“US Inventor believes that any substantive patent reforms should be fully addressed through the normal legislative channels and not rushed to the Senate floor without debate by tacking amendments onto a larger bill.”
The full U.S. Senate is currently considering passing S. 1260, the Endless Frontier Act, a bill that would establish a Directorate for Technology and Innovation within the National Science Foundation (NSF) that would work to establish U.S. dominance in crucial areas of basic research including artificial intelligence, high-performance computing and advanced manufacturing. The bill, which represents a bipartisan effort to address China’s ambitions to become a globally dominant technological power, includes a pair of amendments from Senators Patrick Leahy (D-VT) and Thom Tillis (R-NC) that would impact U.S. patent law by requiring foreign entities to register ownership changes to ensure the availability of infringement remedies, and by increasing the scope of ex parte reexamination to adjudicate whether patent claims are unenforceable for inequitable conduct. But according to small business and independent inventor advocacy group US Inventor, these amendments would negatively impact their members.
The Endless Frontier Act: Is Logrolling Causing the Bill to Lose Its Legislative Purpose?
The Endless Frontier Act passed successfully out of the Senate Committee on Commerce, Science, and Transportation on May 12 and POLITICO has reported that the full Senate could approve the bill by early June. Although the bill enjoys support from top Senate Democrats and Republicans, including Chuck Schumer (D-NY) and Todd Young (R-IN), critics of the current draft of the legislation have taken issue with legislative edits that have reduced the amount of funding earmarked for the NSF’s Technology Directorate. Those critics have suggested that a fair amount of logrolling, the legislative practice of trading votes for favors, often in the form of legislative amendments, may be subverting the original intent of the Endless Frontier Act, which has received 215 amendments thus far in the legislative process.
Two of those amendments will have the effect of curtailing patent rights for certain types of patent owners. Senate Amendment 1740 submitted by Sens. Leahy and Tillis would amend the language of 35 U.S.C. § 261, which governs ownership and assignment of U.S. patents, by creating a register of interests at the U.S. Patent and Trademark Office (USPTO). Although the register would track ownership interests for granted patents and patent applications generally, it would require recording the assignment of any patent interest greater than 10% for a particular asset to a foreign entity within 90 days of the assignment to that entity. Foreign entities failing to comply with this assignment recording requirement would not be able to recover any monetary damages in any infringement litigation for the period during which the patent asset’s ownership interest wasn’t properly recorded.
The second Leahy-Tillis amendment, Senate Amendment 1741, would amend a series of statutes related to ex parte reexamination proceedings within the USPTO such that a party challenging patent claims can assert that particular patent claims should be unenforceable due to inequitable conduct. Language on challenging patent claims as unenforceable on the basis of evidence that the claims were obtained through fraudulent conduct would be added to 35 U.S.C. § 302, governing requests for reexamination; 35 U.S.C. § 303, governing determinations by the USPTO Director of whether a substantial question of patentability has been raised by a reexamination request; 35 U.S.C. § 304, governing orders for reexamination proceedings to resolve patentability questions; and 35 U.S.C. § 307, governing certificates of unpatentability or claim cancellation following reexamination proceedings.
Leahy-Tillis Amendments Dredge Up PATENT Act Debate Issues
US Inventor said in a statement this week that the issues addressed by the Leahy-Tillis amendments have been resurrected from prior legislative hearings in 2015 regarding S. 1137, the Protecting American Talent and Entrepreneurship (PATENT) Act. The PATENT Act was one of several patent reform bills winding its way through the halls of Congress during 2015; IPWatchdog President and CEO Gene Quinn said at the time that the PATENT Act had the most misleading acronym of the proposed bills at that time, as it had “nothing to do with talent or entrepreneurship, but everything to do with patents.” While large companies, industry groups and some DC lawmakers held positive views of the PATENT Act, groups like the Innovation Alliance and the Biotechnology Innovation Organization (BIO) noted that heightened pleading standards, discovery stays and other provisions of that bill would have made it harder to enforce patent rights without any corresponding addressing of abuses of inter partes review (IPR) proceedings at the Patent Trial and Appeal Board (PTAB), which have harmed U.S. innovation. US Inventor said that the bill was “pushed heavily by Big Tech” and “would have done great harm to inventors and innovative small businesses.”
The PATENT Act faded into obscurity during the 114th Congress, dying in committee without ever being passed onto the floor of a Senate for a full vote. It doesn’t appear that the Leahy-Tillis amendments to the Endless Frontier Act would enact any substantive provisions of that bill, and the creation of an ownership registration requirement for foreign entities at least fits within the spirit of the Endless Frontier Act’s stated goal of maintaining U.S. technological dominance over China. However, US Inventor believes that any substantive patent reforms should be fully addressed through the normal legislative channels and not rushed to the Senate floor without debate by tacking amendments onto a larger bill. To that end, US Inventor is urging inventors, small businesses and others interested in promoting the prospects of independent inventors and entrepreneurs to contact their elected Senators by calling the Capitol Switchboard at (202) 224-3121 or by using other official means to contact elected Senators.
In a statement sent to IPWatchdog, the offices of Senators Tillis and Leahy had this to say about the amendments:
Senators Leahy and Tillis’s amendments are about promoting transparency in patent ownership and preventing fraud, period. Patents provide exclusive rights that can be used against the public. The public has a right to know who owns them as they are often sold and resold. There is also an increasing risk that our patent system will see a flood of fraudulent applications, presenting the very same problems that Congress just addressed in the Trademark Modernization Act. These amendments will help the United States get ahead of this problem and ensure a fair innovation system. No American company or inventor should oppose efforts to root out fraudulent patents and prevent the public from knowing who owns a limited monopoly.
Sullivan Amendment Would Prevent TRIPS Waiver for COVID-19 Vaccine Patents
Although the full text of the Endless Frontier Act, as well as other amendments submitted for that bill, include no other substantive changes to Title 35 of the U.S. Code governing patent law, Senator Tillis is also listed on an amendment submitted by Senator Dan Sullivan (R-AK), Senate Amendment 1919, that would prevent the U.S. Trade Representative from either proposing or supporting a waiver of intellectual property rights under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) related to copyrights, patents, industrial designs and undisclosed data for COVID-19 vaccines. Such an amendment would undermine the Biden Administration’s recent decision to support the TRIPS patent waiver currently proposed at the World Trade Organization (WTO), a proposal that has met with much controversy from those who point out that there is no scientific evidence that patents pose an access barrier for vaccines. Sullivan’s amendment preventing the TRIPS waiver for COVID-19 vaccines is also supported by Senators Tom Cotton (R-AR) and Joni Ernst (R-IA).