July

    Patent, Patent Legislation

    Hal Wegner has done the legwork to evidence the rumors.  On April 10, 2007, the USPTO Submitted two sets of final rules to the Office of Management & Budget for regulatory review:

    • RIN: 0651-AB93: Changes to Practice for Continuing Applications, Requests for Continued Examination Practice, and Applications Containing Patentably Indistinct Claims
    • RIN: 0651-AB94: Changes to Practice for the Examination of Claims in Patent Applications

    Summer Implementation Likely: According to self-reports, Bush OMB has maintained a fairly strict adherence to a 90-day time-limit for review. Thus, barring unusual circumstances, publication of the rules can be expected in early July. Implementation would require a 30-day window following publication.

    Get Involved: The Review Office has a policy "to meet with any party interested in discussing issues, whether they are from State or local governments, small business or other business or industry interests, or from the environmental, health or safety communities." In addition, third parties may submit written comments on any rule under review. [VIA FAX at (202) 395-3047 or 202-395-5806 or (202) 395-6566]. 

    Earlier this month, Susan Dudley was named the new director of the Office of Information and Regulatory Affairs (OIRA) through a recess appointment. Her office is quite powerful because it "will have an opportunity to change or block all regulations proposed by government agencies."

    IPO Supports Attorney Fee-Shifting, Opposes PTO Authority

    Attorney Fees, Claim Construction, Fee Shifting, Patent, Patent Legislation,

    The Intellectual Property Owner’s Association (IPO) has taken a new stand on patent reform through its passage of three specific resolutions in reaction to the pending Senate bill S.3818 that had been supported by Senators Hatch and Leahy. Resolutions:

    (1) supporting a requirement that a court award attorney fees to the winning party in most patent cases; [fees “shall” be awarded unless the losing position was “substantially justified”or if the award would be unjust because of special circumstances].

    (2) opposing any change to give substantive rule-making authority to the USPTO; and

    (3) opposing any right for an interlocutory appeal from claim construction decisions in patent litigation. 

    (more…)

    Encouraging Consumer Suits

    Patent, Patent Legislation

    MeijerGrocer Meijer has reportedly filed an antitrust suit against drug maker Eisai for monopolization of the U.S. market for its billion-dollar GERD treatment Aciphex.  (S.D.N.Y.). Meijer charges that the patent was obtained fraudulently and that it is either invalid or unenforceable.  Meijer runs pharmacies in its stores, and the patent threat keeps generics out and prices high.

    Although there is some precedent for these consumer-led cases, they tend to be few and far-between.  In the wake of several innovator-generic reverse-payment settlements, there appears to be some political will to find another market lever that encourages challenges to potentially unenforceable patents.  One suggestion is to boost-up the antitrust damages that could be collected by companies in Meijer’s situation.  Another suggestion is to facilitate cooperation and cost-sharing between the potential plaintiffs (e.g., pharmacies).

    Patent Reform

    Patent, Patent Legislation

    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. . .

    Patent Reform Bills: Do Not Forget the Details

    Patent, Patent Legislation, , , ,

    < ?xml:namespace prefix ="" o />ED: The following note was submitted for anonymous publication by a practicing patent attorney:

    For all the public debate over controversial broad objectives in the various pending patent reform bills, there has been remarkably little published academic or other attention to whether or not the extensive new specific draft language in these bills will accomplish those objectives without drafting errors creating unintended ambiguities in judicial interpretations.  This note will particularly question, an example that seems to be in common to the pending bills, the draft language for the crucial definition of the “effective date” of an application or patent. 

    The seriousness of current patent reform legislative efforts has been more than adequately demonstrated over the past two years.  There have been a number of Congressional hearings, other public debates and IPL association activities over the [evolving] versions of H.R. 2795 in 2005, the Berman/Boucher H.R. 5299 in 2004, major FTC and other studies and reports on patent reform, etc.  Now, on < ?xml:namespace prefix ="" st1 />August 4, 2006 Senators Hatch and Leahy have introduced “their own” Bill, S. 3818, the “Patent Reform Act of 2006”( for which there will be a House equivalent).  Although there will be considerable further debate into the next term of Congress, passage of some form of major new patent legislation next year seems quite likely.   Many of these patent reform proposals are not that controversial.  In particular, clarifications of “willful infringement,” §103(c), inter partes reexaminations, assignee filing, restoration of the prior patent venue statute, an “opposition system” of some kind, elimination of most interferences (and other “secret prior art” business investment uncertainties) with some form of “first inventor to file” plus some form of associated changes in §102 and “prior user” defenses,  etc.  Thus, there are highly likely to be a number of major changes in the present patent statute even if the most controversial provisions end up removed or amended in the final legislation.   

