PATENT REFORM
John Pegram, senior principal at Fish & Richardson in New York, says that the compromises on wilful infringement and inequitable conduct are helpful. “If someone does something really odious, the judge would still have the authority to deal with it,” he adds. “What is interesting is the proposal to keep the wilful infringement issue away from a jury if the judge determines that there is a close case as to infringement, validity or enforceability. A complete bar of jury trials of wilfulness would raise the question of whether there should be other kinds of jury trials in the US, and lots of personal injury lawyers, for example, wouldn’t want it,” he says. “But the changes should stop people unnecessarily trying to drag issues of intent into cases.”
Further simplifying the litigation process is the removal of the ‘best mode’ requirement from patent applications. Tis currently requires patent applicants to disclose the best mode of application of their technology. Tis creates unnecessary burdens on applicants and makes patents more difficult to defend in court. Tere is also a provision proposed to transfer a patent action to another court “upon a showing that the transferee venue is clearly more convenient than the venue in which the civil action is pending”. Tis should discourage the practice of bringing cases in so-called ‘friendly’ courts.
But while changes to patent litigation will have a positive effect on the standard of cases that reach court and the standard of decisions that the courts make, some say they won’t address the central problem with patents in the US—the effectiveness of the USPTO.
David Kappos, head of the USPTO, said in a speech in November last year that “the time is now to get patent reform done”. His organisation is widely respected, but resource constraints have resulted in a considerable backlog of patent applications, which has slowed down the whole procedure. Some also complain that the examination processes at the agency do not produce patents of sufficient quality, which in turn leads to more litigation and less certainty for patent owners and potential infringers alike.
Te reform bill does set out ways to improve the lot of the USPTO. Potentially, the most important of these is the proposal to give it fee- setting authority. For an agency that struggles with budgets that are generally acknowledged to be too small, this could make all the difference. But as Pegram says, just because the agency would have the power to increase its fees, doesn’t mean that it would necessarily have access to more money. “Te Appropriations Committee of the House of Representatives can divert fees from the patent office to other projects. To make
as some of its predecessors, there is no guarantee that patent reform will happen any time soon, though “the prospects are better than at any time in recent history”, according to Pegram.
“ IF THE BILL BECOMES LAW, THOSE ALLEGING WILFUL INFRINGEMENT WILL HAVE TO DEMONSTRATE THAT THERE WAS OBJECTIVE RECKLESSNESS IN THE INFRINGER'S CONDUCT.”
A measure of the bill’s likelihood of success can be found in the reactions to it across the political and patent-user spectra. IBM, the largest patent filer in the US, supports the reform. “Te leadership of Senators Leahy, Sessions and others has forged a compromise bill that works for all members of the intellectual property community and represents real progress on patent reform,” says Robert Weber, senior vice president at IBM. “Modernising the patent system, as outlined in this bill, will protect inventors and promote innovation.”
an exemption in this case might be seen as an attack on the committee, which justifiably feels it plays an important role in providing checks and balances to government spending,” Pegram says.
Te bill also aims to improve patent quality by introducing a new 'post-grant review' and a new 'inter partes review' before the renamed Patent Trial and Appeal Board. Tese procedures would replace the current inter partes re-examination by regular examiners. Any issue of invalidity could be addressed in post-grant review, whereas inter partes review would be limited to a review of novelty and obviousness based on prior patents and printed publications. Both procedures should make the process more robust and, in theory, improve patent quality.
However, there will be different thresholds for beginning each of these new procedures, above the current ‘substantial new issue of patentability’ threshold for re-examination, and the period for requesting these reviews will be
restricted—unlike inter partes re-examination.
Te only cases subject to review will be those where it prima facie appears that there is some likelihood that at least one patent claim will be invalidated. It would be available only within nine months aſter the grant or reissue of a patent or—in the case of inter partes review—aſter nine months from issue or reissue or termination of post-grant review. Tese procedures normally will take 12 months; however, because of the current backlog of more than 12,000 ordinary appeals at the board, they will not take effect for one year and the USPTO will be permitted to limit the number of inter partes reviews in each of the next four years.
Despite all the positive signs, and the fact that the proposed reform is nowhere near as radical
12 World Intellectual Property Review March/April 2010
Intellectual Ventures, a non-practising entity that aims to create a patent marketplace through invention and licensing, says: “We very much support federal legislation that improves patent quality, maintains an inventor’s right to protect his/her invention and encourages investment in invention. We think passing a bill will benefit the entire IP industry by bringing certainty to those, like IV, who are engaged in the business of invention.”
So if industry likes it, the patent office likes it and lawyers like it, perhaps the bill can succeed where others have failed. Arguably the biggest element in its favour lies in the wide political support the idea enjoys. Te April 2010 proposal is bipartisan, endorsed by Democratic and Republican leaders of the Senate Judiciary Committee, including the Democrat Chairman Senator Patrick Leahy and Republican Orrin Hatch, who jointly introduced the 2009 version.
Hatch says: “Senator Leahy has worked tremendously hard to get this proposal where it is today and he should be commended for it. Tis bill doesn’t include all the changes I originally sought, but I believe we must come together to reform our patent system. It’s the right thing to do.”
Leahy agrees: “Tis compromise may not be everything that everyone wants, but it makes important reforms to the outdated patent system. Strengthening American patents will improve the quality of our inventions and innovations...Congress is committed to strengthening our economy, and the Patent Reform Act is an important component of that effort. I hope the leaders will soon schedule floor time for this important legislation.”
Te message seems to be that if you can’t please everyone, you can at least reach a compromise that doesn’t upset anyone. And it’s worth remembering that the last time the US enacted major healthcare reform was in the 1960s. Modern patent law came into effect in 1952. Reform is long overdue.
www.worldipreview.com
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