Friday, February 03, 2006

A MODEST PROPOSAL FOR PATENT REFORM: EXPAND DUTY OF CANDOR TO POST-GRANT ACTIVITY: With all the concerns over "bad" patents and serial patent litigation, there have been many proposals put forth to overhaul the US patent system. One of the biggest problems in the current reform movement is that it is very difficult to provide a clear statutory definition on who is trying to abuse the patent system (i.e., Lemelson) versus someone who is legitimately enforcing a constitutional right (i.e., the "power to exclude").

Currently, the USPTO imposes a duty of candor and good faith under 37 C.F.R. 1.56, where, if any information that is material to patentability is known by the applicant during examination, the applicant must disclose this information to the USPTO or subsequently risk a charge of inequitable conduct. If this happens, the patent is rendered unenforceable.

It's a good rule, which generally keeps applicants honest during the examination of their patent applications (oddly enough, the EU doesn't have such a requirement). However, once the patent issues, the duty is discharged, and no further submissions are required. For example, if your patent issues, and a week later you, or someone else, discovers prior art that kills your application, there is no requirement that forces a person to disclose the prior art to the USPTO. As such, the public only has a limited snapshot of the state of the art as it pertains to the issued patent.

Since the USPTO has limited time and resources to search for prior art, it is automatically assumed that the art cited during prosecution is not necessarily the "best" prior art out there.

The software industry is working on ways to make more prior art documents available in specific technological fields (see USPTO-open source collaboration here). But this is an inefficient process. Just because you pump out lots of documents doesn't mean that people reading those documents will interpret them correctly and/or know how to apply those documents towards a specific patent.

What is needed is a system where the state of the art can be determined, not just for a specific technological field in which a patent issued, but to the patent itself.

Which brings me to my proposal:

Proposed rule for "Duty to Disclose Post-Issue Information":

A patentee has the duty to disclose all litigation activity involving the issued patent, and further disclose all submitted arguments directed towards claim scope, as well as any patents or publications asserted as invalidating prior art during litigation.
Under this proposal, the USPTO would modify its on-line web site (as well as PAIR) to have a link to "Post-Issue Information." Once it is clicked, the information discussed below would be displayed.

How the duty works:

(1) If a patent is asserted in district court, the patentee is under the obligation to notify the USPTO of the case name, court, and docket number, along with a copy of the complaint. That's it. A small filing fee would be charged for the filing (of course), and the notification of litigation activity would be marked for the patent. This one is easy, since courts already give notice to the USPTO Commissioner of pending litigation, and all the PTO would have to do is incorporate this directly to their web site.

(2) If patents or publications are alleged to be invalidating prior art, all of those documents must be submitted to the USPTO within a set period of time (say, 1 month, with extensions), along with a copy of the court document identifying the prior art. It does not matter if a judge or jury has not considered or ruled on the prior art - the patentee must submit the documents. Again, the patentee would be given a set period of time (1 month, with extensions) to make the submission.

(3) All final copies of Markman briefs submitted to the court, as well as any Markman ruling, must be filed with the USPTO within 2 months (with extensions). "Final" version means either (a) the latest copy, if the case was subsequently settled, or (b) the version containing the last-entered amendments prior to the Markman hearing.

How the disclosures would be used by the USPTO:

As mentioned earlier, when you pull up a specific patent on the USPTO web site, a tab would be provided for "post-issue activity." Once it is clicked, you would be provided with two options: (1) litigation activity, and (2) post-issue prior art. Clicking the first option would provide a list of all the litigation that has been filed on the patent, along with a link to any/all of the Markman documents. Clicking the second option would provide a hyperlinked list of all the prior art, similar to the current listing the USPTO provides on the website.

The USPTO would only be charged with processing and maintaining these documents, and making sure they correctly display the information on the USPTO website. No examiners would be involved in reviewing the prior art documents.

How the proposal will be enforced:

While I haven't slogged through the finer details of this part yet, the only way for this proposal to work would be to attach some form of inequitable conduct or even a patent misuse ramification for failing to comply. By not providing the required "notice to the public" regarding your post-issue activities, you either (1) lose the right to collect damages while the defect is present, or (2) lose the right to sue a named defendant altogether, if proper prior notice wasn't given to the USPTO. Since these areas are not really codified in the U.S.C. (i.e., this is mostly court-made law), there would have to be some additional laws drafted to cover this aspect.

