An interesting patent law article was published today at Popular Mechanics. The article explored the impact that the Patent Reform Act of 2009 could have on innovation, primarily through the opinions of a variety of patent system constituents interviewed for the article.
Although focusing heavily on the impact of the change from first-to-invent to first-to-file systems under the proposed patent laws, the article was well-written. A great read if you have a few minutes to spare. Check it out.
As anticipated earlier today by Promote the Progress, new patent reform legislation was introduced today in both the Senate and the House of Representatives. A copy of the Senate bill may be viewed here. An identical bill (here) was introduced in the House.
The following list of sources provides some coverage and commentary related to this new legislation. Enjoy!
A joint letter from 135 U.S. manufacturers to President Obama, dated February 10, 2009, has been circulating the patent blogosphere recently. In the letter, the manufacturers caution against drastic changes to U.S. patent law, such as reducing penalties for patent infringement, which they believe will discourage innovation and result in reduced investment and lost jobs in our country. The letter encourages only those legislative changes that would benefit the broad spectrum of patent stakeholders (alluding to the fact that changes to patent infringement penalties were primarily supported by high-tech companies, and few others). A copy of the letter may be found here.
The following list of companies signed on to the above-mentioned letter.
Most practitioners are well aware that the ill-conceived Patent Reform Act of 2007 died in Congress last year. Indeed, the bill was widely opposed, and many of us found it surprising that the bill actually passed the House before going down in flames in the Senate.
Despite, or because of, the full attention that Congress will necessarily be giving to our economic situation this year, some believe that patent law reform will again be addressed by Congress. Related to this potential reform legislation, some excellent suggestions were posted this week at the IP Watchdog, and are reproduced below for the convenience of our readers:
1. Codify the Duty of Candor
Congress should codify 37 CFR 1.56 because the Federal Circuit refuses to acknowledge the Patent Office defined duty owed by applicants and representatives. This has caused tremendous difficulty with respect to getting the industry on board with Patent Office reforms, and has lead to hostility and resentment coming from the Patent Office and directed at the Patent Bar and industry. The Patent Office wants the best art disclosed only and the Federal Circuit requires everything, so Rule 56 has been mooted by the Federal Circuit because attorneys and applicants know that if a patent issues and becomes a valuable asset the Federal Circuit will have the final word on enforceability and inequitable conduct. Understandably, attorneys and applicants follow the Federal Circuit ruling, regardless of how insane it may be, which seemingly infuriates the PTO hierarchy. This has lead to the Director of the Office of Enrollment and Discipline, Harry Moatz, to threaten in speeches that he will pursue attorneys for ethical violations when they submit to much prior art, and has lead to extreme backlash against Accelerated Examination and the proposed Examination Support Document. Even Judge Rader explained during oral arguments in the PTO claims and continuations appeal that it would be insanity to file an ESD given recent Federal Circuit rulings on inequitable conduct. For more see Patent Reform Proposal: Codify USPTO Rule 56.
2. Amend 35 USC 103 to Moot KSR v. Teleflex
Congress should modify 35 USC 103 to moot the United States Supreme Court decision in KSR v. Teleflex. In KSR the Supreme Court created a rule that allows for inventions to be patented only when the solution is counter-intuitive. If there was any reason to pursue a particular inventive path that would make the invention obvious and unpatentable, which is nonsensical. If the KSR test is faithfully applied only those that accidentally invent or stumble upon an innovation can get patents, which means that we are now back to the “flash of creative genius” standard that Congress specifically legislated out of the Patent Laws with the 1952 Patent Act re-codification. Luckily, so far, KSR does not seem to be widely used, at least to the full extent that it could be given the language used by the Supreme Court. Nevertheless, the Board of Patent Appeals has said that their reading of KSR is that “obvious to try” is now a valid rejection. It is hard to argue with the Board’s interpretation, although previously “obvious to try” was time and time again said to be a standard that was not the law and a standard that made no sense. With the Patent Office facing extreme backlogs and more than 1.2 million pending patent applications at the end of fiscal year 2008 it can be anticipated that there will be a push to increasingly rely on KSR rejections as the new PTO administration attempts to wrestle with the current patent crisis.
