Senate and House Introduce New Patent Reform Legislation

    By Donald Zuhn --

In a joint press conference held earlier today, leaders from both the Senate and House announced the introduction of new patent reform legislation.  Appearing at the conference were Senator Patrick Leahy (D-VT), the Chairman of the Senate Judiciary Committee, Senator Orrin Hatch (R-UT), Representative John Conyers (D-MI), the Chairman of the House Judiciary Committee, and Representative Lamar Smith (R-TX) (at right, Sen. Hatch, Rep. Conyers, Sen. Leahy, and Rep. Smith).

In a statement made available on Sen. Leahy's website, the Senate and House bills were described as being "similar to bipartisan legislation introduced in the 110th Congress" (specifically, H.R. 1908, which the House passed in September of 2007, and S. 1145, which was removed from the Senate calendar last spring before reaching the floor for a vote).  Sen. Leahy's press release noted that it "ha[d] been more than 50 years since significant reforms were made to the nation's patent system," and asserted that the newly introduced Patent Reform Act of 2009 "makes needed updates to the system that will improve patent quality and increase certainty among parties in litigation."

At the press conference to announce the bills, Sen. Leahy said that:

Patent reform is ultimately about economic development.  It is about jobs, it is about innovation, and it is about consumers.  All benefit under a patent system that reduces unnecessary costs, removes inefficiencies, and holds true to the vision of our Founders that Congress should establish a national policy that promotes the progress of science and the useful arts.  This bill will establish a more efficient and streamlined patent system that will improve patent quality and limit unnecessary and counterproductive litigation costs, while making sure no party's access to court is denied.

Sen. Hatch hoped that the third time around for patent reform would be a charm.  He added that those working on the legislation "have listened to many of the concerns raised by stakeholders and have changed the legislative text accordingly."  Interestingly, he acknowledged that the leaders "agree that more work needs to be done on the damages and inequitable-conduct provisions," adding that he was confident that legislators would be able to "rely upon well-reasoned and persuasive case law, scholarship and other texts to achieve consensus on these two key provisions"."  Acknowledging that the damages provision of S. 1145 was "[p]erhaps the most hotly debated topic in the patent reform debate last Congress," Sen. Leahy stated that he was "prepared to continue the conversation and debate from the last Congress in order to find the best language we can."  Sen. Leahy also said that he would work with Sen. Hatch on the inequitable conduct provision (which has been removed from the new bill) "to address any statutory changes."

Rep. Conyers stated that he was looking forward to working with other legislators "to perfect this legislation to bring the reforms that are needed to ensure that the Unites States remains strong in protecting and enforcing the creations of our inventors."  Rep. Smith added that the country "cannot expect individuals or companies to drive innovation without protecting the creative ideas that generate profit," and that the new legislation "updates current law to better protect intellectual property and encourage invention."

The text of the Senate bill (S. 515), which has not yet been made available on THOMAS, can be obtained here.  The Senate bill was co-sponsored by Senators Chuck Schumer (D-NY), Mike Crapo (R-ID), Sheldon Whitehouse (D-RI), James Risch (R-ID), and Kirsten Gillibrand (D-NY).  According to Sen. Leahy's press release, S. 515 contains "significant changes" vis-à-vis S. 1145.  In particular, the new bill:

• Strikes the provision establishing an 18-month publication requirement;
• Strikes the provision establishing an Applicant Quality Submissions (AQS) requirement (due to what Sen. Hatch called "near uniform opposition from the patent community" about the provision), and "clarifies" that search and examination functions "are to be performed by the United States Government";
• Adopts the post-grant review approach of H.R. 1908 bill by expanding inter partes reexamination, rather than introducing a new post-grant review for second window challenges;
• Codifies the "objective recklessness" standard of In re Seagate;
• Strikes the provision limiting damages for lack of notice or marking;
• Strikes the provision allowing the USPTO to waive applicant deadlines for patent term extension applications;
• Strikes the Check 21 provision;
• Strikes the provision ending fee diversion; and
• Strikes the inequitable conduct provision added in Committee last Congress.

Sen. Leahy also announced that the Senate Judiciary Committee has scheduled a hearing, entitled "Patent Reform in the 111th Congress:  Legislation and Recent Court Decisions" on March 10th at 10:00 AM (Eastern).  A live webcast of the hearing will be broadcast on the Committee's website.

In response to the introduction of the new patent reform bills, the Biotechnology Industry Organization (BIO) released a statement noting that while the organization "continues to have concerns with some of the specific language in the bills introduced today," it recognizes that the introduction of the bills was "just the beginning of the legislative process."  BIO President and CEO Jim Greenwood noted that the group "continues to welcome improvements to the U.S. patent system, particularly those that increase patent quality, increase public participation, and provide additional resources to the Patent and Trademark Office (PTO)," and looked forward to working with legislators and other stakeholders "to achieve positive, meaningful, and consensus-oriented reforms to the patent system -- reforms that will further enhance patent quality and spur innovation and economic growth here at home."

In a statement posted on the Manufacturing Alliance on Patent Reform's (MAPP) website, the group asserted that the new legislation "includes language from last Congress that would seriously undermine our patent protections."  MAPP believed that "substantial improvements to the patent system are possible," and looked forward to "working with the Congress to make those improvements in ways that benefit all sectors of the American economy."  MAPP also pointed to a press release issued by Reps. Dan Manzullo (R-IL) and Mike Michaud (D-ME), in which the Congressmen contended that the new patent reform legislation "would actually weaken intellectual property protections for American manufacturers and put hundreds of thousands more Americans on the unemployment lines."  Citing a recent MAPP economic study (see "Manufacturing Alliance on Patent Policy: Apportionment of Damages Provision Will Have Adverse Effects"), Reps. Manzullo and Michaud assert that "[b]y diminishing the damage awards in patent infringement cases, this bill would encourage intellectual property theft by foreign competitors, putting 298,000 American manufacturing jobs at risk and curtailing U.S. research and development spending by $66 billion."  The statement argues that Congress' efforts would be better spent "tackl[ing] consensus issues like Patent and Trademark Office efficiency, patent pendency and patent quality."

Patent Docs intends to provide additional coverage of the new bills, with an emphasis on their impact on biotech and pharma patent practice, after we have had a chance to analyze and compare the bills, and compare the new bills with previously introduced legislation.

For additional information regarding this topic, please see:

• Sen. Hatch's press release, which includes his complete remarks in introducing the bill.

Comments

[EG]

Don,

I mentioned the introduction of this new version of so-called "patent law reform" to Kevin yesterday. This new version is not as bad as the old version (e.g., no AQSs and no "substantive rulemaking" authority for the USPTO), but it also does nothing to address the inequitable conduct standard. Overall, this new version is still tilted in favor of the corporate Goliahs in the computer/IT area (aka the so-called Coaltion for Patent Fairness, which is an oxymoronic title for this organization) and against the Davids of Innovation. As far as I'm concerned, the supporters of this bill are the bought and paid for henchman of the CFPF, so this new version is already "red flagged" and has troublesome implications for American jobs specifically and American global competitivenss generally. That's my 2 cents.

[who]

Last time there was a recession we responded with the Federal Circuit and stronger patents (1982) - why would weak patents help innovation?

[Gregory F. Peischl]

I want a provision for disabled American veterens mandating a $200 fee in full for a small entity filing electronicly with no more than three claims to receive a utility patent, and a %50 fee to advertise his invention in the patent office's Gazette for six months.