Patent Reform Update March 12, 2008

March 12 – Chairman Leahy, Ranking Member Specter, and Senator Hatch release 15 possible amendments to S 1145, in an effort to “address the concerns of the wide cross-section of interested parties” with whom they have been meeting since the bill was reported out of the Senate Judiciary Committee last July. The trio appear optimistic that the amendments will allow the full Senate to “work through the remaining issues.” In Senator Hatch’s words, “[w]ith the nation’s economic troubles so prevalent in people’s minds nowadays, Congress must strive to help America keep its competitive edge. [W]e believe we are close to striking the right balance to modernize our nation’s outdated patent system, so innovators can receive high-quality patents more efficiently and avoid wheel-spinning and counterproductive litigation.”

Their statement announcing the amendments can be found here. Senator Reid has signaled that the full chamber could take up the bill in April.

The substantive amendments are as follows:

• Eliminating failure to comply with the “best mode” requirement as an invalidity defense in litigation, while maintaining it as a requirement of patentability during the initial examination by the Patent Office. Please click here for the full text.
• Restoring third-party ex parte reexamination. Please click here for the full text.
• Requiring the Federal Circuit to accept one interlocutory appeal of a District Court’s claim construction order where the District Court determines there is a “reasonable ground for difference of opinion” and the appeal “may advance the ultimate termination of the litigation.” The District Court may also certify subsequent interlocutory appeals under this standard, but the Federal Circuit has discretion whether to accept them. Please click here for the full text.
• Deleting a part of the bill that would have modified the current law on marking. Please click here for the full text.
• Codifying the Federal Circuit’s recent decision in Seagate, which requires a showing of “objective recklessness” to prove willful infringement. Please click here for the full text.
• Allowing parties to a derivation proceeding before the Patent Office, where the requestor claims that another applicant has “derived” the invention in its application from the requestor, to arbitrate their dispute, or to informally settle the dispute by submitting a statement to the Patent Office listing the correct inventor, so long as the Patent Trial and Appeals Board does not find the submission “to be inconsistent with the evidence of record.” Please click here for the full text.
• Defining an adverse “final decision” on a party’s invalidity defense, which would preclude it from seeking or maintaining post-grant review by the Patent Office, as “a final decision issued by a United States district court or by the United States International Trade Commission.” Please click here for the full text.

In addition, there are the following provisions:

• Requiring Federal Circuit judges that live outside Washington, D.C., to use an existing United States Courthouse near where they reside for their chambers. Please click here for the full text.
• Allowing appeals to the Federal Circuit in interference proceedings instituted prior to the enactment of the Patent Reform Act. Please click here for the full text.
• Allowing the Secretary of Commerce to approve appointments to the Patent and Trademark Board previously made by the Director of the PTO, with the effective date of the approval relating back to the date of initial appointment, to ensure compliance with the Appointments Clause of the Constitution. Please click here for the full text.
• Other minor clarifications and revisions to sure consistency and eliminate redundancy in the bill:
  Purpose: To clarify the duties of the Patent Trial and Appeal Board.
  Purpose: To strike redundant language concerning the effect of final post-grant review proceedings.
  Purpose: To make a conforming change.
  Purpose: To make a technical correction.
  Purpose: To provide the provisions of the Act are Severable.

All the amendments may be downloaded together by clicking here.