Summary of the Committee Print of the Patent Act of 2005
April 20, 2005. The House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property held a hearing titled "Oversight Hearing on Committee Print Regarding Patent Quality Improvement". The Subcommittee discussed, and heard testimony on, the Committee Print of HR __ [52 pages in PDF], the "Patent Act of 2005".
The Committee Print would, among other things, provide a first inventor to file rule, create a duty of candor, and create an administrative post grant opposition process. It would eliminate the best mode requirement, and make it harder to recover treble damages and obtain injunctive relief. It would also require the publication of almost all patent applications after 18 months.
The Subcommittee heard testimony from four witnesses. See, prepared testimony [22 pages in PDF] of Jeffrey Hawley (Eastman Kodak, on behalf of the Intellectual Property Owners Association), prepared testimony of Richard Lutton (Apple, on behalf of the Business Software Alliance), prepared testimony of Jeffrey Kushan (Sidley Austin, on behalf of Genetech), and prepared testimony [pages in PDF] of William LaFuze (Vinson & Elkins, on behalf of the ABA).
The Committee Print includes some of the provisions of prior bills, such as HR 5299 (108th Congress), the "Patent Quality Assistance Act of 2004", which was sponsored by Rep. Howard Berman (D-CA) and Rep. Rick Boucher (D-VA). See also, story titled "Berman and Boucher Introduce Bill to Provide for Post Grants Reviews of Patents" in TLJ Daily E-Mail Alert No. 999, October 19, 2004.
Likewise, the Committee Print addresses some, but not all, of the issues raised in some recent and lengthy reports that make recommendations for changes to patent law and procedure. Among these are the Federal Trade Commission's (FTC) October 28, 2003, report titled "To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy" (see, Executive Summary [18 pages in PDF] and Report [2.28 MB in PDF]); the National Academies' Board on Science, Technology, and Economic Policy (STEP) report titled "A Patent System for the 21st Century" (see also 171 page in paperback version sold by Amazon); the American Intellectual Property Law Association's (AIPLA) report [49 pages in PDF] titled "AIPLA Response to the National Academies Report entitled ``A Patent System for the 21st Century´´"; and the American Bar Association's (ABA) Section of Intellectual Property Law report titled "Response to the Recommendations of the National Research Council of the National Academies on ``A 21st Century Patent System´´".
The following is a brief, first glance, section by section summary of the contents of the Committee Print.
First Inventor to File. The Committee Print provides for a "first inventor to file" rule. It accomplishes this by amending 35 U.S.C. § 100, which is the definitional section for Chapter 10 of the Patent Act, which pertains to patentability of inventions. See, Committee Print, § 3(a), at pages 2-3.
It adds the following language:
"(f) The term `inventor´ means the person or persons who invented the
subject matter of the invention.
(g) The terms `joint inventor´ and `coinventor´ mean one of the persons who invented the subject matter of the invention.
(h) The `effective filing date´ of a claimed invention is--
(1) the filing date of the patent or the application for patent containing the claim; or
(2) if the patent or application for patent is entitled to a right of priority of any other application under section 119 or section 365(a) or to the benefit of an earlier filing date in the United States"
This changes the first to invent procedure. The recent history of debates in the House over patent reform proposals suggests that this proposal may generate controversy and opposition.
Rewrite of § 102. The Committee Print substantially rewrites 35 U.S.C. § 102, regarding conditions for patentability and prior art. See, Committee Print, § 3(b), at pages 3-5.
One reason for rewriting this section is to make this section compatible with the section of the bill which shifts to the first inventor to file system.
The new section is as follows:
"(a) NOVELTY; PRIOR ART. -- A patent for a claimed invention may not be
(1)(A) the claimed invention was patented, described in a printed publication, or otherwise known more than one year before the effective filing date of the claimed invention; or
(B) the claimed invention was patented, described in a printed publication, or otherwise known before the effective filing date of the claimed invention, other than through disclosures made by the inventor or by others who obtained the subject matter disclosed directly or indirectly from the inventor; or
(2) the claimed invention was described in a patent issued under section 151, or in an application for patent published under section 122(b), in a case in which the application or the patent names another inventor and the application was effectively filed before the effective filing date of the claimed invention.
