By Donald Zuhn --
At last month's Biotechnology Industry Organization (BIO) Intellectual Property Counsels' Committee (IPCC) conference, Q. Todd Dickinson, Executive Director of the American Intellectual Property Law Association (AIPLA), and E. Anthony Figg of Rothwell, Figg, Ernst & Manbeck, P.C. provided an update on the status of patent reform legislation in one of the conference's more interesting panel sessions. Interest in the topic, which would have been high on any other day, was elevated even more by the activities of the Senate Judiciary Committee back in D.C. These activities included the presentation of a number of amendments to S. 515 on the day prior to the panel session, and the scheduled discussion of S. 515 at the Committee's Executive Business Meeting, which took place at the same time as the panel session.
In the three weeks since the panel session took place, Senate Judiciary Committee Chairman Patrick Leahy (D-VT) has managed to get his bill voted out of Committee and placed on the Senate Legislative Calendar. However, as the patent reform debate readies for a move to the House, it is worth reviewing some of issues that were discussed at the IPCC panel session.
With regard to the first-inventor-to-file provision of S. 515, Mr. Dickinson (at left) predicted that the Senate version of the provision, in which Europe and Japan would not be required to reciprocate with a grace period, would win out. He added that the provision was desired by universities, where the "publish first and file second" mentality was prevalent. Mr. Figg noted that the provision, which caused a "raging debate" only 10-15 years ago, was now "surprisingly noncontroversial." He added that one argument against the House bill's "trigger" (adoption of a grace period) was that Congress should not give Europe and Japan veto power over the first-inventor-to-file provision, stating that if the provision would be good for the U.S., it should stay in the bill, and if it would not be good, it should be removed.
On inequitable conduct, the panelists noted that S. 515 did not include an inequitable conduct provision and that Senator Orrin Hatch (R-UT), who has been a champion of the topic, had not proposed an amendment to add such a provision to the bill. Mr. Dickinson noted that the AIPLA supported a "but for" test for finding inequitable conduct. Mr. Figg (at right), discussing the inequitable conduct provision in Senator Kyl's patent reform bill (S. 610), argued that the Patent Office had not demonstrated the capability to handle the administration proceedings created by that provision, and that the issue should remain with the courts. Mr. Dickinson predicted (correctly as it turns out) that the Kyl provision "didn't have legs," adding that he believed that by dropping inequitable conduct from the debate, anti-apportionment Senators were able to focus attention on the bill's damages provision. In this way, Senators who had been resistant to compromise on the damages issue were forced to consider a compromise (and, as we now know, reach a compromise).
The panelists next addressed Applicant Quality Subsmissions (AQSs), a topic that has often been paired with the discussion of inequitable conduct reform. While noting that S. 515 strikes the provision in last year's bill (S. 1145) that would have established an AQS requirement, the panelists opined that the Bush Administration's insistence on securing an AQS provision before resolving the inequitable conduct issue ultimately doomed that provision from making it into the present bill. Neither panelist, however, could offer any insights as to whether the current Administration would take the same stance on AQSs.
With respect to the willful infringement provision in S. 515, Mr. Figg noted that the ABA Section of IP Law Committee, of which he is a member, had not yet developed a position on the S. 515 provision, which codifies the objective recklessness standard of In re Seagate Technology, LLC. Mr. Dickinson speculated that those favoring codification of the Seagate standard may want to do so in order to prevent the Federal Circuit from "taking it away."
Having dispensed with the above issues, the panel moved to a discussion of three of the four big issues regarding patent reform: post-grant review, venue, and damages (with the fourth big issue, inequitable conduct reform, having been tabled by Congress this time around). With respect to post-grant review, the panel noted that while there was general support for a first window of review (i.e., challenges within 12 months of issuance), there had historically been much debate over the need for a second window (i.e., challenges from 12 months after issuance to expiration). As with several other proposed patent reform provisions, the debate pitted the IT industry, which the panel claimed deferred searches until "late in the game" and therefore wanted a second window of review, and the biotech/pharma industry, which needed stable patent assets (i.e., quiet title) in order to secure investment.
Since S. 515 forgoes a post-grant second window in favor of expanded inter partes reexamination, the panel turned its focus to the latter proceedings, and in particular, to the types of evidence that could be considered in determining whether a substantial new question of patentability affecting any patent claim had been raised. Mr. Figg noted that H.R. 1260, unlike S. 515, would allow third-party requesters to file for inter partes examination on the basis of "any prior art of documentary evidence cited under paragraph (1) or (3) of subsection (a) of section 301," where paragraph (1) specifies patents or printed publications, and paragraph (3) specifies "documentary evidence that the claimed invention was in substantial public use or on sale in the United States more than 1 year prior to the date of the application for patent in the United States." However, Mr. Figg argued that the meaning of "documentary" and "substantial" was unclear. Because S. 515 lacks paragraph (3), it is also unclear how the House and Senate would resolve this difference in their respective bills. Mr. Figg also argued that the USPTO lacked the capability to deal with some 1,000 opposition-like proceedings a year (and not just from the perspective of an increased workload). Mr. Dickinson disagreed, stating that ALJs were capable. The panelists completed their discussion of post-grant review by noting that the AIPLA supported the idea, the Coalition for 21st Century Patent Reform did not support the idea, and the ABA supported the idea (but not with a "wide open second window").
The panelists concluded by discussing the damages provisions of the bills, easily the most controversial part of the legislation and the reason why S. 1145 was pulled from the Senate calendar last spring. They acknowledged that there had been a move away from apportionment and towards a gatekeeper mechanism in which the judge determines which factors the jury may consider -- which, as we now know, was the compromise that allowed S. 515 to get voted out of Committee (the bill has now been placed on the Senate calendar). However, in a possible foreshadowing of future problems, Mr. Dickinson warned that the Senate Judiciary Committee's resolution of the damages issue may not sit well with the House, which was able to pass a bill containing an apportionment of damages clause in September 2007. Thus, the damages issue could rear its head once again as the House begins work on H.R. 1260, and in a reversal from last spring's experience with S. 1145, the House bill could fall victim to intense lobbying by the IT industry.
• "Senate "Patent Reform" Bill (S. 515) Voted out of Judiciary Committee," April 2, 2009
• "Some (But Not All) Amendments Introduced in 'Patent Reform' Bill," April 1, 2009
• "Senate Judiciary Committee Discusses S. 515 at Executive Business Meeting; Adopts "Technical" Amendment GRA09350," March 26, 2009
• "Senator Kyl Introduces Alternative to Leahy Patent Reform Bill," March 19, 2009
• "Senate and House Introduce New Patent Reform Legislation," March 3, 2009
• "Department of Commerce Sends Senators Second Letter on Patent Reform Bill," April 3, 2008
• "Patent 'Reform' Bill Passes House of Representatives," September 9, 2007