Amending 103 to fix this problem would really be quite simple in reality. The last sentence of 103(a), which the Supreme Court obviously did not read during its consideration of the KSR matter, already says: “Patentability shall not be negatived by the manner in which the invention was made.” One way to modify Section 103 to affect this purpose would be to simply underline that sentence, and perhaps add the parenthetical expression “(we really mean it!)” thereafter. Seriously though, the proper way to amend Section 103 would be to simply add to this last sentence of 103 as follows: “Patentability shall not be negatived by the manner in which the invention was made, and an invention shall be deemed to be obvious only where there is a teaching, suggestion or motivation within the prior art to combine references.” By doing this the Federal Circuit law would be embraced, KSR would be mooted and we would once again have an objective standard rather than a standard based on “common sense.”
3. Codify What Constitutes Unauthorized Practice of Law
Shockingly the Patent & Trademark Office refuses to enforce 37 CFR 11.5(b), which defines prohibited representation practices before the USPTO. The Office refuses to enforce Rule 11.5(b) because they do not feel they have the authority to prevent non-attorneys from representing applications in patent and/or trademark matters. It is ridiculous to have a Rule that the Office will not enforce, particularly when the Office requires those who they recognize as patent attorneys and patent agents to take a Patent Bar Examination. The Patent Office turning the other way is why the invention submission scam has cost independent inventors $300 million annually due to invention scams and fraud. This is an issue that should be easy to reform in Congress given it is unthinkable that any member of Congress or any lobby would have a problem really putting the invention submission industry out of business.
Additionally, unauthorized practice of law is even more widespread on the Trademark Office side of the building. It is impossible to do any search on any search engine for trademarks or trademark applications without finding one of the many large corporations proclaiming that they can file trademark applications for less than law firms and attorneys. LegalZoom.com even proudly proclaims that they file more trademark applications on an annual basis than the top 5 law firms combined. These entities are engaging in the unauthorized practice of law under Rule 11.5(b) and the USPTO is doing nothing to stop them. Either Rule 11.5(b) needs to be removed, the Patent Office needs to drop the requirement that only patent attorneys can represent inventors, the Trademark Office needs to drop the requirement that only attorneys can represent business owners in trademark matters, or Congress needs to force this agency to police itself.
By the way, where are the AIPLA, the ABA, State Bar Associations and the many local Intellectual Property Bar Associations? Newsflash, your members are losing significant business and no one is doing anything about it. It is time for Bar Associations to start representing those who are members. Even if no one wants to protect the public, which really ought to be the motivation here, Bar Associations need to protect members and get involved! For more see Sadly, Invention Submission is Alive and Well.
4. Patent Office Ombudsman
Government Officials seem to be in love with the idea of a Czar for everything. We will soon have an Auto Czar, we have a National Security Czar, and I think we ought to have a Patent Czar that takes the form of an Ombudsman. Given that the Patent Office leadership seems to so frequently lack knowledge in the area of patent practice and procedure, and given that Congress and other politicians presumably listen to these perhaps well meaning yet uninformed officials, what is really needed is an independent and knowledgeable Ombudsman-type that can comment on everything that goes on in the Patent Office. Any time that the Patent Office sends anything to Congress, anything up through the Department of Commerce or to the Office of Management and Budget a report from the Ombudsman would accompany the Patent Office information. Similarly, any time legislation is proposed that impacts innovation and/or the Patent System the Ombudsman would create an independent informational report. Of course, this Ombudsman should be required by law to be a patent attorney with a certain number of years experience. Not that this will solve the problems, but at least those who care in government could become informed of the real ramifications of their decisions should they be so inclined to listen.