"(b) COMMONLY ASSIGNED INVENTION EXCEPTION. -- Subject matter developed by a person other than the inventor that would have qualified as prior art under subsection (a)(2) but not under subsection (a)(1) shall not be prior art to a claimed invention if the subject matter and the claimed invention were, not later than the effective filing date of the claimed invention, owned by the same person or subject to an obligation of assignment to the same person."
"(c) REASONABLE AND EFFECTIVE ACCESSIBILITY REQUIREMENT.
(1) IN GENERAL. -- For the purposes of subsection (a)(1), subject matter is known when it becomes reasonably and effectively accessible, either through its use or through its disclosure by other means, or when it has been made inherently known from subject matter that has become reasonably and effectively accessible.
(2) REASONABLY AND EFFECTIVELY ACCESSIBLE. In this section, subject matter is ‘reasonably and effectively accessible’ if the subject matter can be accessed and comprehended, without resort to undue efforts, by persons of ordinary skill in the art to which the subject matter pertains."
"(d) PATENTS AND PUBLISHED APPLICATIONS EFFECTIVELY FILED. -- A patent or
application for patent is effectively filed under subsection (a)(2) with respect
to any subject matter described in the patent or application--
(1) as of the filing date of the patent or the application for patent; or
(2) if the patent or application for patent is entitled to a right of priority of any other application under section 119 or 365(a) or to the benefit of an earlier filing date in the United States under section 120, 121, or 365(c) based upon one or more prior filed applications for patent, as of the filing date of the earliest such application in which the claimed invention is disclosed in the manner provided by section 112."
Amendment to § 103. The Committee Print amends 35 U.S.C. § 103, regarding conditions for patentability and non-obviousness. This change pertains to accommodating the change to a first inventor to file system. See, Committee Print, § 3(c), at pages 5-6.
Repeal of § 104. The Committee Print repeals 35 U.S.C. § 104, regarding inventions made abroad. See, Committee Print, § 3(d), at page 6.
Repeal of § 157. The Committee Print repeals 35 U.S.C. § 157, regarding invention registration. See, Committee Print, § 3(d), at page 6.
Amendment of § 120. The Committee Print amends 35 U.S.C. § 120 with respect to the earlier filing date for inventor and joint inventor. See, Committee Print, § 3(f), at page 6.
Repeal of § 291. The Committee Print repeals 35 U.S.C. § 291, regarding interfering patent remedies. See, Committee Print, § 3(h), at page 7.
Revision of § 135. The Committee Print also rewrites 35 U.S.C. § 135(a), regarding institution of interferences. See, Committee Print, § 3(i), at page 7-8.
Patentable Subject Matter. 35 U.S.C. § 101 currently provides that "Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title." The Committee Print would replace this with "The inventor of any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, has the right to apply for and to obtain a patent for the invention, subject to the conditions and requirements of this title." See, Committee Print, § 4(a), at page 9.
Filing by Other Than Inventor. The Committee Print rewrites 35 U.S.C. § 118. See, Committee Print, § 4(a), at pages 9-10. The new language provides, in part, that "A person to whom the inventor has assigned or is under an obligation to assign the invention may make an application for patent."
Elimination of Best Mode Requirement. This is a short, but critical, change. The Committee Print revises 35 U.S.C. § 112 by removing the clause "and shall set forth the best mode contemplated by the inventor of carrying out his invention". See, Committee Print, § 4(d), at page 10.
Proponents of this change state that this will have the effect of eliminating a subjective element in patent litigation, thereby reducing litigation costs, and increasing the predictability of litigation.
Duty of Candor. The Committee Print includes a lengthy section that imposes duties of candor on persons associated with the filing and prosecution of patents, and persons adverse to patent applications. See, Committee Print, § 5, at pages 10-29.
