Senate Judiciary Panel Passes
Bipartisan Patent Reform Bill
… In 13-5 Vote,
Judiciary Committee Overwhelmingly Supports
Long-Overdue
Overhaul Of U.S. Patent System
WASHINGTON (Thursday, July 19) – The Senate Judiciary Committee
late Thursday
voted 13-5 to report out a bipartisan bill that represents the first
significant reforms to the nation’s patent system in several
decades.
“The Judiciary Committee today took an
important step to ensuring the continuing competitiveness of our
innovation economy,”
said Chairman Patrick Leahy (D-Vt.). “With the
thoughtfulness and care that characterizes the Committee at its
best, we have reaffirmed our commitment to ensuring that our
Nation’s patent laws promote and protect the inventiveness of all of
our industries.”
Leahy cosponsored the bill with Senator Orrin Hatch
(R-Utah), a senior member of the panel.
The Committee has been marking up the
comprehensive patent bill for the past several weeks. With the
Committee’s vote Thursday evening, the bill moves to the full Senate
for consideration. Earlier this week, the House Judiciary Committee
reported out a similar bipartisan reform bill.
Among many important reforms, the bill
would create a pure “first-to-file” system to bring needed clarity
and certainty to the U.S. patent system. The American system is the
only one in the world that still grants patents to the first
inventor rather than the first to file an application. The bill
also creates a more streamlined and effective way of challenging the
validity and enforceability of patents, Leahy said.
Earlier this year, Leahy and Hatch
joined with Rep. Howard Berman (D-Calif.), chairman of the House
Judiciary Committee's Subcommittee on Courts, the Internet, and
Intellectual Property,
and Rep. Lamar Smith (R-Texas), ranking member of the House
Judiciary Committee, to introduce the bicameral, bipartisan Patent
Reform Act of 2007.
“A bill as complex as this one will
require further attention, and I am committed to working with every
member of the Senate – and ultimately with our colleagues in the
House of Representatives – to make certain that all inventors enjoy
the respect and support that our Constitution envisioned,” Leahy
said.
# # # # #
Below is
background summary of the final manager’s amendment adopted by the
Committee today.
Managers Amendment
Leahy-Hatch Patent Reform Act Of 2007 (S.1145)
July 19, 2007
1. Venue
Explanation:
This amendment makes changes to the patent venue statute that were
contained in the last Managers’ Amendment, but which were
inadvertently omitted from Senator Specter’s venue amendment. The 1st
change expands the residency definition to include non-incorporated
businesses (e.g., LLC’s, LP’s, etc.). The 2nd change
provides similar treatment for US subsidiaries of foreign
corporations.
Change: On page
49, line 12, after “incorporated” insert “or formed”
On page 49, line 15-16, strike
“is located” and insert “has its principal place of business or is
incorporated or formed”
2. Willfulness
Explanation:
As introduced, the bill contained a section codifying, and
improving, the doctrine of willful infringement. A clerical error
occurred in the 2nd Managers Amendment – when making
changes to a different section (Damages -- Apportionment and Entire
Market Value Rule), the “strike” language inadvertently struck the
entire willfulness section as well. This change simply restores
that section to the bill.
Change:
At page 26, in between lines 6 and 7, insert the following:
(2) By
amending the second undesignated paragraph to read as follows:
“(b)
Willful Infringement.---
“(1) Increased Damages.---A
court that has determined that the infringer has willfully infringed
a patent or patents may increase the damages up to three times the
amount of damages found or assessed under subsection (a), except
that increased damages under this paragraph shall not apply to
provision rights under section 154(d).
“(2) Permitted Grounds for
Willfulness.---A court may find that an infringer has
willfully infringed a patent only if the patent owner presents clear
and convincing evidence that---
“(A) after receiving written notice from the
patentee---
“(i) alleging acts
of infringement in a manner sufficient to give the infringer an
objectively reasonable apprehension of suit on such patent, and
“(ii) identifying
with particularity each claim of the patent, each product or process
that the patent owner alleges infringes the patent, and the
relationship of such product or process to such claim,
the infringer, after a
reasonable opportunity to investigate, thereafter performed one or
more of the alleged acts of infringement;
“(B) the infringer intentionally copied the
patented invention with knowledge that it was patented; or
“(C) after having been found by a court to have
infringed that patent, the infringer engaged in conduct that was not
colorably different from the conduct previously found to have
infringed the patent, and which resulted in a separate finding of
infringement of the same patent.
