Senator Kyl Introduces Alternative to Leahy Patent Reform Bill

    By Donald Zuhn --

Another day, another bill.  The 111th Congress has been on the job for a little more than ten weeks, but despite this short time span, legislators have already introduced seven bills that could significantly impact the life sciences sector if enacted.  Among the bills introduced this year are two concerning patent reform (S. 515 and H.R. 1260), two that would create a follow-on biologics regulatory pathway (H.R. 1427 and H.R. 1548), one that would restrict reverse payments (S 369), and two that would prohibit authorized generics (S. 501 and H.R. 573).

On Wednesday, Senator Jon Kyl (R-AZ) (at right) made it an even eight, when he introduced legislation (S. 610) that would amend Title 35 to provide for patent reform.  The bill, which currently lacks any co-sponsors, offers an alternative to Senator Patrick Leahy's patent reform bill (S. 515), which, along with its counterpart in the House (H.R. 1260), was introduced on March 3rd (see "Senate and House Introduce New Patent Reform Legislation").

The introduction of S. 610 was not unexpected, as Senator Kyl had introduced the bill during the last Congress (as S. 3600), and had promised to re-introduce the bill once the new session began (see "Senate Patent Reform Legislation -- One Old Bill and One New Bill").  In addition, the Arizona Senator had made his dissatisfaction with certain provisions of the Leahy bill fairly well known, most recently at the Senate Judiciary Committee's March 10th hearing on patent reform (see "Senate Judiciary Committee Holds Hearing on Patent Reform").  When Senator Kyl originally introduced the bill, his staff noted that it differed significantly from the Leahy bill, and had been the result of several meetings between Senator Kyl and critics of the Leahy bill -- including representatives from the pharmaceutical and life sciences industries (but not any members of the Coalition for Patent Fairness).

Among the provisions in Senator Kyl's new bill are:

• A first inventor to file provision that retains the one-year grace period for disclosures made by the inventor.

• A damages provision that essentially allows the court or jury to "consider any factors that are relevant to the determination of the amount of a reasonable royalty."  The damages provision also contains a gatekeeper subsection that permits the court to "identify for the record those factors that are supported by legally sufficient evidence, and shall instruct the jury to consider only those factors when determining the amount of a reasonable royalty."

• A post-grant review provision that establishes a first window in which a patent can be challenged within nine months of issuance on any condition for patentability, and a second window in which a patent can be challenged more than nine months after issuance as being anticipated or rendered obvious based on printed publications, patents, or patent applications.

• A provision allowing third-parties to submit patents, published patent applications, or other publications to the Patent Office for consideration during the examination of an application, as well as provide a description of the asserted relevance of the submitted art.

• A provision permitting the Patent Office to "offer incentives to applicants who submit a search report, a patentability analysis, or other information relevant to patentability," with such incentives to include "prosecution flexibility, modifications to requirements for adjustment of a patent term pursuant to section 154(b) of this title, or modifications to fees imposed pursuant to [the fee setting provision of the bill]."

• An inequitable conduct provision that removes final determinations of inequitable conduct from the courts, and instead requires the Director to promulgate regulations for "receiving and reviewing information indicating that parties to a matter or proceeding before the Office may have engaged in misconduct in connection with such matter or proceeding."  As with Senator Kyl's original bill, the new bill allows the Director to levy civil penalties of between $150,000 to $10,000,000 for findings of misconduct (with the top penalty reserved for findings of "exceptional" misconduct), and parties found responsible for misconduct may be jointly and severally liable for such penalties.

Patent Docs will provide additional discussion of the Leahy and Kyl bills in future posts.

In a related matter, at today's Executive Business Meeting of the Senate Judiciary Committee, discussion of S. 515 was held over until the March 26th meeting (see "Senate Judiciary Committee Places Patent Reform Bill on Agenda").

Comments

[EG]

Don,

The Kyl bill is still “bad news” in my opinion. The damages provision looks like an improvement over that in S.515/H.R.1260 in providing greater flexibility in the factors used to assess damages. But the post-grant review provision is worse than that in S.515/H.R.1260 by providing for an everlasting “second window” which in my opinion is a deal breaker. The next to last item looks like an effort to resurrect Applicant Quality Submissions (AQSs) in a more palatable form, but is still a very bad idea. The best that can be said for last item (inequitable conduct) is that it at least addresses this “plague,” but does so in a manner that is at least as draconian compared to the current state of the law and gives it to the body least able to deal with it (USPTO). The Kyl bill is still not “true” patent law reform by a long shot. Let it too sink with no survivors.