Why being in the middle is the right place
Part 1: This is a three-part column on patent reform.
Recent background on patent reform
Following the Federal Trade Commission and the National Academies studies and recommendations, a series of legislative proposals have been making their way through Congress. Numerous hearings have been held before both House and Senate committees and proponents and opponents have testified in general terms and on specific reform issues. Bills have been introduced in both the House and the Senate and various amendments are currently being considered.
The Commerce and Justice Departments, the USPTO and the Chief Judge of the Court of Appeals for the Feral Circuit have weighed in on some issues. Recent United States Supreme court decisions have addressed some previously identified reform
"Everyone has a favorite critically important issue or issues -- for example, apportionment of damages, post-grant review, venue, prior user rights, first to file..."
issues (injunctions and the motivation/teaching/suggestion test for nonobviousness) and in those decisions the Court has raised concerns, in dicta, about some related patent issues. Many interested stakeholders, industry coalitions, academics, universities, independent inventors, and patent bar and trade associations are actively lobbying. Everyone has a favorite critically important issue or issues -- for example, apportionment of damages, post-grant review, venue, prior user rights, first to file, inequitable conduct, willful infringement, or best mode.
The legislative proposals are attempting to modernize the patent laws for today’s economic realities. The issues can be broken into two main categories: those that primarily relate to improving the operation and quality results of the patent procurement process, and those relating to patent enforcement in the courts. More specifically, the proposals are focusing on improvements to the effectiveness of the US patent system, including (1) providing more public involvement in the patent examining process, important steps the US should take towards greater harmonization with the laws of other countries, and simplifying/streamlining patent application processing, and (2) issues dealing with litigation abuses such as forum shopping and excessive damage awards. As a result of the wide scope of the issues, the current bills contain more than a dozen significant proposals which present both policy and procedural changes that could have unintended as well as intended consequences.
Can members of Congress synthesize all that they have heard and create effective and fair legislation to address all these concerns, or are there some issues where the solutions are not ripe or require changing too many complex and interrelated provisions at one time? On some issues where there is limited consensus and the proposed solutions may conflict can Congress properly determine who is right and arrive at a proper balance?
IPO’S Position: Why it presents the best balance
For about two years, the IPO Board has been actively discussing each of the reform issues in the above-identified studies, prior bills and those independently identified by the IPO Board and advocacy policy committee. We have discussed, debated and voted (majority rule) on basic principles and positions, proposed legislation, and voiced our support and concerns with specific statutory schemes. IPO has been publishing its positions with comparisons to the different proposed bills, and has been lobbying members of Congress.
Provisions in S.1145/H.R.1908:
(introduced April 4/18/2007 Concurrently in Both Houses):
o Establish First-Inventor-to-File System (Sec. 3) [IPO Supports]
o Allow Assignee Filing (Sec. 4) [IPO Supports]
o Clarify Willful Infringement and Notice (Sec. 5) [IPO Supports]
o Expand Prior User Rights (Sec. 5) [IPO Supports]
o Codify Damages Apportionment (Sec. 5) [IPO Supports, but Changes Needed]
o Establish Post-Grant Review Proceeding (Sec. 6)
[IPO Supports, but Changes Needed]
o Expand Inter Partes Reexamination (Sec. 6) [IPO Supports]
o Publish All Patent Applications at 18-Mos (Sec. 9) [IPO Supports]
o Allow Submission of Prior Art by 3rd Parties (Sec. 9) [IPO Supports]
o Amend the Venue Statute (Sec.10) [IPO Supports]
o Create Right to Interlocutory Appeals (Sec. 10) [IPO Opposes]
o Provide Substantive Rulemaking Authority (Sec. 11) [IPO Opposes]
o Transfer Fee-Setting Authority to USPTO (Senate amendment) [IPO Opposes]
Not surprisingly, I believe IPO’s positions strike the right balance and best represent what patent reform legislation should include at this time. Although much is being written about the different needs of the information technology industry and pharmaceutical and biotech companies, only IPO’s Board contains representatives from these as well as many other highly innovative manufacturing companies in all sectors of the economy. IPO’s group of patent owners desire improved USPTO operations including an end to fee diversion, higher quality patents, 18 month total patent application pendency, greater certainty and uniformity, harmonization, and low transaction costs. They also want elimination of litigation abuses and greater certainty and predictability of results in the courts.
Because of IPO’s uniquely diverse composition, our positions have been debated by patent counsels having real world business experience with these problems, and a common understanding of the intricacies of patent law. IPO members share a fundamental belief in strong and enforceable patents and desire to improve the patent system for the benefit of all users and the public at large.
As a result, IPO’s positions represent a middle ground position. Our representation does not favor “high tech” or pharma, or one geographical area over another, or, in my opinion, the interests of large companies over the interests of smaller entities or individual inventors. The Board has addressed each issue looking at how to solve the problem presented and improve the system as a whole. By examining each issue separately on its merits, we have refrained from politicized the process and not engaged in trading support for one proposal for support of another. Some Board members do not agree with every IPO position, while some contend that IPO hasn’t weighed in as strongly as they may desire on certain issues, but since that criticism comes from different parties on different issues, I take it as a positive sign that we probably have developed a useful compromise on the most important issues that are ripe for legislative action.
If Congress has the will to pass a patent reform law now, I believe that it should stop adding new issues, focus on the most important ones with the highest degree of consensus, make significant changes to address those issues now, and allow more time to devise better solutions to deal with other contested issues. Loading the bill with special interest carve outs, complex procedures and narrow exceptions, trading support for one position for another, and diluting provisions will further delay reform, or worse, lead to unintended negative consequences. We need fundamental
"Loading the bill with special interest carve outs, complex procedures and narrow exceptions, trading support for one position for another, and diluting provisions will further delay reform, or worse, lead to unintended negative consequences."
improvements for as many of the issues as possible now without doing harm to the system. We need to employ 21st century creative thinking mindful of the intricacies of patent law and appreciate how well the system has worked to spur innovation and the economy these past 50 years since 1952 Act.
[Part II of this column on patent reform will discuss patent procurement and operating issues]