PATENT REFORM IN THE U.S.

Q. TODD DICKINSON

APRIL, 2011

1

Reform 2001-2011

Legislative debate and stalemate 2005 House bill drafted in response to 2001 studies at

FTC and DOJ Stakeholders unable to reach agreement Widely unacceptable version passes House, Sept. ‘08 House defers to Senate in 111th Congress, 2009-10

Same time Courts begin take “reform” casesBoth CAFC and U.S. Supreme CourtAlters the legislative debate

2

Court “Reform”

eBay (SCt) – permanent injunctionsSeagate (CAFC) – willfulness/treble damagesi4i (SCt/CAFC) - damagesUniloc (CAFC) - damagesT Tech (CAFC) - venueBilski (SCt) - business method

patentabilityKSR (SCt) - obviousnessTherasense (CAFC) - inequitable conduct

3

Patent Reform Legislation

LOOKING BACK AT THE 111TH CONGRESS….

4

Patent Reform Legislation - Senate

S. 515 (111th Congress)

Introduced in March, 2009. Senate Judiciary Committee approved an amended version of

S. 515 on April 2, 2009. Chairman Leahy announced a “compromise” in March, 2010. September (2010) Letter of Support from 25 Senators. No Senate Floor Consideration in the 111th Congress.

5

Patent Reform Legislation -- House

H.R. 1260 (111th Congress)

Hearing on April 30, 2009 Waited for the Senate to move first After Senate Committee approved bill, House

Committee leadership issued statements reserving prerogatives and suggesting changes are needed.

6

Patent Reform Legislation – 112th Congress

Outlook for the 112th

Both Judiciary Committee Chairmen said this would be a priority

Began in the Senate with the introduction of S. 23, the Patent Reform Act of 2011, later renamed the “America Invents Act.”

Senate marked up quickly and moved to Senate floor

What follows summarizes the bill as approved by the Senate on March 8th.

7

S. 23, the America Invents Act

Transition to a first-inventor-to-file system Effort to strike provision voted down 87 to 13 Corresponding changes to sections 102 and 103

USPTO fee setting authority Small entities get %50 discount; Micro entities get 75%

discount

End diversion of fees by establishing revolving fund to assure Office can utilize all fees it collects

3rd party submissions of prior art

8

S. 23, the America Invents Act

PGR (9-month first window) “Opposition” – broader range of prior art and discovery allowed. Fast-track proceeding. 3 judge (APJ) panels

IPR Conducted by APJs Threshold (“reasonable likelihood”), estoppel (“reasonably could

have raised”), joinder One year to complete; 4 year Office implementation

Best mode requirement reform

Supplemental examination (response to inequitable conduct reform) Cure defects prior to litigation

9

S. 23, the America Invents Act

Patent False Marking statute Must demonstrate competitive injury

Repeal of the residency requirement for Federal Circuit judges

Establish special review proceeding for business method patents

Clarifies CAFC jurisdiction in response to Holmes Group

Unpatentability of tax strategies (as within the prior art)

10

S. 23, the America Invents Act

Extends USPTO statute of limitations for disciplinary actions Earlier of 10 years from occurrence, or 1 year from when

PTO knows

USPTO authority to establish three satellite offices Creation of a USPTO ombudsman

Language adopted giving USPTO authority to prioritize examination of inventions of “national importance”.

11

S. 23, the America Invents Act

What’s NOT in the bill:

Damage provisions deletedWillfulness provisions deletedDetailed venue provisions deletedNo specific inequitable conduct reformElimination of “opt out” of 18 month

publication

12

S. 23, the America Invents Act

Bill passed the Senate 95 to 5 on March 8th.

Amendment to delete First-inventor-to-file fails 87-13.

13

Patent Reform Legislation - House

House Judiciary Committee has conducted multiple related hearings thus far: January 25, Oversight hearing on the USPTO February 11, Oversight hearing on Patent Reform March 10, on Review of Judicial Decisions on Patent

Law

Bill introduction and legislative hearing on March 30.

14

H.R. 1249, the America Invents Act

How does H.R. 1249 compare to S. 23? Most of the bill tracks S. 23 closely:

First-inventor-to-file University Funding AgreementsAssignee filing Tax Strategy PatentsBest mode Virtual/False MarkingIPR Transitional Program for BMPPGR (12, rather than 9 months) CAFC JurisdictionPatent Trial and Appeal Board PTO Revolving Fund3rd Party Submissions Satellite Offices (requires 3)Fee setting authority PTO Ombudsman ProgramMicro entity Priority Exam for Important techSupplemental Examination

15

H.R. 1249, the America Invents Act

However, some interesting differences: Sec. 4. Prior user rights (PUR) in conjunction with FITF (Carve out an

exception for university and affiliated tech transfer entity. )

Sec. 5. In the IPR provisions, lowered the threshold to “substantial new question of patentability,” extended the time in which a request can be made after suit, and inserted factors for granting a stay of litigation during pendency of these proceeding (for both PGR’s and IPRs).

Sec. 18. Some additional “strengthening” of the business method patent transitional language (i.e. the Schumer amendment) by specifying an interlocutory appeal and mandatory de novo review at the CAFC.  There is also language regarding special venue and “Loser Pays” provisions for suits involving business method patents. 

Note: no repeal of the Baldwin Rule

16

H.R. 1249, the America Invents Act

Road ahead?Committee markup expected soonObama Administration “SAP” Final debate and passage by __?___.

17

Thank you!

Q. Todd DickinsonExecutive Director

AIPLAtdickinson@aipla.org

18