    This note is not about any controversial issues.  Rather, the intent here is simply to encourage better reviewing, by both the patent bar and academia, of specific drafting language issues that might present serious future ambiguities or unintended legal consequences, which seems to be getting insufficient attention.   Whatever version of any of these draft bills is enacted, it will generate a great deal of new statutory language for which there will be no legal precedents.  This new language will at best only be eventually interpreted in “cases of first impression” by individual panels of the Federal Circuit.   That should give readers pause to consider that some Federal Circuit interpretations of even relatively old patent law language have been quite controversial, and some have even been unanimously overruled by the Supreme Court.  This in turn should strongly suggest that very careful attention be paid to completely new and untested statutory language to insure that it is as completely unambiguous and as completely free of possible unintended interpretations as possible.   All members of the patent bar and their clients will be greatly affected by any of the pending “patent reform” bills. 

    No doubt those authoring the specific legislative language consider that it does not have any possible ambiguities or misinterpretations, to them.  However, legal and Congressional history is full of such surprises.   The frequent necessity for subsequent “technical corrections” legislation is evidence enough.  For example, it took several years for passage of technical correction legislation to fix an unintended problem created by the 1999 AIPA legislation’s amendment of 35 USC §102(e).  Patent law is a specialized legal area of uniquely semantically clever lawyers, who unfortunately rarely apply themselves to legislation in advance.   Furthermore Congressional staff members, no matter how brilliant, are highly unlikely to have sufficient patent law practice background to be able to anticipate all of the possible interrelated consequences of major changes in patent statutory language. 

    Thus, there should logically be a much broader participation by the patent bar in careful and critical reading of draft legislation and providing thoughtful comments on specific wording in time to fix it.  That is, not just depending on brief summaries of the intentions or alleged effects of this legislation by proponents or opponents.   Especially from lobbyists who have never practiced patent law, “planted” newspaper and magazine articles, and other very incomplete and unreliable sources.  More advance consideration is needed by those who can actually understand this legislation, the legal problems it is addressing, and the full ramifications of the specific legislative language.  In many cases this may be merely to suggest minor wording changes.  Even if the legislation itself is not changed, the legislative history might be improved in some cases.  This would also seem to be a far more meaningful activity for law school professors than non-pending legislative proposals which no one with any influence is supporting.  

    To pick just one example in this draft legislation language, consider the critical S. 3818 definition of the term “effective filing date of a claimed invention,” which is identical or similar to that of  other patent reform Bills.   All competent patent attorneys are familiar with this date and its criticality.  It is even more crucial for the proposed “first to file” system.  Under long established current case law it means the filing date of a patent application having full 35 USC §112 support for what is being presently claimed (in its subsequent patent or in any other pending applications claiming priority date benefit therefrom).  It has not ever meant the filing date of an application containing a bare unsupported claim with no §112 enablement of any kind.  

    So, let us consider the actual language of S. 3818 “SEC. 3” on p. 2.   It contains in subsections (h)(1) and (2) a new definition of the “effective filing date of a claimed invention.”  It states that the “effective filing date of a claimed invention” is:

    “(1) the filing date of the patent or the application for patent containing the claim to the invention;  or 

     (2) if the patent or application for patent is entitled to a right of priority of any other application under  .. or an earlier filing date in the United States under .., the filing date of the earliest such application in which the claimed invention is disclosed in the manner provided by the first paragraph of section 112.” [Emphasis supplied]

    First, note that SEC.3 (h) subsections (1) and (2) are defined in the alternative – “or”.  Note that the first alternative, (h)(1), has no §112 requirement at all.  It would literally provide an “effective filing date” for an application or patent merely “containing the claim” irrespective of whether or not it ever had any §112 enablement support as of its filing date, incongruously unlike the alternative (h)(2).  [As all patent attorneys know, a §112 enablement attempted to be added after the filing date is illegal “new matter.”]  Thus a literal reading of Sec. 3 (h)(1), especially as read in contrast to alternative (h)(2) (normal statutory interpretation) would give an “effective filing date” to a patent application filed with a bare claim to an invention even if there was no enablement example or description whatsoever for that claimed invention!   That is, granting a “first inventor to file” date for a bare concept suggestion with no teaching of any way to make or use it.   Yet, if that same application or patent had a foreign or U.S. priority claim it would not get that date benefit, because then (h)(2) would apply instead, appropriately requiring that “the claimed invention is disclosed in the manner provided by the first paragraph of section 112.”  Furthermore, would not applicants filing a continuation or divisional also lose this literally defined (h)(1) original effective filing date by thereby converting the application and its ultimate patent from (h)(1) to (h)(2)?

    It someone can clearly explain why a normal judge would not read this proposed statute this way if it is enacted, this reader would gratefully appreciate the enlightenment.