First, the Committee Print adds a new section to the Patent Act that imposes a duty of candor. It creates a new § 136 that provides, in part, that the USPTO shall promulgate regulations that "impose a duty of candor and good faith on individuals associated with the filing and prosecution of an application for patent and on individuals assisting a patent owner in proceedings before the Office involving a patent."
It further provides, in part, that "The duty shall require each such individual to timely disclose information known to that individual to be material to any issue before the Office in connection with the application or patent, and to not materially misrepresent information."
It further provides that if the Director of USPTO finds that an individual who owes a duty of candor and breached that duty, then that shall constitute "misconduct". The consequences of such a finding include that "A patent may be held unenforceable". The new section also sets out other consequences.
It also provides that no court or other state or federal government entity, other than the USPTO, "may investigate or make a determination or an adjudication with respect to an alleged violation of the duty of candor and good faith". See, Committee Print at pages 10-26.
Second, the Committee Print adds a separate new section to the Patent Act that imposes a duty of candor on parties adverse to a patent application. It creates a new § 137, that requires the USPTO to promulgate regulations. The penalties for violation include imposition of civil monetary penalties. See, Committee Print at pages 26-28.
Third, as a consequences of the two new sections imposing duties of candor, the Committee Print removes various provisions throughout the Patent Act that reference "deceptive intent" and deceptive intention". See, Committee Print at pages 28-29.
Damages for Infringement. The Committee Print limits a patent holder's ability to obtain treble damages, and limits the size of some damage awards. This is another key part of the bill. See, Committee Print, § 6, at pages 29-31.
First, it limits the situations in which treble damages may be assessed against an infringer, pursuant to 35 U.S.C. § 284. For example, the Committee Print provides that "The absence of an opinion of counsel shall not create an inference that the infringement was willful." It also provides that "Increased damages may not be awarded based merely upon the knowledge of a patent or its contents by the defendant prior to suit."
Second, this section provides that a claimant may recover treble damages, after providing a detailed written notice. It provides that,
"Increased damages may be awarded for any infringement--
(A) occurring after the defendant receives from the plaintiff written notice that--
(i) contains a charge of infringement,
(ii) identifies the specific patent, claims, and allegedly infringing products or processes infringed, and
(iii) is sufficient to give the defendant an objectively reasonable apprehension of suit on such patent, unless the defendant had an informed good faith belief that a court would reasonably hold that the patent is invalid, not infringed, or unenforceable;
(B) in which the defendant intentionally copied the patent subject matter with knowledge that it was patented, unless the defendant had an informed good faith belief that a court would reasonably hold the patent is invalid, not infringed, or unenforceable; or
(C) if the patent was asserted against the defendant in a previous judicial proceeding in a Federal court, and the present infringement is not more than colorably different from the conduct asserted to be infringing in the previous proceeding."
This section may be intended to force attorneys for patent holders that might sue for infringement to provide specific and detailed written notices in advance. Several persons stated at the Subcommittee's hearing that many attorneys now send out vague form letters.
Third, this section provides that "Whenever the invention is incorporated into, or is made part of, a method or apparatus otherwise known in the art, or is an approved method or apparatus including within it elements otherwise known in the art, then any award of a reasonable royalty or other damages shall be based only upon such portion of the total value of the method or apparatus as is attributable to the invention alone and shall not include value attributable to the method, apparatus, or elements otherwise known in the art or contributed by the infringer or its licensors."
This section may most benefit software and computer industry companies found to have infringed one patent, but where hundreds or thousands of inventions are incorporated into the infringing product.
Injunctions. The Committee Print amends the Patent Act with respect to the availability of injunctive relief in patent infringement actions. It makes it harder to get an injunction. This is another short, but important, section of the bill. See, Committee Print, § 7, at pages 31-32.
