Source: https://www.fr.com/news/march-3-2009-updates/
Timestamp: 2018-12-16 04:03:45
Document Index: 433321865

Matched Legal Cases: ['§ 100', '§ 102', '§ 103', '§ 1400', '§ 1391', '§ 41', '§ 102']

Patent Reform Updates | Fish & Richardson
March 3, 2009 Updates
For the Conyers Patent Reform Bill click here.
For the Leahy-Hatch Patent Reform Act of 2009 Section-by-Section Summary, click here.
For the Patent Reform Act of 2009 Bill click here.
Senate Bill Section-By-Section Summary
Leahy, Hatch, Conyers, Smith Introduce Bipartisan, Bicameral Patent Reform LegislationWASHINGTON (Tuesday, March 3, 2009) – Leaders of the Senate and House Judiciary Committees introduced bipartisan, bicameral patent reform legislation Tuesday.
Hatch said, “I have always said that the patent reform bill would be a multi-Congress endeavor. Today’s introduction signals the third and what I hope will be the final round. If we are to continue to lead the globe in innovation and production, we must have an efficient and streamlined patent system. For those who might say nothing has changed, I can attest that it has. Just look at the bill. We have listened to many of the concerns raised by stakeholders and have changed the legislative text accordingly. We all agree that more work needs to be done on the damages and inequitable-conduct provisions. I am confident we can rely upon well-reasoned and persuasive case law, scholarship and other texts to achieve consensus on these two key provisions. Now is the time for patent reform.”
Smith said, “Part of stimulating the American economy means encouraging growth in industries that are job generators. IP industries provide millions of Americans with well-paying jobs and are critical to restoring American prosperity. But we cannot expect individuals or companies to drive innovation without protecting the creative ideas that generate profit. The Patent Reform Act updates current law to better protect intellectual property and encourage invention. All businesses, small and large, will benefit from this bill.” The Senate Judiciary Committee is scheduled to hold a hearing on “Patent Reform in the 111th Congress: Legislation and Recent Court Decisions” on Tuesday, March 10. The hearing will be webcast live online (http://judiciary.senate.gov/).
Patent Reform Act of 2009 Senate Bill Section-By-Section Summary
For Background Sec. 1. Short title; table of contents
In general. The United States stands alone among industrialized Nations that grant patents in not using an objective standard for giving priority to a patent application. The result is a lack of international consistency, and a complex and costly system in the United States to determine inventors’ rights. The United States Patent Office (“USPTO”) currently uses an interference proceeding to determine which party was first to “invent” the claimed invention, where competing claims arise. The determination is intensely fact-specific and costly to resolve. By contrast, a first-to-file system injects needed clarity and certainty into the system. This section converts the United States’ patent system into a first-inventor-to-file system, giving priority to the earlier-filed application for a claimed invention. Interference proceedings are replaced with a derivation proceeding to determine whether the applicant of an earlier-filed application was not the proper applicant for the claimed invention – such a proceeding will be faster and less expensive than were interference proceedings. This section also encourages the sharing of information by providing a grace period for publicly disclosing the subject matter of the claimed invention, without losing priority. Specifically, this section makes the following amendments:
Subsection (a) – § 100 is amended to include definitions for additional terms. Subsections (b) & (c) – § 102 is replaced and § 103 is amended, as follows. A patent may not issue for a claimed invention if the invention was patented, described in printed material, or otherwise available to the public (1) more than a year before the filing date or (2) anytime prior to the filing date if not through disclosure by the inventor or joint inventor.
Subsection (k)-Clarifies that examination and search functions are inherently governmental and shall be performed by employees of the United States Government.
In general.– The section streamlines the requirement that the inventor submit an oath as part of a patent application, and makes it easier for patent owners to file applications.
Relationship of Damages to the Inventive Feature.– The measure of damages for infringement can be either (i) profits lost by the patent holder because of the infringement (“lost profits”), or (ii) “not less than a reasonable royalty.” There has not been any concern expressed with current determinations of lost profits, and therefore the bill does not alter the law governing those determinations.
