Yesterday, the House Judiciary Committee held a hearing on the “Innovation Act,” HR 3309, a bill sponsored by the Chairman of the House Judiciary Committee and co-sponsored by 10 other Members from both sides of the aisle, including the Chairman of the IP Subcommittee.
The hearing focused on the effect the Innovation Act would have on the problem of abusive litigation practices and on the patent system as a whole. Three central themes emerged from the hearing: 1) there is an urgent need to fully fund the PTO; 2) significant skepticism remains about expansion of the Covered Business Method (“CBM”) program; and 3) some of the more technical aspects of the Innovation Act would help rid the patent system of expensive and wasteful lawsuits. Divergence of opinion remained among the Members, however, about whether Congress should address fee shifting at this time or wait for the Supreme Court to hear the two fee shifting cases before it, although the witnesses agreed that legislation on fee shifting would be helpful, and Congress should proceed with legislation on this front.
Note when reading the report below that the “Innovation Act,” HR 3309, is different than the “Innovation Protection Act,” HR 3349. The Innovation Act is the patent litigation reform measure introduced by House Judiciary Committee Goodlatte and others. The Innovation Protection Act is the PTO funding bill introduced by House Judiciary Committee Ranking Member Conyers and others.
EDITOR’S NOTE: What follows is a summary of the Goodlatte patent bill created by American Continental Group, which is a government affairs and strategic consulting firm in Washington, DC. Manus Cooney, a former Chief Counsel of the Senate Judiciary Committee is one of the partners at ACG, and is also frequent guest contributor on IPWatchdog.com. Cooney and his partners and associates worked to prepare this summary, which was described as a team effort. It is republished here with permission.
Manus Cooney, ACG
Sec. 3. Patent Infringement Actions
Pleading Requirements (p.2)
Amends Title 35 to establish heightened pleading requirements for patent infringement actions. A party alleging infringement must include in the pleading, unless the information is not reasonably accessible, the following:
Each patent allegedly infringed and each claim of each patent that is allegedly infringed
For each claim, which product, feature, method or process are allegedly infringed, including the name or model number; where each element of the claim is fount within the accused product/method; and how the terms of the asserted claim correspond to the functionality of the accused product/method.
Whether each element is infringed literally or under the doctrine of equivalents
A description of the direct infringement, the acts of the alleged indirect infringement that contribute to or are inducing direct infringement
A description of the right of the party alleging infringement to assert each patent identified and patent claim identified
A description of the principal business of the party alleging infringement
A list of each complaint filed, of which the party alleging infringement has knowledge, that asserts or asserted any of the patents identified
Whether each patent is subject to any licensing term or pricing commitments through any agency or standard-setting body
Even though the USPTO is funded solely by patent user fees, the sequester requires cuts of nearly $150 million in the agency’s funding. Without a legislative remedy, the shortfall effectively stops the agency from opening new, highly anticipated regional patent offices across the country, including one located in Silicon Valley. See USPTO Announces Satellite Office Locations. Not surprisingly, each of the sponsors of the bill represent districts in Northern California in the greater San Jose area, which explains their keen interest in the opening of the Silicon Valley satellite Patent Office location. Honda represents the 17th District, Lofgren represents the 19th District and Eshoo represents the 18th District.
The PATENT Jobs Act would enable USPTO to access the fee revenue sequestered in Fiscal Year 2013, which would otherwise sit unused and untouchable, and would add the USPTO to the list of agencies exempt from sequestration orders. This is not a new budgetary concept. Congress has recognized the uniqueness of user-fee-funded agencies in the past, exempting them from sequestration in the Statutory Pay-As-You-Go Act of 2010. The legislation follows a bipartisan letter sent earlier this week by members of the California delegation to the Commerce, Justice, and Science Appropriations Subcommittee asking for a remedy.
Senator Ron Wyden (D- OR) is a man with an idea for lowering health care costs. Unfortunately, it’s an idea which proved disastrous the last time it was forced on the National Institutes of Health. But that hasn’t dissuaded the Senator from trotting it out again. He believes if a company commercializes a new drug whose development is in some way relatedto a cooperative R&D agreement (CRADA) it had at one time with NIH, that the government can then insure “a reasonable relationship between the pricing of a licensed product, the public investment in that product, and the health and safety needs of the public.”
