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The Patent Reform Act of
2010: A substitute S. 515
May 2010
SHARING OPTIONS:
Here comes the Patent Reform Act of
2010 in the form of an
amendment to S. 515. The amendment seems to meet the goal of establishing a
simpler, objectively based, transparent patent
system that can eliminate
patents that should not have been issued and speed the processing of patents
that should be issued. The new patent law
includes a number of improvements to
the patent laws, such as provisions to update and improve the patent marking
statute.
By eliminating the arcane and subjective rules associated
with the current first-to-invent system, the amendment will make
it easier and
less costly to obtain patent protection in the United States, which will
stimulate investment in new technologies. Moreover, while all
inventors will
continue to benefit from a one-year grace period in which to file a U.S. patent
application after publicly disclosing their inventions,
the incentive of the
first-inventor-to-file system to file applications promptly will redound to
their benefit in obtaining patents in our major
trading partners. Inventors who
delay filing their U.S. applications (on the tenuous assumption that they will
be able to obtain a U.S. patent by
proving that they were first to make the
invention) run the risk of being second-to-file in the rest of the world where
patents are awarded to the
first inventor to file. Facilitating patent
protection outside the United States for American technology will stimulate the
export of American products
produced by American workers.
The amendment will strengthen patents granted in the United
States by allowing the public to participate in the patent granting process and
by strengthening the administrative procedures in the U.S. Patent and Trademark
Office (USPTO) for reviewing patents after grant.
The bill will expand the
opportunity for the public to submit information to patent examiners working on
individual patent applications, together with
concise descriptions of its
relevance. This will help ensure that all relevant information will be
considered during the examination process, allowing
the USPTO to conduct a
quality examination before a patent is granted, reducing the need to rely on
post-grant clean-up procedures.
The amendment will provide a robust, post-grant review that
must be requested within nine months after patent grant
and, if initiated, be
completed within one year. Patents could be challenged on all issues of
patentability. While both the initial post-grant review
and the revised inter
partes re-examination proceedings will
contribute to ensuring that only valid patents will survive, both procedures
also contain safeguards to prevent harassment of patent owners. Both procedures
will be handled by a panel of administrative law judges. Importantly,
patent
owners who promptly file suit after patent grant will be assured that the court
will not automatically stay its consideration of the patent
owner's motion for
a preliminary injunction on the basis that a petition requesting a post-grant
review has been filed or that such a proceeding has
been instituted.
The amendment would address a number of litigation reforms,
some initially
recommended by the National Academies of Sciences (NAS)
, and
others, some quite controversial, urged by various special interests. The
amendment addresses the recommendation of the NAS to modify or
remove the
subjective elements of patent infringement litigation that depend on the
assessment of a party's state of mind and increase the cost and
decrease the
predictability of such litigation. Under the bill, "failure to disclose the
best mode shall not be a basis on which any claim of a patent
may be canceled
or held invalid or otherwise unenforceable."
Another of the subjective elements
of patent infringement
litigation that unnecessarily increases the costs for both obtaining patents
and litigating them is the doctrine of
"inequitable conduct"—whether an
inventor or patent attorney intentionally misled the USPTO in prosecuting the
original patent. While the amendment
does not go as far as modifying or
removing the doctrine as recommended by the NAS, it does provide a remedial
avenue for patent owners to bring to the
attention of the office information
which might affect the scope of their patents. The bill allows patent owners to
request, prior to the institution
of litigation, "supplemental examination" to
consider any information believed to be relevant to the patent. Any patent
surviving such reexamination
will not be held unenforceable on the basis that
such information had not been considered or was incorrect in the initial
examination process.
Importantly, supplemental reexamination would not allow a
patent owner to avoid sanctions based upon
violations of criminal or antitrust
laws nor would it allow those responsible for any misconduct in proceedings
before the office to avoid disciplinary
sanctions.
The amendment maintains the compromise reached in the Senate
Judiciary Committee that
fully responds to the allegations of inconsistency and
unfairness in awards of reasonable royalty patent damages. It rejects the
proposals calculated
to reduce inventors' recoveries by narrowing claimed
inventions through the use of definitional devices by limiting the claimed
invention for damages
purposes to "its inventive contribution," its "patentable
features" or "the patent's specific contribution over the prior art." Instead,
the
bill sets forth a "gatekeeper" approach which ensures that courts or juries
consider only those damages contentions that are cognizable at law and
supported by substantial evidence. This approach ensures that patentees will
receive appropriate compensatory damages for the unauthorized use of their
patented inventions, while at the same time fully responding to the allegations
of runaway jury awards.
The third subjective element in patent litigation addressed
by the NAS is "willful infringement," under which a court may
increase damages
up to three times if the court or jury determines that the accused infringer
willfully infringed a patent. During the period when the
NAS reviewed this
doctrine, there was no effective threshold test for alleging willful
infringement, therefore the required level of pre-filing
investigation by the
plaintiff was relatively modest and willfulness was asserted in most cases.
In response to a growing number of patent infringement cases
filed by patentees in perceived pro-plaintiff venues with little or no connection
to the parties in the case or the locations of their operations, witnesses or
documents, proposals were made to essentially restrict patent suits to
the
jurisdiction where the infringer had its principal operation. This draconian
rule would have denied manufacturing patentees the opportunity of
bringing suit
against infringers in the district where the patentee was located and had its
witnesses and evidence.
The amendment to S. 515 provides a very measured and
salutary approach to reigning in undesirable forum shopping. It requires
the
court to transfer a patent infringement action "upon a showing that the
transferee venue is clearly more convenient than the venue in which the
civil
action is pending."
Stephen Albainy-Jenei is a patent attorney at Frost Brown Todd LLC, serving up chat at
PatentBaristas.com. Further analysis of the amendment to S. 515 can be
found on
that Web site. Write albainy-Jenei with comments or questions at
Stephen@patentbaristas.com. Back |
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