Articles

United States Grapples With Proposed Patent Reform Legislation

Frederick Michaud and James Arpin

Over the past several months, the United States Congress has been considering multiple proposed versions of legislation that would effect substantial changes in the United States Patent Code, and in the procedures for obtaining and enforcing U.S. Patents. The latest draft bill, H.R. 2795 (still under committee consideration), may represent a significant step toward viable reform legislation, because it eliminates three of the major sources of contention in prior draft bills.

What remains are provisions aimed primarily at patent law harmonization and improving the quality of issued patents. The previous drafts included: (1) a proposed revision of 35 U.S.C. § 283 that would have limited the availability of injunctive relief for patent infringement; (2) the addition of 35 U.S.C. § 123 to limit the enlargement of claims in continuing applications; and (3) a European-style post-grant opposition proceeding that would have included a six-month window for opposing a patent’s validity following an allegation of infringement made any time during the enforceable life of the patent. These three provisions are gone from H.R. 2795.

PATENT LAW HARMONIZATION

First-Inventor-To-File Priority

H.R. 2795 replaces the U.S.’s existing first-to-invent system with a system more like those of the rest of the world, in which the first inventor to file a patent application is awarded the patent.

While the first-to-invent system and priority contests would be eliminated by this change in priority law, a procedure for a derivation-type interference practice, called an inventor’s rights contest, would be established to resolve allegations that the first filer is not really an inventor.

Elimination Of Best Mode Requirement And Other Subjective Criteria

The subjective intent of the inventor or others involved in patent prosecution is the subject of several sections of current U.S. patent law. For example, 35 U.S.C. § 112 requires disclosure of the best mode “contemplated by the inventor” at the time of filing for carrying out the invention. H.R. 2795 would eliminate the requirement of revealing best mode, and would modify the law in other instances in which subjective intent is currently an issue. This step can be seen as a further attempt to harmonize U.S. patent law with the patent laws of most other countries, which generally do not consider issues involving subjective intent.

While some concerns have been expressed about these changes, especially eliminating the requirement for disclosure of the best mode, it is unlikely that those concerns will derail the legislation or have long-term adverse consequences. As to best mode, for instance, many lawyers and commentators believe that the requirement for an enabling disclosure sufficiently protects against an inventor’s holding back valuable information in the form of trade secrets.

PATENT QUALITY ENHANCEMENTS

Publication Of Virtually All Applications After 18 Months

Under present U.S. law, an inventor can opt out of publication of an application if the application is not filed outside the United States. This option would be eliminated by H.R.2795’s deletion of 35 U.S.C. § 122(b)(2)(B).

Post-Grant Opposition

Post-grant oppositions continue to be a major feature of the proposed patent reform. Advocates of opposition hope that allowing an opposition to be filed in the U.S. Patent and Trademark Office (“PTO”) within a limited time window, immediately after the patent issues, would help weed out invalid patents in a procedurally simple, relatively inexpensive forum. An attempt in the previous draft of the bill to leave the opposition period open for the enforceable life of the patent has been -- at least for the moment -- defeated, so under the present proposed legislation, an opposition would need to be filed no later than nine months after the patent is granted.

An estoppel provision prevents the opposer from later asserting the invalidity of any claim addressed in the opposition “on the basis of any issue of fact or law actually decided by the panel and necessary to the determination of that issue.” A new provision of this portion of the bill prevents a court from staying an infringement action pending the outcome of an opposition.

Some concern has been expressed about the fact that the proposed opposition procedures would permit invalidity to be proven by “a preponderance of the evidence” rather than by “clear and convincing evidence” as is the case when a defendant seeks to invalidate a patent in litigation. Currently, the PTO Board of Patent Appeals and Interferences (as well as Patent Examiners) renders patentability decisions based on the lower “preponderance” standard. Issued patents, however, are statutorily presumed to be valid. Deciding the validity of issued patent claims in oppositions by the preponderance standard could thus represent a significant change. For example, if this lower preponderance burden is adopted, would alleged invalidating prior art that comes in through the testimony of a witness be able to meet the “preponderance” burden standing by itself, or would corroboration continue to be required? Also, validity would be determined in opposition proceedings on the basis of the broadest reasonable construction of the claims. That, too, differs from how courts construe patent claims when considering validity (in view of case law instructing judges to construe claims so as to preserve their validity, if possible).

Reexamination

In an attempt to make patent reexamination a more appealing option, 35 U.S.C. § 315(c) would be amended so as to limit the estoppel effect of an unsuccessful reexamination, which currently arises in an infringement action against the requester of a previous reexamination on the patent, acting to bar invocation of any defenses the requester actually raised or could have raised during the reexamination. The pending bill limits the estoppel effect to bar only those litigation defenses that were actually raised in the prior reexamination

Third party Submissions To The PTO

In an attempt to open yet another avenue for ensuring that relevant prior art or other information salient to examination of an application is considered by the PTO, 35 U.S.C. § 122 would be amended to allow any person to submit any published material of potential relevance for consideration and inclusion in the record of a patent application. The published material would need to be timely submitted with a description of its relevance and “such fee as the Director may prescribe.”

Conclusion

While further changes to the draft reform legislation are likely inevitable, and the ultimate fate of the Bill, or the date of its eventual enactment, are uncertain, it seems likely that at least some of the significant changes currently proposed will be enacted into law in the next year or two, and all parties interested in the acquisition or enforcement of patents will probably wish to monitor the continual evolution of the proposed legislation.

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