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House to Move on AIA Corrections and Trade Secrets

Capitol Building. © 12-11-2012 by Gene Quinn.

UPDATE December 19, 2012

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.

As it stands now, the language of Section 1(m) that will be considered on Tuesday reads:

REPORT ON PRE-GATT APPLICATIONS. —Using existing resources, not later than four months after the date of the enactment of this Act, the Director of the United States Patent and Trademark Office shall submit a report to the Committees on the Judiciary of the United States House of Representatives and the Senate that describes

(1) the total number of pending United States applications for patent that—

(A) are not subject to an order under section 181 of title 35, United States Code; and

(B) were filed before the effective date of the amendments made by section 532 of Uruguay Round Agreements Act (Public Law 103–465; 108 Stat. 4983);

(2) the filing date of each such application;

(3) the filing date of the earliest application for which each such application claims the benefit of or a right of priority to its filing date;

(4) the inventor and assignee named on each such application;

(5) the amount of time that examination of each such application has been delayed because of a proceeding under section 135(a) of title 35, United States Code, an appeal to the Patent Trial and Appeal Board under section 134(a) of such title, a civil action in a United States District Court under section 145 or 146 of such title, or an appeal to the United States Court of Appeals for the Federal Circuit under section 141 of such title; and

(6) other information about such applications that the Director believes is relevant to their pendency.

The suspension list also includes S. 3642 – The Theft of Trade Secrets Clarification Act of 2012, which recently passed the Senate.  This means if S. 3642 passes the House it will go to the White House for the President Obama’s signature. S.3642 fixes a Second Circuit decision regarding the scope of the Economic Espionage Act (EEA), which makes it a federal crime to, among other things, steal a trade secret knowing that the theft will harm the owner.

The district court in U.S. v. Aleynikov interpreted the phrase “produced for” interstate or foreign commerce in the EEA broadly. It held that the system was “produced for” interstate commerce because “the sole purpose for which Goldman purchased, developed, and modified the computer programs that comprise the Trading System was to engage in interstate and foreign commerce” and because it was used rapidly execute high volumes of trades in various financial markets. Thus, the district court interpretation was that a product is “produced for” interstate or foreign commerce if its purpose is to facilitate or engage in such commerce.

The Second Circuit, in applying the same language of the EEA, found that even though stolen source code may be part of a financial trading system used in interstate commerce the software itself had not been placed in interstate commerce. In explaining why they did not broadly interpret “produced for” as did the district court the Second Circuit explained:

Since every product actually sold or licensed is by definition produced for the purpose of engaging in commerce, every product that is “placed in” commerce would necessarily also be “produced for” commerce—and the phrase “placed in” commerce would be surplusage.

Thus, the theft was not a violation of the EEA in the view of the Second Circuit. See U.S. v. Aleynikov, 676 F.3d 71 (2d Cir., 2012).

S. 3642 amends the EEA to cover thefts of trade secrets and specifically address this Second Circuit decision. The amendment to accomplish this is short, simple and straight forward:

Section 1832(a) of title 18, United States Code, is amended in the matter preceding paragraph (1), by striking ‘‘or included in a product that is produced for or placed in’’ and inserting ‘‘a product or service used in or intended for use in’’.

A full list of the measures slated for consideration in under suspension of the House rules can be found at Text of Bills for the Week of December 17, 2012.


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