Some Overlooked Holiday Treats in the STRONGER Patents Act

By Paul Vickers Storm
November 9, 2019

“While the more well-known provisions may hold the spotlight, Congress has packed the STRONGER Patents Act with plenty of goodies to put smiles on patent owners’ faces for the holidays.”

https://depositphotos.com/309338310/stock-photo-thanksgiving-dinner-concept.htmlIt’s that time of the year—Halloween candy is still lingering in bowls, turkey and dressing is tantalizingly close, holiday cheer abounds. While winter skies are overhead, Congress is working to strengthen the U.S. Patent system with the STRONGER Patents Act. The bill was most recently debated by the Senate Judiciary Committee’s IP Subcommittee in September and has stolen the spotlight from the Section 101 reform debate, which for the moment seems to have stalled. Much has been written about the main provisions of the STRONGER Act, such as making inter partes review (IPR) and district court standards and procedures the same. Like extra Halloween candy or Aunt Imelda’s sweet potato pone, Congress has included a number of extra goodies for patent owners that have not been widely appreciated.

Candy Corn: The STRONGER Patents Act includes new limitations on ex-parte reexaminations. Sections 105 and 106 of the Act contain two new limitations. Section 105 requires a reexamination request to identify the real party in interest. Currently, a reexamination request may be filed anonymously. This has benefited parties that believe a patent should be invalidated but do not want to identify themselves to the patent owner. For example, a company considering entering a market where an existing player has a patent might file a reexamination request to seek to invalidate a patent before beginning infringement. As a potential new entrant in the market, they can stay under the radar by filing anonymously. The Act will no longer allow such a strategy. This strengthens patents but reduces the incentive for third parties to file reexamination requests. Possibly more importantly, section 106 prohibits the U.S. Patent and Trademark Office (USPTO) from instituting a reexamination if the request is filed more than one year after a patent infringement complaint has been filed.

Pecan Pie: In 2006, the Supreme Court issued Ebay v. MercExchange, which reversed long standing precedent from the Federal Circuit holding that irreparable harm was presumed after a patent was held valid, enforceable and infringed on the merits. Under that law, an infringer had to consider the likelihood that a permanent injunction would likely issue if they lost on the merits. The Act effectively reverses Ebay and restores the presumption of irreparable harm and the presumption that damages post-trial are inadequate to compensate for the infringement. This will strengthen patents by increasing the risk faced by infringers if they do not prevail on the merits. While this is perhaps one of the more well-known provisions of the Act, it is worth reiterating here considering its importance in light of the Ebay decision’s considerable weakening of patents as a result of making preliminary injunctions less available.

Wild Rice: Establishing requirements for demand letters. Currently, there is a patchwork of state laws governing letters asserting possible patent infringement and treating them as various forms of unfair competition. Section 201 through 204 establishes uniform requirements for such letters. Failure to comply with the requirements will constitute an unfair or deceptive trade practice. To avoid a claim, a demand letter must meet several requirements, including a clear statement regarding the right of the sender to enforce the patent and a clear statement of the basis for the claim. A proper demand letter will need to include a claim chart which identifies the assert claim(s), identifies the alleged infringement and shows how the claim applies to the infringement. The Federal Trade Commission (FTC) is authorized to enforce these requirements and all state laws dealing with demand letters are preempted. Loose claims of infringement will now be subject to penalties assessed by the FTC.

Homemade Bread: Patent infringement litigation can be very challenging for a small business. When small businesses are enforcing their rights, numerous detailed procedural requirements can permit determined infringers to make the process lengthy and expensive. When defending against a claim of infringement, those same requirements can make a monetary settlement a practical necessity despite clear defenses. The Act requires the designation of at least six districts that are already participating in the Patent Pilot Program to develop procedures for expediting patent infringement litigation involving small businesses. This will permit testing various ways to streamline patent cases when small businesses are involved. For example, the early appointment of a special master to make a preliminary assessment, which may either lead to early settlement or limiting the issues and therefore the cost. As an incentive to the district judges that agree to participate, they will be allowed an additional clerk or secretary to help with the work to develop small business procedures.

Cranberry Sauce: Ending fee diversion. Congress has elected to treat fees paid to the USPTO as general revenue and then funded the Office with general appropriations. This has disconnected the fees charged from the amounts needed to properly operate the USPTO. To obtain its funding, USPTO official necessarily are involved in the general budget process. The Act ends this practice. The Act allows the USPTO to keep and use in its operations the income it collects through fees. While largely hidden from the intellectual property community, this may be the most significant aspect of the Act. By allowing the USPTO to retain the fees it collects, the Office can plan for its necessary expenses including personnel, infrastructure and office space. Fees can be set by the Office and they can be confident that they will be able to plan the use of such fees to strengthen the overall system.

Thus, while the more well-known provisions hold the spotlight, Congress has packed the STRONGER Patents Act with plenty of goodies to put smiles on patent owners’ faces for the holidays.

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The Author

Paul Vickers Storm

Paul Vickers Storm is a Partner with Foley & Lardner, LLP. He has over 20 years of national and global experience in patent, trademark, copyright and trade secret procurement, counseling and litigation across a wide range of industries. Most of Paul’s practice involves IP litigation at the trial and appellate levels, as well as in arbitration. Clients value Paul’s ability to explain what is going on in a matter in business terms, as well as his pragmatic, 360-degree perspective of claims developed from his experience representing both plaintiffs and defendants.