5. Move to Regional Patent Offices
As only the federal government could do, they built a brand new Patent Office building that wasn’t large enough even as of the day it opened. As sad as that is it presents opportunities. The main corporate headquarters for the Patent Office stays in the Washington, DC area, and rather than the stay at home work program, which has Examiners conducting interviews with barking dogs and whining children in the background, we move to regional Patent Offices. This has enormous benefit for multiple reasons, but first and foremost is the ability to hire more people with better skills. Let’s face it, there are only so many adequately trained and educated people who are willing to live within commuting distance of Alexandria, Virginia. The price of living and the traffic alone make choosing a career as an Examiner exceedingly difficult these days even though Examiners are paid extremely well by government standards. Additionally, by locating Patent Office strategically around the country Uncle Sam could actually participate in the revitalization of certain communities, which ought to fit right in with the Obama agenda and stimulus packages that Congress will consider later this winter.
6. Legislatively Mandate that PTO Leaders be Patent Attorneys
Unfortunately, the United States Federal District Court for the District of Columbia decided in 2008 that 35 U.S.C. 3was nothing more than an aspiration when it decided that the challenge to the appointment of Margaret Peterlin was dead on arrival despite the fact that she had no relevant experience. In effect the District Court ruled that the fact that the Director and Deputy are to have “experience” is not something that can be enforced because the standard is too vague for court review. With that in mind, Congress should amend 35 U.S.C. 3 to mandate that the Director, Deputy Director and Commissioner, at a minimum, all have a certain number of years of patent experience prior to being eligible for appointment to the Office. Section 3 needs to have a definite and concrete definition with respect to the experience that is appropriate so that district courts can determine whether an appointment is appropriate. The Patent Office can no longer function with politically expedient appointments for those who are looking to stay in government employment. The Patent Office needs top level leadership that understand the patent system and innovation. If we can require that the President be born a U.S. citizen and needs to be at least 35 years old we should be able to tighten up this statute to make sure that people running the Patent Office are actually competent and knowledgeable.
7. Legislatively Create a Non-examined Patent
Congress should enact a new patent right that is based on registration, not examination. This non-examined patent should not be entitled to the presumption of validity, or perhaps is entitled to a shallow presumption of validity (i.e., preponderance of the evidence standard). Those inventions that are likely not to be commercially viable will find themselves being subject to registration rather than examination, thereby opening up examining resources to allow Examiners more time to adequately examine those “real” inventions that are seeking the presumption (or higher presumption) that attaches to the examined patent. This more than anything will help solve the crisis created by an ever increasing backlog of unexamined applications. It will also allow the Patent Office to provide more time per application for examiners to review those applications seeking a presumptively valid patent. This will cut down on the number of questionable examined patents that issue, which ought to have extremely positive effects on cutting down on the so-called patent troll problem because those patents that issue through examination will be of a higher quality across the board. Another extremely positive aspect of this is that it would be revenue neutral and have absolutely no impact on the Patent Office budget. Fewer examiners would be able to do more work, and the work done would be of a higher quality.
While we believe that each of these suggestions have merit, we believe suggestions #2, #4, #5, and #7 would go a long way in fixing the U.S. patent system. We also heartily agree with Gene’s suggestion #7. See a recent related AT! post here, in which we propose that Congress enact a U.S. utility model law, for example.
Maybe it is time for patent practitioners to rise to the occasion and educate our respective Senators and Representatives about what will constitute meaningful reform to the patent system. The lobbyists certainly are not pushing effective reform ideas. Any thoughts or further suggestions from our readers? Comments are welcomed.
Various commentators are posting today that a vote on the Patent Reform Act of 2007 may be slipping now to April at the earliest. (See IAM Blog and the Patent Prospector). The PLI Blog’s sources indicate that such a delay could likely mean no action will be taken on patent reform this year.
Others have taken notice of an editorial in this morning’s Washington Times, titled Meaningful Patent Reform, in which Senators Leahy and Hatch bemoan that “some would like to play political football with the [patent reform] bill to pursue other agendas.” (See PTP and Patently-O). The outlook of the Senators, however, is optimistic:
As legislators, we know we are headed in the right direction when everyone is complaining that the entire bill is not going their way. We see this as a necessary, albeit somewhat difficult, part of the legislative process. But we welcome it. But at the end of day, we are confident that we will resolve the remaining issues in ways that should make everyone comfortable and will ensure final passage.