Sen. Wyden seems sincere in his concern with the ever escalating costs of medicine. Unfortunately, his proposed solution empowering the government bureaucracy to second guess industry drug pricing decisions simply because they worked with NIH would make things worse. We could see fewer new drugs at any price. We may see more research shifted to India and China as our public research institutions are viewed as unreliable partners. And we may throw away a key strategic advantage of the hard pressed U.S. life science industry—its ability to draw on the unparalleled resources and expertise in our federal laboratory and university research systems.
If this path is chosen, we have fair warning of the hazards. We’ve been down it before.
On December 18, 2012, the House of Representatives passed the AIA technical amendments bill by a vote of 308 to 89. Here is the link to the bill as passed.
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During the last six days of a session the Speaker of the House of Representatives is allowed to suspend Rules in order to expeditiously dispose of non-controversial matters quickly before the end of a session. See Suspension of the Rules.
This year there will be several intellectual property bills that will move under suspension of House Rules on Tuesday afternoon, December 18, 2012. One is a substitute version of HR 6621, the America Invents Act (AIA) technical corrections bill.
Section 1(m) has been amended to include a PTO study in lieu of the original pre-GATT provision.
For a better part of the past year, there has been talk about the possibility of Congress moving a technical corrections bill to fix some “errors” within the America Invents Act (AIA). The AIA was signed into law on September 16, 2011 and contains, as most major pieces of legislation do, some minor drafting errors. On Friday, November, 30, 2012, a bill making technical changes to the AIA was introduced in the House of Representatives. The bill number is HR 6621. The proposed AIA package does NOT include a so-called “fix” to post-grant review that some considered to be substantive and not technical.
To rewind: Earlier this year, there had been some behind the scenes discussions on Capitol Hill about possibly modifying the AIA’s PGR estoppel provisions in a way that would have been problematic to patent owners. The discussed change would have removed from the AIA the “could have raised” estoppel standard. Concerns about weakening the PGR estoppels provisions as part of a ‘technical” package were communicated by members of the Innovation Alliance, university, inventor, and venture capital communities.
Fast forward to today: The bill does not contain the troubling PGR “fix.” Key staff on the Hill believe the measure to be non-controversial. House passage of the measure could take place before year’s end. What follows is the text of a draft section-by-section analysis of what was expected to be in the introduced AIA package of fixes.
Manus Cooney, former Chief Counsel to the Senate Judiciary Committee and a prominent DC lobbyist.
Last week I published part 1 of my conversation with Manus Cooney, who is one of the preeminent intellectual property lobbyists in Washington, D.C. Cooney, a former Chief Counsel to the Senate Judiciary Committee, is currently a partner with American Continental Group and was intimately involved in lobbying Congress relative to the America Invents Act (AIA), primarily on behalf of his client Tessera Technologies, who aligned themselves with the Innovation Alliance.
In part 1 we discussed lobbying in general, shining some light on the process as a whole and explaining why it is unrealistic to expect you can enter the debate near the end and have any hope of affecting change. In part 2, which is reproduced below, we discuss the specifics of lobbying the AIA, as well as the fight against further erosion of patent rights. And you thought that patent reform was over. Sadly, the fight continues.
COONEY: Going back to the AIA, when it comes to passing legislation, it’s important to know how each of the Congressional bodies work. It may be an oversimplification but it is usually the case that whatever the House Majority Leadership wants to pass, it usually gets done. In the Senate, however, it’s different because of its rules. There, whatever the Majority wants to pass has a shot at getting done. In other words, if the House Leadership, the Republicans in this case today, and the Chairman of the Committee want to see a particular measure passed, more often than not, particularly on an issue as esoteric and complex as patent law, the party members of the majority party are going to adhere or defer to the wishes of Leadership, And as a result, you’re trying to either create a situation in advance of the House measure coming to the floor where you have the support of the Leadership or you have created an environment where it’s less certain to the House Leadership and the Chairman that they will in fact be able to prevail, and thereby create an environment where they have to negotiate. Oftentimes in the House, your laying the foundation for a fight in the Senate where there is less deference to the Leadership. The rules are such that, in theory, any Senator can offer an amendment to any bill at any time, and you have a better shot at winning on the merits, so to speak. That has a way of forcing consensus. So realizing that those tend to be the ground rules, the landscape you’re dealing with, you develop a strategy for your clients.
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