By Donald Zuhn --
Earlier today, the House Committee on the Judiciary heard testimony from seven witnesses (and accepted written testimony from other interested parties) regarding the House patent reform bill (H.R. 1260). Although the hearing was not made available for online viewing, written testimony from the witnesses who testified at the hearing can be downloaded at the Committee's website. In Part I of our report on the House patent reform hearing, we examine the written testimony submitted by two of the witnesses as well as testimony submitted by the Biotechnology Industry Organization (BIO).
In contrast with the Senate Judiciary Committee's March 10th hearing on patent reform, the House Judiciary Committee solicited testimony from representatives of two groups that had not been previously heard from: inventors and venture capitalists. Speaking on behalf of inventors was Dean Kamen (at left) of DEKA Research and Development Inc., the inventor of the Segway. In his written testimony, Mr. Kamen contends that "[s]ome of the provisions in H.R. 1260, the Patent Reform Act of 2009 -- including the reduction of damages awarded to a patent holder whose patent has been found infringed and the various expansions of post-grant review -- are very troubling." With respect to the damages provision, Mr. Kamen states that:
As for post-grant review, he argues that "the expansion of post-grant reviews proposed by H.R. 1260 would add uncertainty to the value and validity of patents (in some instances many years after those patents were granted), create further disincentives for patent holders and investors, and may open the system up abuse by potential infringers."
Mr. Kamen also calls for a permanent end to fee diversion and a reconsideration of the change from a first-to-invent system to a first-inventor-to-file system, contending that such a change "would create a rush to the patent office that would result in an increase in the number of poorly thought-out, lower quality patent applications," that "could unfairly disadvantage individual inventors, small and start-up companies, and universities, who may have smaller budgets and less access to patent professionals," as well as overburden the Patent Office.
Another new voice to the debate (at least amongst witnesses called to testify at the two Congressional patent reform hearings held this year) was that of venture capitalists. Representing this group, and the 460 venture firms of the National Venture Capital Association (NVCA), was Jack Lasersohn, a Partner with the Vertical Group. Like Mr. Kamen, Mr. Lasersohn's written testimony "focuses on two critical elements of patent reform proposals: the calculation of damages in patent infringement cases and the structure of post-grant review procedures." With respect to the damages provision, Mr. Lasersohn notes that "the venture capital community believes that the current methodology for calculating damages is appropriate and working, and that patentees are not systematically overcompensated." As a result, Mr. Lasersohn's group supports the gatekeeper language that replaced the apportionment of damages provision in the original version of the Senate bill (S. 515), and which was largely responsible for permitting the Senate bill to be voted out of Committee on April 2.
As for post-grant review, Mr. Lasersohn states that:
The venture capital community supports a limited, 12 month window after a patent is granted to allow time for challengers to file opposition. This single, finite post-grant window will serve to quickly weed out bad patents, but will not foster repeated challenges to patent validity nor introduce uncertainty into the patent system.
In addition, Mr. Lasersohn notes that the NVCA opposes expanding inter partes reexamination to include the use of "prior public use or sale," language that was removed from S. 515 but which remains in H.R. 1260, since "in this procedural setting patentees will be disadvantaged if such issues may be raised many years after a patent has granted."
As with the Senate Judiciary Committee's hearing on patent reform, interested members of the patent community could submit written statements for consideration by the House Judiciary Committee. One such member was the Biotechnology Industry Organization (BIO), which provided Patent Docs with a copy of its written testimony. In its statement, BIO observes that since the House Judiciary Committee last took up patent reform in an April 2007 hearing:
Among the patent reforms that BIO supports (some of which have made it into H.R. 1260, and some of which have not) are full funding of the USPTO by permanently ending fee diversion, an expansion of opportunities for members of the public to submit prior art during examination, a transition to a first-inventor-to-file system that incorporates an "appropriate 'grace period,'" willful infringement reforms that require litigants to first resolve validity and infringement before turning to willfulness, venue reforms that discourage forum-shopping, repeal of the best mode requirement, and restoration of the rebuttable presumption of irreparable harm and inadequacy of remedies at law when evaluating a patentee's request for a permanent injunction. BIO also "believes that [the inequitable conduct] doctrine should be abolished," and that "[t]he regulation of applicant conduct should be committed to the expert agency, the PTO."
Echoing statements in both Mr. Kamen's and Mr. Lasersohn's written testimony, BIO notes that it opposes post-grant review provisions that would broaden the grounds upon which a patent can be administratively challenged, and the House bill's apportionment of damages provision. With respect to these provisions, the industry group states:
Patent Docs will examine written testimony provided by the other witnesses, as well as reaction in the patent community to today's hearing, in subsequent posts.