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Section Works Toward Patent
Improvement and Reform
From the Chair
William L. LaFuze
Section Chair, 2004-2005
 The
Section of Intellectual Property Law has been busy working on significant
patent law reform and improvement.
At its Council meeting on March 4, the Section approved two reports
to serve as the Section's responses to reports of the Federal Trade
Commission and the National Academy of Sciences on patent improvement
and reform. The proposals for changes to our patent law by these
two organizations are funda-mental and sweeping in many respects.
This Chair's letter is based on the two reports mentioned above,
which were prepared principally by Don Martens and Bob Armitage.
Many thanks to Don, Bob, and many others who contributed to the
monumental effort to prepare these Section reports. The reports
were submitted for blanket authority to other Sections of the ABA
and no objections were received.
Because of space requirements, this article will necessarily
and intentionally focus on only a few of the many important issues
addressed in the FTC and NAS reports. The complete text of the voluminous
reports, together with Section reso-lutions which support the Section's
position, can be found on the Section's web-site at www.abanet.org/intelprop/executive.html.
Most of the changes suggested by the NAS and
the FTC are rooted in achieving two goals: lowering the cost of
patent disputes and increasing patent quality. There is considerable
overlap of issues in the two reports and the responses of the Section.
Post-Grant Review of Patents
The Section endorses a new administrative procedure to allow post-grant
review of patents. A low-cost procedure for challenging patents
is a very attractive concept. However, the devil is in the details
as to how such a system should be structured. Currently, the Section
proposes a post-grant opposition procedure with the following attributes:
an entity potentially adversely affected by the erro-neous issuance
of a patent could raise any issue in the PTO it might raise in de-fense
of a claim of patent infringement in court, but it could do so with
the ex-pectation that a highly qualified patent examiner, rather
than a jury, would con-sider the issue promptly, in accordance with
more limited discovery than in liti-gation, and presumably at substantially
less cost as compared with litigation. The Section favors a preponderance
of the evidence standard of review by the PTO on validity issues.
Restrictions on Certain Issues in Patent Litigation
One way to reduce the costs of patent litigation is to address, postpone,
or eliminate certain issues that frequently arise in patent litigation.
Thus, the Sec-tion believes that the issues of "best mode,"
inequitable conduct, and willful infringement, all of which require
substantial resources to litigate, be eliminated or limited. More
specifically, the Section believes that the requirement of "best
mode" should be eliminated. The Section also believes that inequitable
conduct should be permitted as a defense under more limited circumstances
than exist under present law. For example, the Section favors a defense
of inequitable conduct to render a patent invalid only if the claims
in issue would not have issued "but for" the inequitable
conduct. As for willful infringement, the Section favors limiting
the timing and the scope of waiver when an opinion of counsel is relied
upon as a defense to an accusation of willful infringement.
First Inventor to File
The Section supports the "first inventor to file" system,
in contrast to the "first to invent" system under current
patent law, both because it believes a "first inventor to file"
system is a best practice for the United States, and also because
it is critical to patent law harmonization. The ABA House of Delegates
recently adopted the "first inventor to file" system as
an ABA position. The first inventor to file concept is coupled in
a harmonization context with retaining a one-year grace period in
which pre-filing disclosures made directly or indirectly by the
inventor cannot bar the inventor from obtaining a valid patent.
The Section opposes sev-eral features of European law, such as "absolute"
novelty; in contrast, the Section has endorsed retaining the requirement
of U.S. patent law that disclosures must be publicly accessible
in order to qualify as prior art. The Section also opposes "self-collision,"
a doctrine in which an inventor's own prior-filed, copending patent
application can be cited as prior art against the same inventor.
PTO Funding
The Section, as well as the ABA, believe the PTO needs additional
resources and should be adequately funded. The funding of the PTO
through the appropriations process has been a nightmare for more
than a decade, with as much as $600 million or more diverted to
other agencies of the Department of Commerce. In order for our patent
system to operate properly, the PTO needs more funding to hire the
examiners necessary to carry out the examination process in a quality
manner. Essential programs have been curtailed, and planning for
the future op-erations of the PTO has been consistently frustrated
by the lack of funding for many years. The Section believes this
is a process that must change if the patent system is to work properly.
Other Issues
Space does not permit a comprehensive treatment of all issues. But,
two other issues are noteworthy. The Section opposes the FTC's proposal
to reduce the burden of proof for challenging patent invalidity
in court litigation from a "clear and convincing" standard
to a preponderance of the evidence standard. Also, the Section favors,
in principle, the limited expansion of the "second pair of
eyes" review process to enhance patent quality.
Reference should be made to the complete responses
to the NAS and FTC reports (available at www.abanet.org/intelprop/reports/NAS_Report.pdf
and www.abanet.org/intelprop/reports/FTC_Report.pdf
respectively) for additional information and positions of the
Section.
Stay tuned, as legislation is expected to be introduced
soon to address the patent reform issues noted above, as well as
others.
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