The US patent system has a storied history: written into the Constitution by Madison; the Patent Act itself written by Jefferson; and, requested to be passed in Washington’s first State of the Union speech. As a former speech writer for the Commissioner back in 1985, I had the fun task of finding little interesting factotums about the US patent system to add some flavor to whatever audience the Commissioner was addressing. Such facts might include: local inventors, known statewide innovative companies, or just interesting moments in the course of the system and its contribution to the development of the then brand new United States.
Some fun stuff: Abraham Lincoln reckoned that, along with the invention of the printing press and Columbus discovery of America, the US patent system was among the three most important events in the history of the world. Of the 4 faces on Mt. Rushmore, 3 are inventors (Roosevelt is the exception); but, only Lincoln got a patent. The British burned pretty much everything in Washington that mattered in 1812; except, the Patent Office, around which they placed a guard. And so it goes.
Why am I resorting to the emotional heart strings; because the current round of patent reform is an existential threat to the US patent system. If these proposals pass, we will be left with a very, very expensive registration system in which the Fortune 50, and no one else, will be able to participate. In case no one has noticed, the Fortune 50 do not innovate (with few exceptions, it is those who will become the Fortune 50 that do the innovating) and so, the system ceases to exist. Let me explain.
On Thursday, March 27, 2014, the Senate Judiciary Committee held another meeting on patent reform legislation. A markup of Senator Leahy’s bill (S. 1720, “Patent Transparency and Improvements Act”) may happen as early as this week. During Thursday’s meeting Senator Leahy, who Chairs the Committee, indicated a willingness to incorporate in his bill other provisions from Senator Cornyn’s and Senator Hatch’s bills.
Momentum is clearly building for more patent legislation, but the myriad bills and provisions make it difficult even for folks close to Capitol Hill to keep track of them all. To fill that need, today’s post is part of a series of articles based on the white paper, Patent Reform 2014. IPWatchdog.com has already published articles on Joinder of Interested Parties and Loser-Pays Fee-Shifting. Today’s focus is on the proposed FTC enforcement provisions found in several pending bills.
In September 2013, Senator Klobuchar’s staff circulated draft language that would require the FTC to initiate a rulemaking proceeding, in accordance with 5 U.S.C. §553, to prohibit the assertion or enforcement of patents in a manner that is an unfair method of competition, or unfair or deceptive act or practice, under section 5 of the Federal Trade Commission Act (15 U.S.C. 45).
Editorial Note: This article is a portion of a larger work byAndrew BaluchtitledPatent Reform 2014, modified here for purposes of publication on IPWatchdog.com. Baluch’s article is a comprehensive review of pending legislation developments in Congress, the Executive Branch, the Courts and the States.
Congressman Goodlatte, chief architect of patent reform in the House of Representatives.
Patent legislation currently pending in Congress contains several controversial provisions. One of those provisions, which finds both proponents and opponents, is the provision to mandate the joinder of “interested parties.”
Those in favor of moving the U.S. patent litigation system to a loser-pays fee-shifting regime are usually also in favor of mandatory joinder, so that fee awards against a losing patentee can be collected against the “true” entity that may be hiding behind the plaintiff patentee. Opponents of the rule point out that it could lead to unwilling and unnecessary joinder — a point raised particularly by universities and venture capitalists who fear they may be hauled into costly patent litigation against their will if their licensees/startups ever need to enforce their patent rights in court. Still others point to the fact that these joinder provisions would only apply to patent cases — and only against plaintiffs — and would thus create a litigation process unique to patents in district courts. Furthermore, district court judges would lose most of their existing broad discretion to determine whether the facts truly warrant joinder in each unique case.
Editorial Note: This article is a portion of a larger work by Andrew Baluch titled Patent Reform 2014, modified here for purposes of publication on IPWatchdog.com. Baluch’s article is a comprehensive review of pending legislation developments in Congress, the Executive Branch, the Courts and the States. For more specifically on fee-shifting please also see Will Fee Shifting Solve the Patent Troll Problem?
U.S. patent litigation has followed the centuries-old “American Rule” under which each party to a litigation pays its own legal fees and costs, regardless whether it wins or loses the litigation. A narrow exception exists in patent cases, but only in “exceptional cases” under 35 U.S.C. § 285, such as where the losing party engaged in litigation misconduct, or if the patent was fraudulently procured, or if the losing party raised arguments that were both objectively baseless and made in bad faith.
Despite the long tradition of litigants paying their own legal fees and costs, Congress has shown interest in changing the playing field and deviating from the American Rule in patent cases. This comes at a time when the U.S. Supreme Court is already considering two cases that relate to the definition of “exceptional cases” in § 285 that may well alter how this existing exception to the American Rule is applied in practice.
What follows is discussion of various legislative proposals relative to fee-shifting, as well as a brief discussion of the two cases currently pending before the Supreme Court.
EDITORIAL NOTE: The following article has been posted as an online petition you may sign by visiting IndependentInventorsofAmerica.org. On Friday the United States Senate held additional hearings and seem poised to act relatively quickly on the Senate version of patent reform. For information about how to directly contact your U.S. Senators please see Senators of the 113th Congress.
