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Patent Reform - If Your Head Hurt Before . . . - UPDATED
Monday, June 27 2011 @ 09:00 AM EDT

In case you happened to miss it (this story has only been dragging on for eight plus years, so it is easy to understand if you did miss it), H.R. 1249 [PDF], the Leahy-Smith America Invents Act, passed the U.S. House of Representatives last Thursday and will now go to a Senate/House conference committee to work out the differences with S. 23 [PDF], the sister bill that passed the U.S. Senate back in March. What is interesting is that, after all of this long anticipation, the resulting bill is now coming under fire, but not by BigPharma or the IT industry. Rather, it is coming under fire from a number of academics who have made a career of studying our patent system, and they think the bill is a disaster.

First, we hear the following from the esteemed Dennis Crouch, editor and publisher of Patently-O. Dennis, only partly tongue-in-cheek, states: "The litigation involving the interpretation of the many new provisions of the Bill will occupy Patently-O posts for at least the next decade." And then we read a rather lengthy and critical article from John Duffy, professor of law and patent expert at George Washington University School of Law, entitled, "The Big Government Patent Bill." Prof. Duffy excoriates the bill for doing not much more than adding layer after layer of new bureaucracy onto the USPTO without actually addressing the underlying problems the "fixes" are intended to address. And where are most of those "fixes" aimed? At addressing the reexamination of patents that contain claims that likely should have never been allowed.

Doesn't it make more sense to focus and invest on achieving thorough examinations in the first place? Well, yes, it does, but there are serious interests out there that really don't want that to happen. Why? Because regardless of whether a claim is ultimately found valid, a patent has value by its mere existence because of the high cost of patent litigation. This legislation is not going to fix that problem.

So what are the key changes? Here is a brief summary of what the Senate bill contains and how the House bill differs:

  • First to File - The U.S. would change from a first to invent to a first to file system, theoretically conforming to the model used by most of the rest of the world. However, the U.S. would not totally abandon all of its differences. For example, under the current system an inventor has a one-year period from the first public disclosure of the invention in which to file in the U.S. without the invention being declared in the public domain. That one-year grace period remains in place under S.23. What happens if someone else can show they invented first? They are out of luck unless they can show that the first filing party "derived" their invention from the first inventor. This is the so-called derivation proceeding which will replace what is now known as an interference proceeding. For a more thorough discussion of this change, see this analysis by Prof. Ann McCrackin and students Stephen Brodsky, and Amrita Chiluwal from the Univ. of New Hampshire School of Law.
  • Reexaminations/Reviews - The current ex parte reexamination procedure would be retained. The inter partes reexamination procedure would be bifurcated into two different procedures: an inter partes review and a post-grant review. The inter partes review would be limited to prior art evidence in the form of printed publications or patents (devices would no longer satisfy the evidence requirement). An inter partes review could not be initiated earlier than nine months following the issuance of the patent or the following the end of any post-grant review. The inter partes review would also be limited to issues of novelty or obviousness. Finally, an inter partes review must be initiated, if at all, no later than six months following the serving of a complaint alleging infringement of the patent in question. By contrast with the inter partes review, a post-grant review may only occur within nine (H.R.1249 changes this to 12) months of the issuance of a patent. The grounds for contesting the patent under the post-grant review are broader than those under the inter partes review.
  • False Marking - The heyday of the false marking law suit by specialty law firms would be over. Only the government or a competitor would be allowed to bring a suit for false marking.
  • Prior Use Defense - Under current law a party who has practiced a method claimed in a patent before the effective date of the patent may assert prior use as a defense to an assertion of infringement. Under H.R.1249, that prior use defense would be extended to all claims, not just method claims.
  • Third Party Submissions - The act would permit the USPTO to ease its present formalities around third-party prior art submissions, effectively allowing the USPTO to directly implement a Peer To Patent-type system.
  • Fee Setting and Budget - The act would allow the USPTO greater freedom in setting its fees, but one of the key differences between S.23 and H.R.1249 is budgetary authority. S.23 would set the USPTO up largely as a self-funding agency with no Congressional oversight of its budget. The House has balked at that approach and would still require the USPTO to obtain an annual appropriation, thus allowing Congress to continue to siphon off filing and maintenance fees for other federal government activities.