For more information or to contact Paul, please visit his Firm Profile Page.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 11 Comments comments. Join the discussion.

  1. Pro Say November 9, 2019 3:16 pm

    Thanks Paul. America’s beleaguered inventors are in desperate need of the STRONGER Patents Act.

    Relatedly, here’s the YouTube link to the Oct 25th Inventor’s rally that Gene recently referenced:

    https://www.youtube.com/watch?v=ysOeiks1PO4&feature=youtu.be&utm_source=Active+Subscribers&utm_campaign=b831bf4cb8-EMAIL_CAMPAIGN_2019_07_12_01_48_COPY_01&utm_medium=email&utm_term=0_ddb59c3b47-b831bf4cb8-205505393

    Congress: Please pass this critical Act and restore the apparently stalled restoration of subject-matter eligibility.

    2020 is just around the corner.

    Our Country can’t wait another decade for the restoration our previously world-leading patent system

  2. angry dude November 9, 2019 7:27 pm

    Too little, too late

    Fool me once – shame on you, fool me twice – shame on me

    The doc said “to the morgue” – to the morgue it is!

  3. angry dude November 9, 2019 7:45 pm

    This is just empty talk

    Until some smaller entity – maybe not an independent inventor but a smaller R@D intensive company gets an actual court-enforced injunction against the likes of Apple or Amazon I will not believe any of this crap

    Trump/some congress critters may personally hate Bezos/Google/Apple punks and lgbts, but this is all about money, money above all, forget US Constitution, forget the future of this country, money now, as much as possible, as soon as possible…

    Money talks, money works, money wins at the end…

    To the morgue…

    P.S. And this is High Treason, mark my words

  4. Glen Wade Duff November 10, 2019 7:32 am

    Paul, Love the creative presentation of delicious hidden side dishes. Thanks for the illumination of those features that I did not understand before.
    Small business owners, who are not patent protection experts, appreciate the encouraging words.
    As they say “the proof is in the pudding“, so let’s keep working hard to continue cooking in the kitchen, even when it’s hot in there.

  5. Night Writer November 10, 2019 9:36 am

    In my opinion, no chance for this to pass.

  6. jack November 10, 2019 10:06 am

    Patch here and there on a horrible mess. Inventor is still homeless in the jungle. Unless the US finally concludes that the dollar spent on an invention is ten times worth more than a dollar spent on lawyers and start enforcing its laws, like, for example, in China doing through “IP enforcement Offices,” the mess will continue. Simple cases can be solved without lawyer involvement. From an individual inventor point of view, this is no brainer.

  7. Jason Lee November 13, 2019 9:40 am

    What are the chances The STRONGER Patents Act will pass the Senate and the House floor? We currently only have 6 Senators and 16 Congressmen on board. To pass a bill by simple majority we need 218 of 435 in the House, then the bill moves to the Senate. In the Senate, the bill is assigned to another committee and, if released, debated and voted on. A simple majority 51 of 100 is needed to pass the bill. If the right thing to do was the moral compass of Government, this bill would have pass when it was first introduced years ago.

    The moral and ethical thing to do would be to pass The STRONGER Patent Act. Its in the nations best interest to keep patents protected. But international organizations are trying to keep Senators and Congressmen from voting to pass this bill. It’s sad to see America have sold their nation to a small group of corporations that have no loyalty to keep the people of the United States prosperous though the one thing that made them the envy of the world and that was its protection of patents that helped fund small companies and help to attract investors to build the industry of tomorrow.

    If we are not going to look after the seeds of today, tomorrow we will be eating someone eases fruits.

  8. angry dude November 13, 2019 4:52 pm

    Jason Lee @7

    “If we are not going to look after the seeds of today, tomorrow we will be eating someone eases fruits.”

    :):):)

    But this is not correct

    The correct version is
    “If we are not going to look after the seeds of today, tomorrow we (US population minus top 1% of the richest people ) will not be eating”

    Or even better:
    “Those who are reluctant to feed their own army shall feed a foreign army”

  9. Jason Lee November 13, 2019 9:26 pm

    @angrey dude

    I think my version is much more accurate. Nice try :):):)

  10. Liberty November 13, 2019 9:46 pm

    In todays patent world Google, Apple or Amazon would have Z E R O chance of growing because of anti patent Government. What we have today it a gross travesty of the complete devastation of patent protection. America has killed their own patent system. Inventors are moving over seas to get the protection and investors that no longer exist in the new anti patent America.

  11. Adrian Pelkus November 18, 2019 12:40 pm

    While this bill addresses some of the travesty it falls far short of the main problem – PTABs, the false and self destructing confession that the USPTO failed in its responsibilities to issue valid patents. The invalidation of over 2000 patents since PTABs erodes trust/value in US patents. The recent exposure the “judges” at the PTAB were unconstitutionally appointed, those patents therefore illegally invalidated and the lack of immediate action to remove those judges and stop these illegal proceedings that are stealing inventors lives further shows American inventors and the world how little they are appreciated and rights cared for.

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