It provides that "A court shall not grant an injunction under this section unless it finds that the patentee is likely to suffer irreparable harm that cannot be remedied by the payment of money damages. In making such a finding, the court shall not presume the existence of irreparable harm, but shall consider and weigh evidence that establishes or negates any equitable factor relevant to a determination of the existence of irreparable harm, including the extent to which the patentee makes use of the invention."
Continuation Applications. The Committee Print adds a new § 123 to the Patent Act titled "Limitation on enlargement of claim". This is targeted at eliminating the enlargement of claims through continuing applications. See, Committee Print, § 8, at pages 32-33.
Publication of Patent Applications After 18 Months. The Committee Print includes a lengthy section pertaining to post grant procedures. See, Committee Print, § 9, at pages 33-49. First, § 9(a) would have the effect of requiring that almost all patent applications be published within 18. See, § 9(a), at pages 33-34.
Post Grant Opposition Procedure. One of the most important, and longest, provisions of the Committee Print would add a new Chapter 32 to the Patent Act, titled "Post-Grant Opposition Procedures". See, Committee Print, § 9(f), at pages 35-49.
This language is not new. Much of it is a verbatim copy of the parallel provisions of HR 5299 (108th Congress).
This bill provides that "A person may request that the grant or reissue of a patent be reconsidered by the Office by filing an opposition seeking to invalidate one or more claims in the patent".
This would be a public proceeding, with the contents of the file open to public inspection. However, the bill also provides that "if requested by the person making the request under section 321, the identity of a real party in interest shall be kept separate from the file of the opposition and made available only to Government agencies upon written request, or to any person upon a showing of good cause."
This procedure would not be available "if the opposer relies upon factual evidence or expert opinions in the form of affidavits or declarations during the opposition proceeding or if the opposer exercises the right to appeal under section 141".
An opposition request must be made within nine months of the grant (or issuance of a reissue patent), unless the patent holder otherwise consents in writing.
The bill further provides that the Director of the U.S. Patent and Trademark Office (USPTO) "may dismiss an opposition request that the Director determines lacks substantial merit." However, such a "dismissal of an opposition request shall not be admissible in any civil action related to the patent against which a dismissed request was filed."
The bill provides that "The Director shall assign the opposition proceeding to a panel of three administrative patent judges ... The panel shall decide the questions of patentability raised in each opposition request for which an opposition has been instituted. The decision shall be based upon the prosecution record that was the basis for the grant of the patent and the additional submissions by the parties to the opposition proceeding authorized under this chapter."
The bill provides that the patent owner may file responses to opposition requests, and may request amendment of any claims that are the subject of an opposition request. It further provides for limited discovery, hearings, briefs, and written decisions.
It also addresses the burden of proof. "The opposer in an opposition proceeding under this chapter shall have the burden to prove the invalidity of a claim by a preponderance of the evidence. The determination of invalidity shall be based upon the broadest reasonable construction of the claim."
Then, "the determination with respect to an issue of invalidity raised by an opposer shall bar the opposer from raising, in any subsequent proceeding involving that opposer under this title, any issue of fact or law actually decided and necessary to the determination of that issue."
However, the bill provides one exception. "If an opposer in an opposition proceeding demonstrates ... that there is additional factual evidence that is material to an issue of fact actually decided in the opposition proceeding, and necessary to the final determination in the opposition proceeding, that could not reasonably have been discovered or presented in the opposition proceeding by that opposer, the opposer may raise, in that subsequent proceeding, that issue of fact and any determined issue of law for which the issue of fact was necessary."
There is wide support for creating a post grant opposition procedure. However, supporters differ with respect to the procedural details.
Components and Combinations. The Committee Print amends 35 U.S.C. § 271(f) by adding at the end the following language: "An item supplied in or from the United States is not a `component´ under this section unless the item is a tangible item that is itself combined physically with other components to create the combination that is alleged to infringe." See, Committee Print, § 10, at page 49.
Transitional Provisions. Section 11 of the Committee Print, at pages 49-51, contains transitional provisions.
Harmonization. Section 11 of the Committee Print, at pages 51-52,
pertains to harmonization with Europe and Japan.