Patent Baristas

The patent reform bills (H.R. 1908 and S. 1145, the Patent Reform Acts of 2007) were favorably reported by the House and Senate Judiciary Committees prior to the August Congressional recess. According to the schedule for the House of Representatives this week, H.R. 1908 is to be considered by the House this Friday, September 7th.

Any amendments to H.R. 1908 will only be available after a meeting of the Rules Committee scheduled for late Thursday afternoon, September 6th.

The American Intellectual Property Law Association (AIPLA), working with the Coalition for 21st Century Patent Reform, supports legislation to implement the recommendations of the National Academies of Sciences to improve the patent system. Unfortunately, H.R. 1908 fails to implement a number of the most important NAS recommendations and includes several significant deficiencies which must be corrected before it is considered by the House.

Concerns include:

Damages – the bill dramatically amends section 284 to limit damage awards by adopting an untested, new “prior art subtraction” construct which limits the royalty available to a patent owner to the “patent’s specific contribution over the prior art,” seriously undermining the value of patents. In an effort to shore up the minimal royalty this untested concept would yield, additional new, untested language was added stating that “the contribution over the prior art may include the value of the additional function resulting from the combination.” What is the value of the “additional function” of the combination of paper and adhesive in Post-it Note® products?

Inequitable conduct – the bill does not implement the NAS recommendation to significantly restrain the doctrine of inequitable conduct. It would make the failure to disclose “any information that a reasonable patent examiner would consider important” a basis for holding a patent unenforceable and would permit that holding to be applied to related patents. This restatement of the failed regime of inequitable conduct is particularly harsh and ironic in view of the PTO’s efforts to force ever greater disclosure from applicants, who increase their risk of a later charge of inequitable conduct with every statement made during prosecution.

Mandatory search and analysis – The bill mandates that the Director require all applicants to submit a search and patentability analysis with every application. Not only will this increase the cost of filing applications by thousands of dollars, it substantially increases the likelihood of later inequitable conduct charges given the failure of the bill to adequately constrain such charges.

Regulatory authority – the bill would retroactively authorize the Director to issue the final rules limiting the filing of continuations published on August 21st.

Interlocutory appeals – the bill would permit appeals from district court claim construction rulings notwithstanding Chief Judge Michel’s warning that “appeals could increase 100% or more” and that the ensuing delays “would be extremely harmful to parties who need prompt resolution of their disputes.”

If this concerns you, contact your elected Representative and voice your concerns with H.R. 1908 and the effort to steamroll it through the House. You can find your specific Representative and his or her contact information at http://www.house.gov/ or, you can call the Switchboard for the House of Representatives at (202) 224-3121, and ask for your Representative’s Office.