My apologies for throwing around some terms that deserve explanation or definition. So here are some definitions for some of the terms used above:

  • Ex parte - On one side only; by or for one party; done for, in behalf of, or on the application of, one party only. A third party may petition for an ex parte reexamination and file the prior art with that petition, but once accepted by the USPTO that third party is no longer permitted to participate in the reexamination proceedings. The cost of filing an ex parte request is less than that of filing an inter partes request.
  • Inter partes - Between parties. A third party may petition for an inter partes reexamination and file the prior art with that petition. If the USPTO accepts the petition and orders the reexamination, that third party may continue to participate in the reexamination proceedings. The cost of filing an inter partes request is more than three times that of filing an ex parte request.
  • Bifurcate - To divide or fork into two branches.
  • I hope this helps. Never hesitate to ask for an explanation of legal terms that are not clear.


Patent Reform - If Your Head Hurt Before . . . - UPDATED | 79 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Academics vs BigIndustry?
Authored by: IMANAL_TOO on Monday, June 27 2011 @ 09:09 AM EDT
"Rather, it is coming under fire from a number of academics who have made a
career of studying our patent system, and they think the bill is a

Hmmm. What is the US law makers' perception of academics vs BigIndustry? My gut
feeling says that these academics need to find the BigIndustry that doesn't like
patents and make joint statements.

BTW, which parts of the BigIndustry doesn't like patents? And, could they be
persuaded to join?



[ Reply to This | # ]

Authored by: ankylosaurus on Monday, June 27 2011 @ 09:13 AM EDT
It is often helpful to use the format 'Mistake --> Correct' in the title.

The Dinosaur with a Club at the End of its Tail

[ Reply to This | # ]

Off-topic Discussions
Authored by: ankylosaurus on Monday, June 27 2011 @ 09:15 AM EDT
For the discussion of matters not directly related to this article.

The Dinosaur with a Club at the End of its Tail

[ Reply to This | # ]

News Picks
Authored by: ankylosaurus on Monday, June 27 2011 @ 09:16 AM EDT
Discussion about items in the News Picks section of the Groklaw home page.

The Dinosaur with a Club at the End of its Tail

[ Reply to This | # ]

(devices would no longer satisfy the evidence requirement)
Authored by: maroberts on Monday, June 27 2011 @ 10:40 AM EDT
That would have been terribly inconvenient for Red Hat when they used someones
Amiga. What is the thinking behind this??

[ Reply to This | # ]

First to Invent
Authored by: Anonymous on Monday, June 27 2011 @ 10:57 AM EDT

A big concern of mine is that with the relaxation of the first to invent principle, someone can claim the invention on the first to file basis. This has three drawbacks:

1. If I'm investing money in an invention, and have a competition, this just weakened my competitive position considerably.
2. If I invent something, and discuss it openly, but not publish it in a journal, then someone can come along and patent my invention. Think of GPL projects.
3. It's fair game to patent something that already exists, bluff the patent examiner, and cause trouble.

Does anyone know why the claims for prior art have been weakened, instead of expanded?

[ Reply to This | # ]

Patent Reform - If Your Head Hurt Before . . .
Authored by: Ian Al on Monday, June 27 2011 @ 11:29 AM EDT
The inter partes review would be limited to prior art evidence in the form of printed publications or patents (devices would no longer satisfy the evidence requirement).
I have the problem that I don't know when an inter partes review is appropriate. However, does this mean that even if there is a working device example of prior art, it is not admissible? And, in the current situation of publishing using the internet, does 'printed publications' really mean ink on paper? I cannot see any justification for this situation. If there is any evidence, no matter what, that the 'invention' had already been invented, why should this not invalidate the patent?

Ian Al
OK, Just one more article and then I'll seek help.

[ Reply to This | # ]

Patent Reform - If Your Head Hurt Before . . .
Authored by: wood gnome on Monday, June 27 2011 @ 11:53 AM EDT
It's gonna explode shortly, if this bill passes. The US will turn into a
3rd-world like litigation morass, with one half of the lawyer population suing
the other half. Patent lawyering will be big business for the years to come, but
the economy as a whole will suffer immensely. Too bad...

[ Reply to This | # ]

Patent Reform - If Your Head Hurt Before . . .
Authored by: Anonymous on Monday, June 27 2011 @ 12:23 PM EDT
First to file sounds like sanctioned claim jumping to me.

