Patent Reforms in the Works Will
Change Your Professional Life

From the Chair
William L. LaFuze
Section Chair, 2004-2005

Activity on the Hill continues to be intense with respect to some of the most sweeping proposals for patent law change in history.

On April 12, a Committee Print Regarding Patent Quality Improvement was distributed by Congressman Lamar Smith, Chair of the Subcommittee on Courts, the Internet, and Intellectual Property of the Judiciary Committee of the United States House of Representatives. Since that time, there have been two hearings before the House IP Subcommittee and one before the Senate IP Subcommittee. The ABA Section of Intellectual Property Law was invited to testify at the first of the three hearings, and my testimony can be found at www.abanet.org/ intelprop/
LaFuze_Testimony_4-20-05.doc.

The Committee Print addresses some major issues that collectively may amount to the most significant changes since the first patent act was passed. Among the issues addressed are first inventor to file, post-grant oppositions, willful infringement, redefinition of prior art, assignee filing, elimination of best mode, inequitable conduct, injunctions, continuation applications, infringement by combining components outside the United States, and damages for infringement of an invention incorporated into a known method or apparatus. Congressman Smith has encouraged the ABA Section of Intellectual Property Law to confer with other bar and industry groups in an attempt to reach a consensus on patent reform issues. As a result, Section representatives have met frequently with representatives of the American Intellectual Property Law Association (AIPLA), the Biotechnology Organization (BIO), the Intellectual Property Owners Association (IPO), and the Business Software Alliance (BSA). Members of these groups are united on many issues in the Committee Print, divided on others, and in general agreement on the general approach to some issues (although differing in the details, some of which are very significant).

Because of the importance of these potential changes in the law, every practitioner should learn about the proposed changes, and participate to the extent practicable in the ongoing discussions among members of the bar and users of the patent system. In this way, we can best strive to achieve patent reform based on as much of a consensus as possible.

I would like to devote the remainder of the short space I have available for this column to discussing a few of the issues in the Committee Print.

First Inventor to File

Definition of Prior Art

The Committee Print redefines prior art in a manner intended to be highly simplified to eliminate subjective criteria. It replaces the “use” and “sale” tests with a test that information be “reasonably and effectively accessible” without geographic limitations. This is a highly material change in the law of prior art. The Section supports this provision.

Post-Grant Review of Patents

The Committee Print provides for a new administrative procedure in the PTO to allow post-grant review of patents. The Committee Print provides for a period of nine months from issue during which any party may institute a post-grant review proceeding. Essentially all grounds that might be asserted to invalidate a patent in court could be asserted in such a proceeding. Such an opposition would feature limited discovery, presentation of direct evidence by declaration, subject to cross examination by depositions, a one-year deadline for decision from the start of the opposition, and a decision by a panel of administrative patent law judges. The burden of proof to establish invalidity in such a proceeding is by a preponderance of the evidence, rather than a clear and convincing standard as in district court litigation. The Section generally favors this provision.

Publication After 18 months

Elimination of Best Mode

The Committee Print eliminates the “best mode” requirement. The Section supports this provision.

Willful Infringement

The Committee Print greatly raises the bar for a finding of willful infringement. It requires, in order to obtain enhanced damages, that the infringer receive a prior notice of specific acts of infringement, or that the infringer deliberately copied the patented invention and that the infringer had no good faith belief of a defense to the patent. The Section generally supports this provision.

Inequitable Conduct

The Committee Print raises the standard to prove inequitable conduct. It provides a “but for” nexus between the alleged inequitable conduct and the granting of invalid claims. It also provides for inequitable conduct issues to be sent back to the PTO with the possibility of substantial civil sanctions and discipline. The Section generally supports this provision.

Injunctions

The Committee Print lowers the standards for a prevailing patent owner to obtain an injunction against an infringer. It eliminates a presumption of irreparable harm, and requires the Court, in determining whether an injunction should issue, to weigh all the evidence including the extent to which the patentee makes use of the technology claimed by the patent. The Section opposes this provision.

Continuation Applications

The Committee Print prohibits claims of broader scope in patent applications than those that have been published, issued, or made in an application within 12 months after the earliest filing date for which priority is sought. The Section opposes this provision.

Damages for Infringement of Invention Incorporated into a Known Method or Apparatus

Infringement by Combining Components Outside the U.S.

The Committee Print amends section 271(f) to provide that components combined outside the U.S., for purposes of infringement, exclude nontangible items, such as software, which are combined with other components to create the allegedly infringing combination. The Section opposes this provision.

More detailed information can be found by referring to the Committee Print, located at www.abanet.org/intelprop/home/DraftPatentStatuteDDC.pdf, and the ABA Section of Intellectual Property Law White Paper: “Agenda for a 21st Century Patent Reform,” located at www.abanet.org/intelprop/home/PatentReformWP.pdf.

Thanks again to all of our wonderful volunteers who have contributed so greatly to the work of our Section. Particular mention goes to Don Martens, Bob Armitage, Don Dunner, and Tony Figg, who have been saddled with much of the work on patent legislative reform.