UPDATED: March 9, 2011 @ 2:35pm

By a vote of 95 to 5, the Senate last night passed comprehensive patent reform legislation. S.23, “The America Invents Act”. But the path forward for passage of the measure in the House of Representatives remains unclear.

The bill – which was introduced by the Senate Judiciary Committee’s Chairman, Sen. Patrick Leahy (D-VT), Sen. Orrin Hatch (R-Utah), and the Committee’s Ranking Republican, Sen. Charles E. Grassley (R-IA) – moved quickly through the Judiciary Committee, with a Committee vote of 15-0.  Catching some critics off-guard, S.23’s advocates were able to take advantage of the light Senate floor schedule that often exists early in a new Congress and to capture the attention of Majority Leader Harry Reid (D-NV).   Specifically, S.23’s bipartisan posture, fueled by an Administration eager to advance innovation and job creation policy initiatives, made the bill an attractive floor measure for Senate Leadership, who was otherwise consumed by a heated, partisan battle over federal government funding.

It is admittedly hard to get worked up about the prospects of patent reform given that over the last 5 to 6 years we have be variously told that it was only a matter of time, a done deal, imminent and/or guaranteed.  Of course, patent reform hasn’t happened; legislative efforts have simply been unable to cross the finish line.

Notwithstanding, Congress is at it once again, with the Senate Judiciary Committee reporting out a bill last week that remarkably resembles the bill that has been unable to gain any traction in the Senate for the last several years.  That would suggest that the same fate is in store for this legislation.  Not so fast!  I have a suspicion that this year things are different and that we really could be on the cusp of patent reform.  Whether that is for better or for worse will largely be in the eye of the beholder, but what is emerging feels different and I think we are closer to change, and perhaps an end to fee diversion, than we have been at any point over the last 6 years.

WASHINGTON (Wednesday, Sept. 15, 2010) – A bipartisan group of 25 Senators Wednesday sent a letter to Senate Majority Leader Harry Reid (D-Nev.) urging him to schedule a vote on the bipartisan Patent Reform Act. The legislation will make the first reforms to the nation’s patent laws in more than 55 years, and will update the patent system to improve patent quality and increase certainty among parties in litigation.

Todd Dickinson, AIPLA Executive Director, 8/19/10

In this second installment of my interview with current AIPLA Executive Director and former USPTO Director, Q. Todd Dickinson, we start out discussing pendency at the Patent Office.  Dickinson tells me about the incentives he used to keep patent examiners as they matured into the level of experience where they are ready to really roll up their sleeves and become the work-horses the Office needs.  We talk about the AIPLA position on the proposed Three Track Proposal now pending at the USPTO.  We then moved into a very interesting discussion of patent reform, and a bombshell is dropped, at least in my opinion.  I was surprised to hear Dickinson say that he does not think patent reform is dead for THIS legislative cycle.  He says: “The clock’s running and, the plays have to be run a little faster,” but that he “can see a path forward once the Congress returns.”  He goes on to point out that the American Inventors Protection Act was attached to an appropriations bill.  Looking at what Congress has on its plate upon returning it looks like there are a lot of appropriations bills.  Curious indeed!

Earlier today, in In re Ciprofloxacin Hydrochloride Antitrust Litigation, the United States Court of Appeals for the Second Circuit issued a ruling addressing whether so-called reverse payments, payments made under a negotiated settlement by a pharmaceutical patent owner to a would-be generic entrant in exchange for not entering the market, are a violation of U.S. Antitrust Law.  The appeal came from a judgment of the United States District Court for the Eastern District of New York (Trager, J.) granting summary judgment for defendants, manufacturers of the antibiotic ciprofloxacin hydrochloride (“Cipro”) or generic bioequivalents of Cipro.  In a per curiam decision the Second Circuit panel (Judges Newman, Pooler and Parker) affirmed, determining in accordance with Second Circuit precedent (see In re Tamoxifen Citrate Antitrust Litig.) that reverse payments stemming from a patent settlement do not violate U.S. Antitrust Laws.

The plaintiffs had argued that defendants had in fact violated Section 1 of the Sherman Act when they settled their dispute concerning the validity of Bayer’s Cipro patent by agreeing to a reverse exclusionary payment settlement.  Bayer agreed to pay the generic challengers, and in exchange the generic firms conceded the validity of the Cipro patent.  The Second Circuit panel affirmed the granting of summary judgment, finding themselves confined by the previous Second Circuit ruling in Tamoxifen.  The panel did, however, make the extraordinary invitation to petition the Second Circuit for rehearing in banc, citing the exceptional importance of the antitrust implications, the fact that the primary authors of the Hatch-Waxman Act have stated reverse payments were never intended under the legislation and the fact that the Second Circuit in Tamoxifen simply got it wrong when they said that subsequent generic entrants could potentially obtain a 180 exclusive period even after the first would-be generic entrant had settled.

By now most are likely aware that patent reform is back, once again, with the current draft legislation available for everyone to read.  It is becoming harder and harder to take patent reform seriously, given that it has started to become a little like a bad horror movie where the villain is killed only to reappear in the next episode, a la Jason from the Friday the 13th movie franchise.  Over the last 5 years or so we have been told that patent reform is a done deal, only to have it called off and proclaimed dead due to lack of compromise.  Is this time different?  At the risk of sounding extremely naive, I think this time is different and it is going to happen.  It looks like most of the contentious issues have been ironed out enough to have generated a bill that can be passed and become law.  However, the continued focus on health care reform by the Obama Administration promises to cripple Congress for at least a few more weeks, likely longer.  By the time Congress is operational again, will there be enough interest to do something, even anything?

Invention promotion firms, sometimes referred to as invention promotion companies, have been widely criticized in numerous circles, including political circles in Washington, DC, for many years.  The American Inventors Protection Act (AIPA) was enacted into law in 1999 and by its very name sought to address head on the problems faced by so many inventors.  In truth, the title of the Act probably had more to do with selling the patent reform bill, which many individuals did not think would benefit independent inventors.  Whatever your view of whether the AIPA was a net positive or net negative for independent inventors, it is clear that certain provisions of the Act, which are now law and codified at 35 USC 297, unequivocally attempted to provide important protections for inventors against those invention promotion firms who have such a checkered past.

In light of recent developments, namely IPWatchdog, Inc., me personally and my wife Renee personally being sued by an invention promotion company that didn’t like what we wrote about them, I thought it might not be a bad idea to take a stroll down memory lane, explain a bit about the Act, take a look at what US Senators Joseph Lieberman and Orrin Hatch had to say and made a part of the legislative history.

This year as we wind down and look back we not only need to look back at the previous year, but the first decade of the new century and new millennium will be ending.  So at this reflective time of year it seems appropriate to take a look back at the biggest patent related news stories of the decade.  As with any Top 10 list, or any ranking, there will undoubtedly be disagreements, arguments and some things that people believe should have been on the list.  What follows is Part 1 of my personal Top 10 patent news related stories for the decade. Once I get all 10 out, by later in the week, I will provide a survey that allows you to rank them, and I hope you will.  We can then take a look back at my Top 10 vs. the Top 10 of IPWatchdog.com readers next year.  Please also feel free (and I am sure you will) to point out things that I missed or clearly got wrong, at least in your opinion.

Without further ado, in descending order, here is Part 1 of my Top 10 Patent Related Stories of the Decade:

There has been something brewing for at least a couple weeks now on the patent reform agenda, and I have been trying to make sense of it all.  I am not sure I have my head wrapped around it yet, but the Wall Street Journal (via Dow Jones Newswire) is reporting that President Barack Obama is placing his support behind major changes to the patent laws and reopening the patent reform debate.  For some time now I have been writing that patent reform was dead and would not come back before the end of 2009, and that if it did not come back it would be difficult to do anything during 2010 due to it being an election year.  Patent reform is not susceptible to party politics, but there are major industries and large donors who are on both sides of the debate, which will make it exceptionally difficult for many Senators to cast a vote one way or another.  For that reason I do not suspect patent reform to be on the table in 2010 with what will be a very heated election cycle where every supporter and every dollar will matter.  I also did not believe patent reform would come back this fall because the health care debate was raging and splitting the country and Congress.