So I come up with a great invention but can't afford to file. An evil
corporation sees my work, files for a patent then sues me for using my own

I give up. This world IS too evil to care about any more.

[ Reply to This | # ]

Patent Reform - If Your Head Hurt Before . . .
Authored by: BJ on Monday, June 27 2011 @ 02:02 PM EDT
About this whole patent mess in the US and Europe -- there's one thing that's
encouraging: soon China will make it all moot.

I for one can hardly wait the day when big 'patent' holders and patent trolls
will be given a run for their money. Ah-hahahaha!!!


[ Reply to This | # ]

  • Wait? - Authored by: Anonymous on Monday, June 27 2011 @ 06:00 PM EDT
Prior use defense
Authored by: Anonymous on Monday, June 27 2011 @ 07:57 PM EDT
The prior use defense sounds like it could cause some weird outcomes. E.g.
medium sized company A patents something. Small company B has been doing it for
some time, and has a solid prior use defense. Big company C wants to do
patented-thing without paying A, so they buy company B to inherit the exemption.
Would this work?

Alternatively, if the law is much more restrictive on what you can transfer your
prior use immunity to, we could see company B has prior use in their video
player, but want to use patented-thing in their database software, so they
'enhance' their video player to also be a database, but 99% of the value is the
database software, the video player is only still there for legal reasons.

[ Reply to This | # ]

How to achieve thorough examinations?
Authored by: Anonymous on Tuesday, June 28 2011 @ 05:49 AM EDT

Mark asks the following question:

Doesn't it make more sense to focus and invest on achieving thorough examinations in the first place?

Assuming this is a serious question, the logical follow-up would be to ask how that might actually be accomplished given the real constraints under which the USPTO must operate. One such constraint is that even though the agency is required to be self-sufficient in funding its activities from the fees it collects, Congress has been reported in recent years to have siphoned off over $1 billion dollars in collected fees for other purposes. Loss of these funds prevents the USPTO from adding needed additional resources to an overburdened staff and doing needed modernization of antiquated systems. The Senate version of the bill contained a provision that would have protected use of USPTO fees for use by the agency to do its job, but House Republican leaders added a provision to the House version which preserves Congress's power to continue siphoning off fees whenever it wishes.

Besides the previously discussed new processes that allow third parties to challenge patent awards at less cost than going to court, the Act also provides a provision in Section 8 concerning preissuance submissions by third parties.

(1) IN GENERAL.—Any third party may submit for consideration and inclusion in the record of a patent application, any patent, published patent application, or other printed publication of potential relevance to the examination of the application, if such submission is made in writing before the earlier of—
(A) the date a notice of allowance under section 151 is given or mailed in the application for patent; or

(B) the later of—
(i) 6 months after the date on which the application for patent is first published under section 122 by the Office, or

(ii) the date of the first rejection under section 132 of any claim by the examiner during the examination of the application for patent.
(2) OTHER REQUIREMENTS.—Any submission under paragraph (1) shall—
(A) set forth a concise description of the asserted relevance of each submitted document;

(B) be accompanied by such fee as the Director may prescribe; and

(C) include a statement by the person making such submission affirming that the submission was made in compliance with this section.

The above provisions all seem to be intended to do something about the problems with the USPTO being able to do more thorough examinations in the first place, and to provide extra avenues for weeding out bad patents before they get to the most expensive litigation stage. The investing part you mention can only come about if Congress learns to keep its fingers off fee proceeds that by all rights should have been going into the system all these years.

Will these measures by themselves make the U.S. patent system an ideal one? Not even close. But the realities of the situation we find ourselves in pretty much rules out an ideal system ever being adopted, even in the unlikely event anyone could describe what such a utopian system might look like. There is some truth in the old saying that the perfect is the enemy of the good. With any kind of meaningful reform having been mired for years in legislative limbo, any kind of progress shouldn't be overlooked.


[ Reply to This | # ]

Easing your hurting head
Authored by: Anonymous on Tuesday, June 28 2011 @ 06:27 AM EDT

For a pretty good explanation of the different provisions in the Senate version of the America Invents Act, as well as some pertinent discussion about the U.S. patent system and innovation, you can read this report from the Congressional Research Service:

Patent Reform in the 112th Congress: Innovation Issues


[ Reply to This | # ]

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