    Now, confusing this reader further, please note that on page 5 of this Bill you will find in a new §102(b)((3) another, different, and not cross-referenced definition [why?] of the same critical term for when a patent or application is “effectively filed,” but here only “under subsection (a)(2).” This effective filing date definition is only with respect to “subject matter described in the patent or application -”..”as of the filing date ..” [emphasis supplied]  

    There is also a subparagraph Sec. 3 (h)(2)(i) on page 3 stating that:

     “(i) The term “claimed invention” means the subject matter defined by a claim in a patent or an application for a patent.”

    Why is this Sec. 3 (h)(2)(i) definition presented only as a subparagraph of (h)(2), thus by normal statutory interpretation only defining the term “claimed invention” just in (h)(2)?  As noted above, the same term “claimed invention” also appears in (h) itself prior to both (h)(1) and (h)(2).  Was this deliberate for some reason?

    Further as to the vital question of what would still be prior art, or not, this p. 3 et sec S. 3818 version of a whole new 35 USC §102 definition of prior art seems shorter and simpler than that of  prior bills.  That may be desirable, but it should also trigger patent attorney and client interest in what is being left out of the present statute and all its case law, and how situations will be handled if this Bill becomes law.  For example, the present and very important “on sale” bar defense would be eliminated in this and other pending legislation. However, the prior pending H.R. 2795 §102 had been revised to make it clear that software in one’s own sold products would remain prior art to later attempts of others to patent it.  That was widely considered vital to avoid judicial debates over whether or not that internal software would be considered “publicly known,” since that would be the only other §102 defense left for this now-common situation under this new §102 .   Yet S. 3818 seems to have left out that vital provision. 

    Finally, just for a couple of other drafting examples, the S. 3818 amendment of §103 in (c)(1)(A) on page 6 restores an undisputed typographical error previously caught and corrected in the amended version of H.R. 2795.  Namely, “through” instead of “though” in: “A patent for the claimed invention may not be obtained through [sic] the claimed invention;..”   Also, what does the last line of S. 3818 Sec. 5 (b)(2) on p. 20 mean by “..such claim, the infringer.”?  

    In conclusion, there are undoubtedly other potential unintended interpretations or drafting errors subject to unpredictable D.C. and Federal Circuit de novo interpretations in all this new language that ought to be under a lot more academic and other public discussion.   Especially those relating to 35 USC §102 and other extremely important statutory sections affecting all aspects of patent law practice.  The introductory remarks for S. 3818 by Senator Hatch have welcomed further useful input on this draft legislation.  Careful and timely review and correction of specific language ought to be provided by all those in a position to do so.

    Cite as NOTE, “Patent Reform Bills: Do Not Forget the Details”, Patently-O, available at https://patentlyo.com/patent/2006/08/patent_reform_b.html.

    Patent Reform: Issa’s Litigation Pilot Gains Support (HR 5418)

    Patent, Patent Legislation

    Substantive patent reform legislation is dead for the year.  The one Bill that has some traction is Representative Darrell Issa’s patent litigation pilot program.  The Bill (HR5418) would cost only $5m per year and would change the random case assignments in district courts so that judges who opt in would be more likely to hear patent cases. The money pays for a law clerk with technical expertise.

    On July 26, 2006, the House IP subcommittee markup, members approved the Bill, although more amendments are expected to address concerns that the focus on particular "patent" judges could increase the opportunity for forum shopping.

    Rep Issa is the named inventor on dozens of patents and has personally been involved in patent litigation in his hometown of San Diego.

    There is no companion Bill in the Senate yet, although Senator Hatch is said to be "working on it."

    One motivation for the legislation is to try to reduce the CAFC reversal rate. Can someone do a study to see if Judges that handle more patent cases are less like to be overturned at the CAFC? You probably have a year to complete the study, because, even with support of the subcommittee, passage this year is still a long-shot.

    Documents:

    Patent Trolls: Fact or Fiction

    Patent, Patent Legislation

    Congress is holding hearings at 9:00 am (EST) June 15, 2006 to figure out whether legislative action should be taken to stop the evil marauding patent troll.  [Hearing Info] [Live Webcast] The speakers include Ed Reines (Weil Gotshal), Dean Kamen (Inventor), Paul Misener (Amazon.com), Chuck Fish (Time Warner).

    Mr. Reines defines patent trolls by their activity — a patent troll

    • has no significant assets except patents;
    • produces no products
    • has attorneys as its most important employees; and
    • acquires patents, but does not invent technology itself.

    Reines is also clear that issues of “patent quality” are distinct from the patent troll issue and should be addressed separately.

    In a loose proposal, Reines finds six problem areas of the law:

    • Willfulness (it is too powerful and ruins attorney-client privilege);
    • Submarine Patents (they are still around);
    • Continuation Applications (Applicants shape pending applications to capture the current market);
    • Damages (should be proportional to the value of the innovation in a larger product);
    • Choice of Forum (forum shopping is rampant);
    • Injunctions (eBay is wonderful, but might not be enough).

    Documents: