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.
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.
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