Over a dozen labor unions sent a letter yesterday to members of the U.S. Senate urging opposition to the Patent Reform Act of 2007 in its current form. The letter expresses a deep concern over the likelihood that the Patent Reform Act of 2007 will undermine U.S. competitiveness. See a copy of the letter here: Fax from Unions on Patent Reform 2007.
The letter also highlighted a recent article written by Yongshun Cheng, a former Chinese judge in the high court of Beijing. Judge Cheng runs a non-profit organization dealing with intellectual property issues and has stated the following regarding S. 1145/H.R. 1908:
[I]n general the bill favors infringers and burdens patentees more. It is not bad news for developing countries which have lower technological development and relatively fewer patents. Due to the weak foundation of patents, the Chinese products often encounter trouble in the U.S. market. This bill will provide more mechanisms and flexibilities in making patent challenge strategies, and also lower the cost of infringement, therefore the infringement will become easier. . . .
The letter was signed by the following unions:
Building & Construction Trades Department (BCTD), AFL-CIO
Communications Workers of America (CWA)
Department for Professional Employees (DPE), AFL-CIO
International Association of Machinists and Aerospace Workers (IAM)
International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers & Helpers (IBB)
International Brotherhood of Teamsters (IBT)
International Federation of Professional and Technical Engineers (IFPTE)
International Union of Painters and Allied Trades (IUPAT)
Laborers’ International Union of North America (LIUNA)
Metal Trades Department, AFL-CIO
Patent Office Professional Association (POPA)
United Association of Plumbers and Pipe Fitters (UA)
United Steelworkers (USW)
Hat tip to the Patent Prospector.
A number of letters from companies, patent holders, and universities opposing the present Patent Reform Act of 2007 were sent to members of the U.S. Senate this week. Links to individual letters are found below, provided by the Innovation Alliance.
Letter to Senators Lamar Alexander and Bob Corker from 14 Tennessee manufacturers opposing patent reform.
Letter to Senator John Cornyn from 54 Texas employers and patent holders opposing patent reform.
Letter to Senators Arlen Specter and Robert P. Casey from 29 Pennsylvania manufacturers opposing patent reform.
Letter to Senators Mitch McConnell and Jim Bunning from 51 Kentucky companies and universities opposing patent reform.
Letter to Senators Harry Reid and John Ensign from 19 Nevada companies opposed to patent reform.
Letter to Senator Kay Bailey Hutchison from 54 Texas employers and patent holders opposing patent reform.
Letter to Senators John McCain and Jon Kyl from 28 Arizona employers opposing patent reform.
Letter to Senator Wayne Allard from 33 Colorado companies opposing patent reform.
Letter to Senators Saxby Chambliss and Johnny Isakson from 10 Georgia employers opposing patent reform.
Considering the likelihood that we may actually see the Patent Reform Act of 2007 become a legal reality this year, this post highlights initiatives in the bills presently before Congress that may be of particular interest to patent prosecutors. Much of the following information may also be found in the CRS Report and the Senate Committee Draft Report previously commented on by the AT!.
In an effort to harmonize U.S. law with the rest of the world, the U.S. would shift to a “first-inventor-to-file” from the present “first-to-invent” system in determining which individual has a right to a patent on an invention. Under the “first-inventor-to file” system, an inventor who first files an application at the patent office will be presumptively entitled to the patent. Unlike the present “first-to-invent” system, whether the first applicant was actually the first individual to complete the invention in the field will be irrelevant.
The shift will also eliminate “interference” proceedings. Interferences are complex and costly administrative proceedings that, although not commonly used, allow the Patent Office to determine the true first inventor of a contested invention.
Notably, the “first-inventor-to-file” system will still prohibit derivation where one individual copies another individual’s invention and then races to the patent office to file first. To prevent individuals from obtaining patents on inventions obtained by derivation, both bills provide for an “inventor’s rights contest” that will allow the Patent Office to determine which applicant is entitled to a patent on a particular invention.
One-Year Grace Period:
Under current U.S. law, a public disclosure of an invention, such as a public use, sale, or publication thereof, starts a one-year clock running in which an inventor must file a patent application or the invention is dedicated to the public domain.