This section preserves the current rule that mandates that a damages award shall not be less than a “reasonable royalty” for the infringed patent, and further requires the court to conduct an analysis to ensure that, when a “reasonable royalty” is the award, it reflects the economic value of the patent’s “specific contribution over the prior art”, i.e. the contribution the invention makes to promoting science and the useful arts per the requirement of Article I, Section 8 of the Constitution. The court also is required to identify the factors that will be considered in determining a reasonable royalty, ensuring that the record is clear on what considerations the judge or jury assessed in awarding damages. The court must also consider any non-exclusive marketplace licensing of the invention, if there is such a history, in determining a reasonable royalty. Finally, the court is instructed to consider any other relevant factor, which is included to ensure that the significant body of judge-made law on the topic of damages awards in infringement cases is preserved to the extent not affected by the provision. The bill also preserves the entire market value rule. Willful infringement.– A willful infringer of a patent is liable for treble damages. The current definition of willful infringement, however, perversely discourages parties from reviewing issued patents to determine whether a patent exists.
This section codifies the Federal Circuit’s recent In re Seagate decision, in which it reversed its 20-year old precedent regarding the standard to prove willfulness. Courts will now require a plaintiff to demonstrate with clear and convincing evidence that the infringer acted in a manner that was objectively reckless, which is also subject to a good faith defense. Prior User Rights.— Subsections (b) & (c) relate to the prior user right defense to infringement. Under current law, “prior user rights” may offer a defense to patent infringement in certain limited circumstances, including when the patent in question is a “business method patent” and when someone invents and uses the invention, but never files a patent application for it. If the same invention is later patented by another party, the prior user may not be liable for infringement to the new patent holder, although all others will be. This section permits the defense to be used by entities controlling or controlled by the prior user. It also requires the Director to issue a report to Congress on the prior user right defense to infringement.
In general.– After a patent issues, a party seeking to challenge the validity and enforceability of the patent has two avenues under current law: a reexamination proceeding at the USPTO or litigation in federal district court. The former is used sparingly and is considered not very effective; the latter, district court litigation, is unwieldy and expensive. This section improves the inter partes reexamination system at the USPTO and creates a new administrative post-grant review for challenges to patents within 12 months of the patent’s issue or reissue.
In general.– This section addresses two litigation issues unique to the patent world. Subsection (a) deals with venue. A venue section specific to patent infringement cases exists in 28 U.S.C. § 1400(b). A change in the general venue provision, 28 U.S.C. § 1391, was later read by the courts to apply to the patent venue provision. The result has been forum shopping, which this subsection addresses. Subsection (b) makes patent litigation more efficient by providing the Federal Circuit jurisdiction over interlocutory orders in what have become known as Markman orders, in which the district court construes claims of a patent. The contours of the claim are crucial to resolution of the patent litigation, and authorizing interlocutory appeals will add predictability at an earlier stage of litigation. Civil actions for patent infringement, including declaratory judgment actions, may only be brought in a judicial district (1) where the defendant has its principal place of business or is incorporated or formed, or, for a foreign corporation with a U.S. subsidiary, where its primary United States subsidiary has its principal place of business or is incorporated or formed; (2) where the defendant has committed substantial acts of infringement and has a regular and established physical facility that the defendant controls and that constitutes a substantial portion of the operations of the defendant; (3) where the primary plaintiff resides, if the primary plaintiff in the action is an institution of higher education or a nonprofit patent and licensing organization (as those terms are defined in this section); (4) where the plaintiff resides, if the sole plaintiff in the action is an individual inventor who qualifies as a “micro-entity” pursuant to section 123 of title 35. A defendant may request the case be transferred where (1) any of the parties has substantial evidence or witnesses that otherwise would present considerable evidentiary burdens to the defendant if such transfer were not granted, (2) transfer would not cause undue hardship to the plaintiff, and (3) venue would be otherwise appropriate under section 1391 of title 28.
This section gives the director rulemaking authority to set or adjust any fee under §§ 41 and 376, and section 1113 of title 15, provided that such fee amounts are set to reasonably compensate the USPTO for the services performed. The Director may also reduce such fees. The Director shall consult with the patent and trademark advisory committees as provided for in this section. Any proposal for a change in fees (including the rationale, purpose, and possible expectations or benefits that will result) shall be published in the Federal Register and shall seek public comment for a period of not less than 45 days. The Director shall notify Congress of any final proposed fee change and Congress shall have up to 45 days to consider and comment before any proposed fee change becomes effective. Rules of construction are provided.
Except as otherwise provided, this Act takes effect 12 months after the date of enactment and applies to any patent issued on or after that effective date. The enactment of § 102(b)(3), under section (2)(b) of this Act, is done with the same intent to promote joint research activities that was expressed in the CREATE Act (Cooperative Research and Technology Enhancement Act of 2004;Public Law 108-453; the “CREATE Act”), and shall be administered by the in the manner consistent with such.
Patent Reform Act of 2009 Significant Changes to the Judiciary Committee-Approved Bill