Mar 16 2009
The Patent Reform Act of 2009 – A Slimmer Version of Prior Bills
The patent reform movement is gearing up again in Congress. The Patent Reform Act of 2009 (click here for the text of the bill introduced in the Senate) may have a better chance to pass this time around not only because of the provisions that are included in this bill, but also because of the provisions removed from prior versions. Whether passage is a good idea is another question.
PRA 2009 shares many important elements with prior versions of patent reform legislation that have been introduced and debated in Congress but have failed to muster sufficient support: 1.) creating a post-grant opposition procedure; 2) moving to a first-to-file system; 3) limiting reasonable royalty infringement damages; and 4) limiting circumstances justifying a finding of willful infringement. PRA 2009 also changes the patent venue statute to limit the ability of non-producing entities (sometimes referred to as “trolls”) from suing in perceived patent-holder friendly hotspots like the Eastern District of Texas. It also clarifies the district court’s discretion to request an interlocutory appeal on claim construction to the Federal Circuit.
To be sure, like prior versions, this bill still is hostile to patent holders and several of its provisions, most notably the damages provision, will face stiff opposition. But other objectionable provisions from prior versions of the bill that were omitted from this version may make PRA 2009 more palatable. Thus the bill does not include: 1) changes to the law of inequitable conduct; 2) mandating submissions of prior art searches with an application; and 3) requiring publication of an application 18 months after filing.
The Senate sponsors agreed that the bill is just a starting point for negotiation. The contentious damages provision that helped kill the effort last year remains in PRA 2009, and we expect the provision to be a lightning rod this time around too.
More generally, one must ask whether we need a significant patent reform measure at this point. Since the reform movement began, patent law has been reshaped by such cases as eBay (injunctions), Medimmune (declaratory judgments and license challenges), KSR (obviousness), LG Electronics (limiting patent royalties), Seagate (willfulness and opinion of counsel) and Volkswagen (venue). [We had previously discussed the impact of the KSR ruling on the decision in Friskit v. RealNetworks, in which the Federal Circuit invalidated Friskit's on-demand media patents on obvious grounds.] granted summary judgment the The Federal Circuit, in response to increased public and Supreme Court scrutiny, has met en banc recently to harmonize its authority on business methods patents (Bilski), and the court is looking for appropriate cases for en banc decisions in the areas of inequitable conduct and damages. Much has changed and much will change as we digest the implications of these rulings.
Many of the provisions in PRA 2009 were conceived prior to this sea change in the law to address perceived unfairness in aspects of the law that have been addressed by these intervening cases. With the pendulum having swung so far away from patent holders in such a short period of time, is this the right time to swing that pendulum still further in the same direction?
We will be keeping a close watch on the debate in Congress and report on important developments.
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