David Kappos

To start the confirmation proceedings in the Senate Judiciary Committee, Senator Patrick Leahy (D-VT) introduced David Kappos this morning with a lengthy and impressive recitation of Kappos’ credentials and experience.  He started out with IBM as an engineer after graduating with highest honors from the University of California Davis with a degree in electrical and computer engineering, and moved to the legal department upon completion of his Juris Doctor degree, and then ascended through the ranks at IBM to become Vice President and and Assistant General Counsel.  Senator Leahy then allowed Kappos to introduce his family members “for the Kappos archives.”  After introducing his parents, Kappos then introduced his Aunt and Uncle who had come to the hearings “from their home in Vermont.”  This lead to Senator Leahy saying “oh boy, you know how to get at” and then he started laughing, as did the entire gallery.  Of course, Leahy is from Vermont, so Kappos was off to a good start immediately in an easy and friendly atmosphere set by Senator Leahy.

Senator Orrin Hatch (R-UT)

Senator Orrin Hatch (R-UT) has been out in front on patent and intellectual property issues for years, and he is at it once again.  Senator Hatch has recently been very active with respect to writing op-ed articles explaining what all of us in the patent community have known for a very long time.  My hope is that his profile will bring attention to what is obvious — “If we are to have a durable economic recovery, we must rely on our renowned American ingenuity to lead us into prosperity again.”  These words were written by Senator Hatch in an op-ed published by TheHill.com earlier this week.  I have been beating this drum for many months now, and with Senator Hatch beating the drum hopefully the rest of America, and in particular the Congress and White House, will pay attention.

UPDATED: 8:42pm ET

At some point in time today, presumably after I nominated Alfred E. Neuman for PTO Director, President Obama announced that he intends to appoint David Kappos as the Undersecretary of Commerce for Intellectual Property, a position that will make him the Director of the USPTO.  It was predictable that word of the nomination, or iminent nomination, would come while I am on the road teaching the PLI Patent Bar Review Course (I am in Boston presently teaching at Suffolk Law School).  In any event, I am not exactly sure what to make of the White House announcement today.  Exactly what does it mean when the White House announces  President Obama intends to appoint Kappos to be PTO Director.  Is this an announcement that an announcement of Kappos as PTO Director is forthcoming?  I don’t know, but it seems as if Kappos is heading to the PTO, which means Alfred E. Neuman once again will not hold a position within the US government.

Yesterday I posted an article titled Innovation Held Hostage by the Patent Office.  In the article I detailed some troubling things I have learned regarding what appears to be best explained by patent examiners taking cases out of order.  The Patent Office is a first-in-first-out (FIFO) system, or at least it is supposed to be.  A couple patent attorneys have reported to me that they have received First Office Actions on the Merits anywhere from 4 to 6 months after filing, and one attorney pointed me to a business method patent application filed by Lehman Brothers on November 26, 2006, which issued as a patent less than 7 months later on June 5, 2007.  All of this is extremely troubling, and one person who commented suggested that the reason this was happening was because money was changing hands.  I do not believe that to be the case.

What follows is a copy of the remarks of Senator Orrin Hatch, delivered at the World Copyright Summit earlier this morning at the Ronald Reagan Building in Washington, DC.  It is great to hear Senator Hatch discuss the importance of protecting intellectual property rights against the actions of infringers.  In my opinion, intellectual property rights are essential to guarantee continued creativity and innovation.  Now if Congress would just listen to Senator Hatch on the importance of inequitable conduct reform, but I digress.  Without further ado, Senator Hatch’s remarks:

As of today, legislative patent reform efforts are working their way through Congress. We are further along the road to legislative reform than at any point in time over the last 4 years, but the ultimate outcome is still not certain. The Senate Judiciary Committee has reported out a version of patent reform, so there is a real expectation that legislative reform will happen at some point during 2009, perhaps soon. It is expected that if Senator Harry Reid (D-NV) brings the legislation to a vote it will be because he has the votes to pass the legislation. If the Senate passes patent reform there will be patent reform. The House of Representatives has consistently passed patent reform, and there is every expectation that President Barack Obama will sign the bill, thus the Senate is, as is typically the case, in charge.