Senate Urged to Bring Patent Reform Bill to Vote

September 20th, 2010

Legal news sources report that a group of 25 senators wrote a letter to Sen. Reid on September 15, 2010, asking him to bring the bill (S. 515) to a vote quickly.  As we reported in the MMM IP NewsFlash last year (May 2009), patent reform has been unsuccessfully proposed about every two years for more than a decade.   Passage of reform in the past has been difficult due to disagreements between two very different stakeholders:  the pharmaceutical industry (with their strange bedfellows of small business and individual inventors) are pitted against the so-called “big IT” and other large companies, which have generally lobbied for weakening patent protection.

Here is a link to an article in

While several significant IP stakeholder organizations appear to support the bill, it is not clear whether the proponents have enough votes to pass the bill, and the opposition camp has not yet responded.  It is also not clear how the provisions would practically cut down the time it takes to obtain a patent, although the letter to Sen. Reid clearly mentions a desire for reducing pendency to less than a three years’ wait.

A summary of the main features of the amended bill (now called the Patent Reform Act of 2010 after Manager’s Amendments in March 2010 to the Patent Reform Act of 2009) can be found here.

Some of the highlights include:

First-To-File: The bill would largely eliminate the unique U.S. only “first-to-invent” priority system in favor of a “first-inventor-to-file.” Also eliminates the one-year grace period unless the inventor was the “first-discloser.” A “derivation” proceeding would replace interferences.  This is a major conceptual change in the law and disfavors small companies and individuals.

False Marking: Eliminates the right of “any person” to file a false marking claim. Rather, those claims would be limited to individuals who have “suffered a competitive injury.”

Damages: A court would be required to “identify the methodologies and factors that are relevant to the determination of damages, and the court or jury, shall consider only those methodologies and factors relevant to making such determination.” Other more complex provisions are also included.  The provisions generally create a better situation for accused infringers, but it do not necessarily limit damage awards.

Trial: Creates a right to split patent trials into segments of infringement and validity; damages; willfulness. (This approach tends to favor defendants.)

Willful Infringement: Spells out that the enhanced damages are for “willful infringement” that is at least objectively reckless by clear and convincing evidence. “Knowledge alone” is not sufficient for a finding of willful infringement and that any close case should be decided against willfulness.

Post-Grant Review: The statute would provide for a whole new system of post-grant reviews that would be handled directly by the patent appeals board.  The proposal also calls for a new “supplemental examination” to ensure that the patentee has fulfilled the duty of disclosure.

Pre-Issuance Submissions of Prior Art by Third Parties: These would be now be allowed.

Litigation Venue: Cases should be transferred to venues that are “clearly more convenient.”

Fee Setting Authority: The USPTO would be given authority to adjust its fees so long as the fees are “in the aggregate set to recover the estimated cost to the Office for processing, activities, services and materials relating to patents and trademarks, respectively.”

Micro-Entity: A “micro entity” that has fewer than 5 patent applications would qualify for reduced official fees.

Best Mode Requirement: The requirement to disclose the “best mode” known to the inventor at the time of filing remains in the law, but failure to disclose the best mode would no longer be an invalidity defense.

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