Posts Tagged: "Patent Reform"

This paper proposes amending 35 U.S.C. 271 Infringement of Patent with elements drawn from § 2-403 of UCC Article 2, Sale of Goods, and with elements of the Patent Exhaustion Doctrine. This amendment, if enacted, would prevent patent trolls from proceeding against Bona Fide Purchasers for Value with respect to certain specific infringements, in order to strengthen consumer confidence in the marketplace, by ensuring that vendors can deliver the products that they sell, free of threats of patent infringement litigation against such innocent buyers.

Tech sector giants have been crying and moaning about how the patent system has run amok and needs to be scaled back, and continually beg for patent reform that would gut the patent system and weaken patent rights… Even mighty Microsoft couldn’t maintain their monopoly, and only the foolish would anticipate Google, Facebook and other tech giants to be on top indefinitely. That isn’t how the tech sector works, or is intended to work. But if a vibrant, robust and strong patent system is not there for start-ups today they will never become the giant, innovation shifting, growth companies of the future. That would be terrible for the economy, lead to stagnant innovation and guarantee that slothful, giant companies that have lost the ability to innovate would remain dominant rather than going the way of the dinosaur.

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.

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.

Clouding IP Faces Inter Partes Review at the USPTO. ***** Goodlatte’s Second “Discussion Draft” of Patent Reform Legislation. ***** IPO White Paper Calls for Update to Patent Examination System. ***** The After Final Consideration Pilot 2.0 (AFCP 2.0), which had been scheduled to expire on September 30, 2013, has been extended through December 14, 2013. ***** Patent Litigator Becomes Managing Partner at Kilpatrick Townsend & Stockton. ***** The requirement for consonance applies to both the patent challenged for double patenting (i.e., the challenged patent) and the patent being used as a reference against the challenged patent (i.e., the reference patent).

The latest incarnation of the SHIELD Act was introduced on February 27, 2013, and changes direction as if the first iteration were waived off in disgust before it could even lower its gears. SHIELD Act 2, scuttles the “reasonable likelihood of succeeding” idea floated and introduces a new tool aimed at walling off the troll: a bond requirement. If the plaintiff is not an original inventor or assignee, did not make a substantial investment in practicing the invention, or is not a university, that troll must post a bond. Like SHIELD Act 1, SHIELD Act 2 does not require the troll to fire the first shot. Interestingly, under SHIELD Act 2, Facebook would have had to post a bond in its battle against Yahoo! and theoretically an involuntary but necessary party joined as a plaintiff could be required to post bond.

“Patty Sue Just Won’t Go Away.” So went a 2002 article in the San Francisco Chronicle, one of a many articles spanning several years about Patricia McColm, a vexatious litigant blacklisted since 1994. She was the Most Vexatious Pleader of the vexatious litigants. If she were a patent attorney, frightened examiners would give her a 100% allowance rate without amendments. If the anti-joinder provisions of the America Invents Act (“AIA”) applied to Patricia McColm, she would have her own clerk’s office. One draws similarities between the problems presented by firms such as Intellectual Ventures, Acacia, and Lodsys and those presented by Ms. McColm, and a flurry of proposals were recently introduced in Congress.

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. Key staff on the Hill believe the measure to be non-controversial. House passage of the measure could take place before year’s end.

The PTO, the House and Senate Judiciary Committee staffs, and some segments of the patent community, mainly those that were supporters of the AIA, had drafted a a proposed technical corrections bill. Obviously, if a proposed change is purely technical in nature, there shouldn’t be a lot of trouble passing it, but what is technical and what is not technical can be a rather subjective test. There has been some talk about efforts to change the AIA in ways that would have substantive effect on the law . And it’s those issues that have garnered some attention in recent months. There was some discussion about changing the estoppel standard for the post grant review provisions of the AIA, and there have been some proposals regarding a proposed expansion of prior user rights being kicked around as well. If those are on the table or appear in a technical corrections package, “technical” in quotes, I think it would be difficult to pass such a measure this calendar year. Nevertheless, that doesn’t mean that those who support those changes won’t continue to press for them and try to see them enacted, if not this year maybe next year.

The most significant reform to the U.S. patent system in more than a century took a major step forward at 12:01 am Sunday, as numerous provisions of the Leahy-Smith America Invents Act of 2011 went into effect. The new rules will spur innovation and economic growth by streamlining the patent application process and introducing new procedures to ensure patent quality. Seven reforms to U.S. patent law went into effect one year after the signing of the bipartisan patent reform legislation by President Barack Obama on September 16, 2011.

Yesterday Congressman Peter DeFazio (D-OR) and Congressman Jason Chaffetz (R-UT) introduced the Saving High-tech Innovators from Egregious Legal Disputes Act, or SHIELD Act for short. If ever passed into law the SHIELD Act would ostensibly adopt a variation on the English Rule, where the losing patent owner pays the legal fees of the victorious patent defendant when there was no “reasonable likelihood” that the patentee would prevail in the litigation. If theAct required a claim chart upon filing, applied across the board to all those who would seek to manipulate the patent system and not just computer/software patents and defined “reasonable likelihood of success” I would be on board with both feet.  As it is, I am on board with one foot and hopefully that improvements can be made to this important piece of legislation.

Many people situated variously within and outside of the patent system of the United States urged the adoption of first-to-file. There are, however, many questions about the scope and possible impact of the AIA. Exactly how it will all play out remains to be seen. A significant question is what will be the likely impact of the AIA upon the operations of the USPTO, an organization that has been so greatly over-burdened in recent times. Anyone interested in reading this is likely old enough to have heard the old saying “Be careful what you wish for – you may get it.” Now we have it.

There are two free webinars this week relative to the America Invents Act to alert you to. Given the enormity of the changes and how every time I read the legislation I seem to find something new, you might want to take time to sign up for both. The first will be hosted by the United States Patent and Trademark Office on Monday, October 31, 2011 beginning at 1:00 pm ET. The second, which will focus specifically on how the AIA will impact your business, is provided by K&L Gates and will be on Thursday, November 3, 2011 from 3:00pm to 4:30 pm ET.

Exactly who is to blame if a pharmaceutical company, say Eli Lilly, decides to invest billions of dollars and build a facility when they haven’t adequately protected their own intellectual property? Moreover, who is to blame if that company consciously chooses to resort to trade secret protection, which we all know is exceptionally fragile, as the foundation to build a multi-billion dollar investment? For crying out loud, the very premise that a patentee could force the closure of a manufacturing facility employing hundreds or thousands of people and interrupt the production and distribution of anything, let alone something as consequential as a pharmaceutical, is nothing more than fantasy. Talk about chicken little! Only someone unfamiliar with the evolution of the law relative to preliminary and permanent injunctions in patent litigation could with a straight face much such an argument. Indeed, the mother of all straw arguments!

Don’t forget that as of the end of the 2011 fiscal year on September 30, 2011, the PTO has a “backfile” of nearly 679,000 patent applications that have not yet been given even a first Office Action. It will take at least 3 to 4 years, likely longer, to resolve all the patent applications currently pending. If you factor in appeals from those cases, continuation applications and requests for continued examination and we are realistically talking about 7 to 8 years for this chunk of applications to work their way through the system, with the inevitable outlier patent application that will take 10+ years thanks to multiple delaying episodes (i.e., chaining RCEs and an appeal together, for example). On top of this, we will still be filing patent applications subject to the old, first to invent system through March 15, 2013. This, as well as reexamination timeline realities (i.e., statute of limitations survives 6 years past a patent falling into the public domain), means that the “old law” will remain relevant to life at the Patent Office for quite some time.