According to the present bills, and potentially contingent upon a reciprocal change to European and Japanese patent laws, disclosures will qualify as prior art if they were made by 1) the inventor more than one year before the patent application’s filing date; or 2) a third party prior to the filing date and prior to the inventor’s disclosure. Thus, an inventor would still be protected from losing a right to a patent by the inventor’s own disclosure. However, the grace period would not protected the inventor from an earlier disclosure of a third party.
Presently, only an inventor may make an application for a patent. An inventor is also required to declare by appropriate oath or declaration that he or she is the “original and first inventor”. The proposed S.1145 initiative allows, however, that a “person to whom the inventor has assigned or is under an obligation to assign the invention may make an application for patent.” Thus, an assignee-company would be able to file a patent application on behalf of an inventor-employee having an obligation to assign to the company.
Post issuance review of an issued U.S. patent is currently conducted by reexamination proceedings (available both in ex parte and inter partes types). To initiate a reexamination, any individual may cite art that raises a new and substantial question of patentability with respect to the issued patent. For a variety of reasons not discussed here, however, reexamination proceedings have been sparingly used.
The present bills would provide a “post-grant review” proceeding that would begin, for example, within 12 months of the date the patent was issued. The proceeding would give the patent owner an opportunity to amend to overcome any issues raised. Importantly, a decision from the Patent Office would be required within one year of commencement of the review, and any patent left standing would be protected from a reassertion in other legal proceedings of the issues raised during post-grant review.
Most patent applications presently publish 18 months after filing, although an applicant may decide to opt out of publication as long as the applicant certifies that the invention will not be the subject of a foreign patent application. The House and Senate bills would eliminate a possibility of opting out of pre-grant publication.
Pre-Issuance Art Submission:
Under the current law, a protest may be filed by any member of the public against a pending application under certain, and very narrow, circumstances (i.e., prior to the first of the date the application was published or the mailing of a notice of allowance). Under the proposed initiatives, any person would be able to submit patent documents and other printed publications to the Patent Office within the later of 1) an issuance of a notice of allowance, or 2) six months after pre-grant publication or the rejection of any claim in the application. The submission would have to include a concise description of the relevance of each submitted document.
Tax Planning Method Patents:
Under the House proposal, tax planning method patents would be banned. See the previous AT! post on tax-related patents here.
Mandatory Search Reports (aka Applicant Self-Examination):
Applicants are presently under a duty of disclosure to the Patent Office to indicate any art of which they are aware that may be material to patentability. See a previous AT! article on the duty of disclosure here.
The Senate bill would also require that “applicants submit a search report and other information and analysis relevant to patentability”. As compliance with this requirement would be costly (not even to mention the potential for inequitable conduct ramifications), an applicant would be exempted if it would qualify as a “micro-entity”. This determination would be based on an enumerated list of factors including: income level; number of patent applications filed; small entity status; and assignment activity.
See the previous AT! article on inequitable conduct here.
The H.R. 1908 bill would provide that a holding of inequitable conduct is appropriate only if the patentee, its agents, or another person with a duty of disclosure to the USPTO intentionally misrepresents or fails to disclose material information, such that the USPTO would “have made a prima facie finding of unpatentability.” S. 1145 would provide that information is material if it is not cumulative to evidence already before the Examiner, and “a reasonable patent examiner would consider such information important in deciding whether to allow the patent application.” The standard for proving inequitable conduct would be set at “clear and convincing”.
USPTO Rulemaking Authority:
The Patent Office is currently limit to establishing regulations that govern the conduct of proceedings before it, and the recognition and conduct of patent attorneys. The Senate bill would further grant the authority to “set or adjust by rule any fee established or charged by the Office”. The House bill would authorize the Patent Office to “promulgate regulations to ensure the quality and timeliness of applications and their examination”. The language of the House bill could greatly affect the Patent Office’s proposed claims and continuations rules presently being litigated, and that have been enjoined from becoming effective pending the outcome of the litigation. See AT! post on the claims and continuations rules here, here, and here.
JW Note: We would be greatly interested in hearing about the concerns of our practitioner-readers relating to the legislation. Leave your comments as you may!