Thursday, September 25, 2008

New Patent Reform Bill Introduced In Senate (Seriously!)

"And I beheld when he had opened the sixth seal, and, lo, there was a great earthquake; and the sun became black as sackcloth of hair, and the moon became as blood"

-- Revelation 6:12


As the Horsemen of the Apocalypse plod through the financial markets, Congress, suffices to say, has has a rough patch heading into the final days of the current Session of Congress. So it came as quite a surprise (at least to yours truly) that Senate Minority Whip Jon Kyl (R-AZ) introduced the latest Patent Reform Act last night.

Early reports indicate that the bill "departs substantially from the one sponsored by Judiciary Chairman Patrick Leahy and Sen. Orrin Hatch, R-Utah. The Kyl bill resulted from months of meetings with critics of the Leahy language."

Interestingly, members from the Coalition for Patent Fairness were absent from the talks leading to the latest version of the bill. While there is practically zero chance that this bill will pass in the current session, members of the Senate continue to stress that patent reform will be a "top priority" for 2009.


In short, the bill:

- Increases PTO authority on a number of administrative fronts (money, etc.).

- Introduces "applicant quality controls" (i.e., prior art search w/ analysis), but does not make them mandatory. Instead, section 123 of the bill provides that "the Director may, by regulation, offer incentives to applicants who submit a search report, a patentability analysis, or other information relevant to patentability."

- Modifies inequitable conduct, so that, if inequitable conduct is found during litigation, a court order must contain "findings of fact setting out with specificity the information relating to the conduct at issue not previously considered by the Director and upon which the court based its order." The patentee then would have to file a reissue within 2 months thereafter, and take the matter up with the PTO. If there is "probable cause" that inequitable conduct has occurred, the Director will be authorized to impose civil sanctions of up to $150,000 for each act of misconduct, or up to $1M for a "pattern of misconduct."

- Provides a 9-month "first window" for opposition, where issues related to 35 USC 101-103 AND 112 may be considered. No "lawsuit threat" showing is required for oppositions.

- Provides a "second window" for opposition, where only 102 or 103 considerations based on patents or printed publications will be allowed.

- Applies post-opposition estoppel to any subsequent litigation.

- Requires economic analysis for determining damages. Subject to specific exemptions, "the amount of a reasonable royalty shall not be determined by the use of a standard or average ratio for the division of profits, an industry average rate for royalties, or other methods that
are not based on the particular benefits or advantages of the use of the invention."

- Includes a "Check 21" exception: "With respect to the use by a financial institution of a check collection system that constitutes an infringement under subsection (a) or (b) of section 271, the provisions of sections 281, 283, 284, and 285 shall not apply against the financial institution with respect to such a check collection system."

Read/download a copy of the latest draft here, courtesy of Hal Wegner.

3 Comentários:

Anonymous said...

Looks like a bit of a dog's breakfast to me. Grace periods don't fit with First to File. There's a very good reason why post-issue inter partes examination of 112 issues is not a feature of opopositions in Europe. Was there ever a patent ever issued anywhere any time that was 100% clear? The European Convention, a common law/civil law compromise between, on the one hand, English (India) patent law and, on the other hand, the German patent law that Japan and China use, serves the rest of the world very well. The USA should either sign up to that, or stay with its own different FTI model, and work on perfecting that. There is no workable half way house. Time will tell.

datat said...

(IS THERE ANYONE OUT THERE THAT CAN, LOGICALLY, EXPLAIN WHY A" CHECK 21" EXCEPTION SHOULD BE GRANTED TO FINANCIAL INSTITUTIONS?) BANKS HAVE DECIDED THAT THEY ARE ABOVE THE EXISTING PATENT LAWS. WELL PERHAPS NOT ABOVE THE LAW, THEY JUST DON`T LIKE PATENT LAWS AS THEY NOW EXISTS. NOW THEY`RE MAKING ANOTHER ATTEMPT TO BUY NEW LEGISLATION. SEN. JEFF SESSIONS WITHDREW HIS AMENDMENT, ATTACHED TO A PREVIOUS PATENT REFORM BILL, THAT WAS DESIGNED TO EXEMPT BANKS FROM PATENT INFRINGEMENT . THIS AMENDMENT WAS, ADMITTEDLY, DEEMED TO BE UNCONSTITUTIONAL AND WAS WITHDRAWN BY THE SENATOR HIMSELF. HAD THIS LEGISLATION PASSED, THE RESPONSIBILITY FOR THE BANKS ILLEGAL INFRINGEMENT WOULD HAVE BEEN PASSED ON TO THE GENERAL TAX PAYER. WE`RE TALKING ABOUT BILLIONS OF DOLLARS TO BAIL OUT BANKS FOR ILLEGALLY INFRINGING A NUMBER OF VALID UNITED STATES PATENTS. THE FINANCIAL INSTITUTIONS ARE ONCE AGAIN, ATTEMPTING TO BUY A (GET OUT OF JAIL FREE CARD.) OUR LEGISLATORS ARE ELECTED TO REPRESENT US, NOT SELL US OUT TO FINANCIAL INSTITUTIONS.

Anonymous said...

Senator Kyle by championing this exception should be made (with a clear answer devoid of spin) to explain why exactly, banks should be immune to patent law that applies to everybody else and why the public should fund any patent royalties when infringing returns billions in operational savings to the banks !!
The funny part about this campaign is that everybody will take a sudden, but belated, interest in this fiasco if and when the bill comes due and has to be paid by the American taxpayer. All this on the heels of the recent Wall Street bailout. I guess business as usual is still the main diet of some elected officials!! DISGRACEFUL!!!

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