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Stop me if you've heard this before: There’s a Patent Reform Act of 2011
March 2011
SHARING OPTIONS:
Sens. Patrick Leahy, Orrin Hatch and Chuck Grassley have
introduced the Patent Reform Act of 2011, which is now called the “America
Invents Act of 2011.” The provisions and language of the bill look a lot like
items in the long-pending legislation that were part of a compromise that was
announced last Congress.
Sen. Leahy said the new legislation is intended to
accomplish three primary goals: (1) transition to a first-to-file system; (2)
improve patent quality; and (3) provide more certainty in litigation.
First-to-file system
Similar to previous patent reform bills, the Patent Reform
Act of 2011 proposes to change the U.S. patent system from a first-to-invent to
a first-to file system in an effort to harmonize the U.S. patent system with
those of other countries. The new first-to-file system will award patents to
the earliest-filed application for a claimed invention, as well as provide
inventors with a one-year grace period to file an application after public
disclosure of the claimed invention by the inventors.
Patent damages
The Act is intended to provide more certainty in damages
calculations and enhanced damages.
Specifically, the Act includes a rigorous gatekeeping role for the
court, pursuant to which judges will assess the legal basis for the specific
damages theories and jury instructions sought by the parties.
In addition, the Act improves the law of willfulness and
enhanced damages. It codifies the case law that holds that a defendant may only
be found to have willfully infringed a patent if the plaintiff demonstrates by
clear and convincing evidence that the infringer acted with objective
recklessness and the objectively defined risk was either known or so obvious
that it should have been known b y the infringer.
False marking
Similar to last year’s compromise legislation, the Patent
Reform Act of 2011 also proposes to impose more restrictive requirements on who
has standing to bring a claim for false marking under 35 U.S.C. §292. Under the
proposed legislation, false marking cases will only be allowed if filed by
persons who have actually been harmed by the alleged misconduct. False marking
cases would also include a statute of limitations that limits the time to file
such cases to 10 years after the alleged misconduct, or one year after the
plaintiff in this action became aware of the alleged misconduct.
Post-grant review procedures
The Patent Reform Act of 2011 also includes a revised “inter
partes review” procedure and a new
“post-grant review” procedure. The inter partes review procedure includes proposed procedural
changes that are intended to shorten the review time for most reviews to 12
months and are conducted by administrative patent judges. The challenge will be
heard by a panel of three administrative patent judges, and its decision is
appealable directly to the Federal Circuit.
The new post-grant review procedure allows petitioners to
challenge the validity of issued claims on any ground of patentability. The Act
includes a “reasonably could have raised” estoppel standard, preventing a
challenger from raising in court only an argument that reasonably could have
been raised during an inter partes
review that the challenger instituted.
Additional provisions
Similar to the versions proposed in past years, the Patent
Reform Act of 2011 also proposes changes directed to the following:
-
Allowing
third parties to submit and explain prior art, and other pertinent
information concerning claim construction, for consideration by the patent
examiner
Removal
of residency restrictions on Federal Circuit judges
-
Elimination
of failure to disclose best mode as an infringement defense
-
Creation
of a “supplemental examination” procedure to cure potential inequitable
conduct
- Fee-setting
authority granted to the U.S. Patent and Trademark Office (USPTO)
In addition, the Act contains a specific provision
precluding the issuance of any patent claims containing subject matter directed
to tax strategies.
So, is it good for American inventors or bad? It depends on
whose interest is at stake. Some have argued that it is unfavorable to small
businesses, start-up entrepreneurs, independent inventors and those companies’
employees in the United States.
There is a fear that a change to the “first inventor to
file” with a change to the filing grace period will disadvantage small
companies and independent inventors in favor of larger firms that can arrange
all of their investment, testing, manufacturing and marketing internally.
However, there is evidence that individual inventors assert
invention-date-based novelty rights relatively less often and less successfully
than large, publicly traded companies. Therefore, small entities may not know
what’s best for themselves.
The Act is still being argued, and amendments are being
proposed, so don’t count out any surprises.
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