We represent independent inventors and small patent-based businesses across the country and we are against any patent legislation that includes provisions of the Innovation Act (H.R. 3309) and the many variations and additions under consideration in the Senate. This legislation will levy grave harm upon independent inventors and small patent-based businesses, as well as the investors we need to help commercialize new technologies and to protect our inventions.
The American patent system is a trade between an inventor and society. An inventor discloses an invention for all to see and build upon, and the government grants and protects for the inventor an exclusive right to the invention for a short period. The American patent system was intended to enable anyone, regardless of economic status, race or gender, to profit from the invention of something new and valuable. This system has worked as intended for over 200 years, fueling the creation of the greatest economy in the world.
If you are familiar with the politics of intellectual property as it is played out inside the beltway you undoubtedly already know Marla Grossman. Grossman is an attorney and partner with the American Continental Group, and her bio page says “she helps her clients with strategic public policy planning and representation before the White House, US federal agencies and the US Congress.” She is a lobbyist who seems to most typically represent clients with a pro-intellectual property position. Her client list is a virtual whose who of the elite entertainment industry.
Grossman is “a mover and a shaker” around DC. Everyone knows Marla, and she knows everyone. You can find her at virtually every IP related event in the Greater DC area, whether it is at the Library of Congress, the United States Patent and Trademark Office, AIPLA, a black-tie affair or other industry event. We have included her in our “insiders” series and in 2013 the National Law Journal referred to her as a “leading copyright attorney and lobbyist.” She is the real deal.
Perhaps the reason Grossman has become so sought after as a representative, particularly in the copyright and entertainment industries, is because of her time working on Capitol Hill. The 1990s saw a number of legislative issues of great importance thanks to the sudden growth of the World Wide Web. During this time, from 1997-1999, Grossman served as minority counsel to the US Senate Judiciary Committee, where she worked to develop policy positions and legislative initiatives for US Senate Patrick Leahy (D-VT), who now Chair’s the Senate Judiciary Committee. During her time working on Capitol Hill Grossman worked on a variety of intellectual property, Internet usage, entertainment, online gaming and technology issues for Senator Leahy, and was directly involved with major reforms including the Digital Millennium Copyright Act; Copyright Term Extension Act; Trademark Law Treaty Implementation Act; Domain Name Amendment Act; and US Patent and Trademark Office Reauthorization Act.
Phil Johnson (left) and Judge Michel (right) will be on the panel at this Sedona Conference. Shown here at the 2013 IPO Inventor of the Year ceremony.
Next Wednesday, The Sedona Conference will present a webinar that will take a look at an important, topical issue facing innovators – is legislative patent litigation reform necessary or can the Courts handle what some observe are abusive litigation tactics. On January 22, 2014, Patent Litigation Best Practices: A Matter for Congress or for Bench and Bar? will address the issue with an all-star faculty of leading practitioners in the field. The faculty includes former Federal Circuit Chief Judge Paul R. Michel, as well as current Federal Circuit Judge Kathleen O’Malley. Tina Chappell of Intel Corporation, Philip S. Johnson of Johnson & Johnson, and Alexander Rogers of Qualcomm will also offer their perspectives and insights as faculty members.
Patents and patent reform has been in the news, even the popular press, on an increasing basis. The issue of patents generally and patent litigation specifically has been the subject of intense debate over the last 8 years. Congress passed the America Invents Act (AIA) in 2011, with the bill being signed into law by President Obama on September 16, 2011. The overhaul of U.S. patent law was extraordinary, but not all of the parties involved were happy. Some thought the law went too far in some ways, others thought the law did not go far enough. Despite the AIA being the most significant change to patent laws since at least 1952, Congress is considering further reforms again, with the House of Representatives already passing the Innovation Act (HR 3309). Companion legislation in the Senate is likely to move forward during Q1 2014.
NOTE: This article is written by Steven J. Moore and with the assistance of Alan Gardner and Marvin Wachs, also of the Kelley Drye & Warren Patent Department.
At this time of year we often see many prognostications of what the future holds. From the prospective of the small entity patentee we see big changes in store particularly as some in Congress seem hell-bent on amending the patent statutes once more. These changes are being pushed through without any real consideration for the impact of the changes on patents held by universities, research institutes, small and medium sized companies, emerging companies, independent inventors and new entrepreneurs.
Our data analysis set forth in our article entitled America Invents Act – A Boon for David or Goliath, published as a two part series in iPWatchdog August 15, 2013, and the data we supply herein in regard to who is bearing the brunt of IPR petitions and institutions, suggest small patent entities are presently facing a daunting task to enforce patents in their patent portfolios against large competitors. In the former article, we compared pre-AIA administrative challenge procedures with post-AIA administrative challenge procedures to show how much more the post-AIA procedures were being used against small entity patent filers, and how the new post-AIA procedures were being used far less by small entities than the prior pre-AIA challenge procedures. We noted that the data did not allow one to subscribe this effect to more challenges against so-called NPEs post-AIA than pre-AIA.
How to Write a Patent Application is a must own for patent attorneys, patent agents and law students alike. A crucial hands-on resource that walks you through every aspect of preparing and filing a patent application, from working with an inventor to patent searches, preparing the patent application, drafting claims and more.
Without hesitation I recommend One Simple Idea and think it should be required reading for any motivated inventor. There is so much to like about the book and so much that I think author Stephen Key nails dead on accurate. The book is educational, information and inspirational. For the $14 cover price it is essential reading.
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