With regard to the filings in the USPTO, this could be handled through the USPTO fee schedule. Thus, if a patentee intends to hold back information to try and prejudice potential defendants (by filing the documents in the last minute, and then suing), the USPTO can set up an arrangement where, for example, the patentee would be charged $500 a month after the filing due date up to three months, $1,000 a month from 3-6 months, and $5,000 a month thereafter. By matching the court document with the filing date, the USPTO could easily determine the time lag between the date of disclosure and the submission date to the USPTO.

What are the benefits?

The primary benefit of this is information consolidation. All of the aforementioned information is already available for anyone that wants to go dig for it. However, collecting and processing the information can be time consuming and can get really expensive, depending on how actively a patent is being litigated. By making this information centrally available through a web portal, just about anyone having some knowledge of patents can quickly assess (1) how aggressive the patentee is, (2) the types of companies that are being targeted, (3) whether the lawsuits are settled quickly, (4) How the claim language is being interpreted, and (5) the quantity and quality of prior art that was found after the patent issued.

Furthermore, the burden and cost of implementing this proposal falls mostly on the litigant, but is relatively painless to comply with. As a practical matter, all the patentee has to do is make a copy of the relevant documents, provide a "post-issue IDS" if necessary, and mail it off to the USPTO. While I doubt the collected USPTO fees will be sufficient to cover the cost of reorganizing the USPTO servers and databases, I think the cost-to-benefit analysis still comes out strongly in favor of the proposal.

Another benefit is that this proposal incorporates all the "floating" prior art that results when cases are settled during litigation (which is the overwhelming majority of patent cases). By forcing these documents into the USPTO, the public gets a collective state-of-the-art snapshot that "runs with the patent" so to speak. And the more you litigate, the greater the likelihood will be that potentially damaging prior art will surface. If your patent is as strong as yout think it is, you won't have problems. But if you try to repeatedly enforce a dodgy patent, it is likely that the prior art will eventually (and quickly) catch up with you.

Reexamination practice could be energized by this as well. Since the current and "best" prior art is associated with, and displayed alongside the patent, you could determine whether a particular patent is ripe for reexamination. Since the post-issue prior art was presumably reviewed by one or more patent attorneys prior to being submitted in court, there is at least some assurance that the quality of the prior art is relatively high. This could also provide incentive for the USPTO Director to unilaterally issue reexams without unduly taxing examiner resources.

Furthermore, by allowing people to build off of previous defendants prior-art searching and work product, this could provide significant savings to smaller companies, who won't necessarily have to rebuild the wheel when facing potential litigation. This could also reduce the time for researching patents for opinion work as well. Finding invalidating art is one of the most important and difficult aspects of patent litigation - by streamlining this process to the USPTO, companies could have an important tool to quickly assess the post-issue activities of a patent without dispatching armies of lawyers every time they get a demand letter.

Again, this post identifies a concept that is obviously a work in progress. I'm sure there are aspects of this that I haven't considered completely yet. However, many of the people I've bounced this idea off of have been very receptive. If you have any thoughts on this topic (good or bad), I'd like to hear from you. Feel free to e-mail me:

P.S. I have no intention of filing a patent application on this . . .

1 Comentário:

Anonymous said...

I disagree. Extending the duty of candor to post-grant activity would upset the adversarial system in infringement litigation. The defendant has aninterest to undermine the patent, and the patentee would then have a duty to help them, under penalty of unenforceabilty for failing that duty. More importantly, like inequitable conduct, it would provide another perenial canard to be trotted out by copyists.

Following current IC caselaw, I can easily image allegations to strip a patentee of their rights by failing to disclose this or that paper coauthored by a scientist that the inventor attended the same conference with (amomg thousands of others) at some indetermiante point during the 20 years term of the patent. More importantly, merely opening the avenue would increase litigation costs out of all proportion to the neglible benefit to be obtained.


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