“(3) Limitations on
Willfulness.---(A) A court may not find that an infringer
has willfully infringed a patent under paragraph (2) for any period
of time during which the infringer had an informed good faith belief
that the patent was invalid or unenforceable, or would not be
infringed by the conduct later shown to constitute infringement of
the patent.
“(B) An informed good faith belief within the
meaning of subparagraph (A) may be established by---
“(i) reasonable reliance on advice
of counsel;
“(ii) evidence that the infringer
sought to modify its conduct to avoid infringement once it had
discovered the patent; or
“(iii) other evidence a court may
find sufficient to establish such good faith belief.
“(C) The decision of the infringer not to present
evidence of advice of counsel is not relevant to a determination of
willful infringement under paragraph (2).
“(4)
Limitation on Pleading.---Before the date on which a court
determines that the patent in suit is not invalid, is enforceable,
and has been infringed by the infringer, a patentee may not plead
and a court may not determine that an infringer has willfully
infringed a patent. The court’s determination of an infringer’s
willfulness shall be made without a jury.”; and
(3) in the third designated paragraph, by striking “The
court” and inserting “(c)
Expert Testimony.---The court”.
3. Post Grant
Review
a)
Applicability
Explanation:
The PGR effective date is one year after the date of enactment of
the Act. Currently the bill provides that 2nd window (or
consented) petitions may be filed for all patents, regardless of
when they issue or when their corresponding applications were
filed. This change narrows that greatly, such that 2nd
window (or consented) petitions may only be filed for (i) patents
that issue on or after the PGR effective date, or (ii) patents that
issue before the PGR effective date based on an application filed
between November 29, 1999 and the PGR effective date. This latter
category includes patents that would have been subject to inter-partes
reexamination.
Change:
On page 44, strike lines 12 through 18, and insert “and shall apply
to patents issued on or after that date, except that, in the case of
a patent issued before the effective date of this Act on an
application filed between November 29, 1999 and the effective date
of this Act, a petition for post-grant review under section 321 of
title 35, United States Code, may only be filed under paragraph (2)
or (3) of section 322 of title 35, United States Code.”.
b) Appeals
Explanation:
Since its introduction, S. 1145 provided that PGR Board decisions
are only appealable to the Federal Circuit, and not to district
court (i.e., pursuant to 35 USC Sections 141-144) . This is
consistent with appeals of inter-partes reexamination. The 2nd
Managers Amendment inadvertently changed section number 144 to 145.
This clerical error would allow PGR Board decisions to be challenged
in district court first, before then appealing to the Federal
Circuit. This would add significant unwanted delay to the PGR
process. This change corrects that clerical error.
Change:
At page 43, line 19, strike “145" and insert “144”.
c) Burden of proof
Explanation:
There has been concern regarding the burden of proof for the 2nd
window of PGR. This change addresses that point.
Change:
At page 39, line 17, strike “322" and insert “322(1)”
At
page 39, line 18, after the period insert the following:
“For petitions filed under 322(2) or (3), the existence,
authentication, availability and scope of any evidence offered to
establish invalidity shall be established by clear and convincing
evidence; if such predicate facts are so established, invalidity
shall be proven only if the persuasive force of such facts
demonstrates invalidity by a fair preponderance of the evidence.”
d) Amendments to
claims
Explanation:
The intent of the bill is to allow for one motion to amend claims
throughout the proceeding. This technical change clarifies this
point.
Change:
At page 39, line 20, strike “In response to a challenge in a
petition” and insert “During a post-grant review proceeding”.
4. PTO Funding
Explanation:
This change clarifies that the conforming amendment in subsection
(d) of Section 9 (PTO regulatory authority) does not have the effect
of negating other provisions in Public Law 108-447 by impacting
those other provisions’ effective date.
Change:
On p. 55, change the existing “(e)” before the word “Definitions” to
“(f)” and insert the new subsection (e) below:
“(e) Nothing in this section shall be construed to affect any other
provision of Division B of Public Law 108-447, including section
801(c) of title VII of the Departments of Commerce, Justice and
State, the Judiciary and Related Agencies Appropriations Act,
2005.”
