Ex-PTO Commisioners Weigh in on Patent Reform

Former Commissioners Gerald Mossinghoff & Stephen Kunin are preparing a position paper on various parts of the Patent Reform Act of 2007. In general, they support many of the provisions of the Act, while expressing their reservations on other provisions. Nevertheless, the authors comment that "[t]he time for fair compromises that provide these fixes is now. Too much is at stake to delay."

Sponsored by the 21st Century Coalition, the paper is quite balanced, and holds a mainstream position on all the covered topics (whether or not you personally agree with them). It's a great read for anyone looking to get a fair rundown on all the issues surrounding patent reform (I am told a copy will be sent to the editorial board at The Financial Times - wink, wink )

What follows are excerpts from the paper on selected topics:

First to file:

In 2005, the USPTO did a study of whether the first-to-invent rule advantaged or disadvantaged small entities. Using data from 1983 — when the small-entity status was first defined — through 2004, the USPTO found that the number of small entities disadvantaged by the first-to-invent rule was slightly higher (289) than those advantaged (286).

[T]he USPTO cannot practically hope to handle its workload without effective work-sharing with other patent offices, particularly the European Patent Office and the Japan Patent Office. And such work sharing will not be possible if the U.S. continues to be isolated with an outdated first-to-invent system of priority.

[O]f all of the key recommendations of the NAS that requires legislation, it is our firm opinion that establishing a first-inventor-to-file priority in the U.S. should be at the top of the list.

Post-Grant Review

Although the authors recognize that meritorious arguments can be made on both sides of the issue, we would favor the House-passed Single Window and urge the retention of Inter Partes Reexaminations. The one-year time limit creates a fixed period in which to challenge granted patents on all conditions of patentability and provides incentives for competitors to do so. Conditions of patentability depending upon a search of published patents or publications could then be handled through Inter Partes Reexaminations at any time during a patent’s life. Moreover, until there are iron-clad assurances that diversions of USPTO fee income to unrelated Federal programs will not occur, there is a realistic fear that subjecting the 1.7 million U.S. patents now in force to a “Second Window” Post-Grant Review could result in disastrous resource and administrative problems for the USPTO and the U.S. patent system.

Inequitable Conduct

If full elimination of [the inequitable conduct] defense is not undertaken, Congress should consider at least a “safe harbor” that would apply to valid patents. Under such a “safe harbor,” unless at least one claim of a patent is invalidated by the court, the patent should be immune from any allegations in patent infringement lawsuits that the valid patent was wrongfully obtained through “inequitable conduct.”

Apportionment of Damages

Although intended to guard against allegedly inflated damage awards, this mandatory apportionment test would represent a dramatic departure from the market-based principles that currently govern damages calculations, opponents say. Even worse, it would result in unpredictable and artificially low damages awards for the majority of patents, no matter how inherently valuable they might be. Opponents further argue that this change would undermine existing licenses and encourage an increase in litigation. Existing and potential licensees would see little downside to “rolling the dice” in court before taking a license.

Venue

It is the authors’ view that changes to the venue provisions are not needed at this time. The popularity or consternation about filing patent cases in certain judicial districts waxes and wanes over time. The popularity of the Eastern District of Virginia’s “rocket docket” has faded in the past several years, while the popularity of the Eastern District of Texas grew. Also, certain jurisdictions will always have a disproportional number of patent cases due to the predominance of intellectual property-based industries in that judicial district, which no reasonable modifications to the patent venue provisions would alter. If the Congress determines that changes to the patent venue provisions are warranted, then the authors suggest that there be parity between the venues available to patentees and to alleged infringers.

Interlocutory Appeals

It is unproven that the benefits of interlocutory appeals of Markman orders, as the proponents argue, would actually be realized. Perhaps, the better approach to addressing the perceived problem of larger numbers of Markman reversals would be
to give district court judges’ claim construction determinations greater deference at the Federal Circuit.

Willful Infringement

Given the Federal Circuit’s en banc holding in Seagate, it is the authors’ view that the problems articulated by the NAS have been effectively addressed by the judiciary, and that there is no need for legislation, which at this point would only interrupt and confuse an orderly development of common law based upon Seagate.

Read the paper in its entirety here (link), courtesy of Greg Aharonian.