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Saturday, 8 September 2007

US Patent Reform Act Passed

Just a few hours ago, the House of Representatives passed the Patent Reform Act (HR 1908) by a vote of 225-175. The legislation, discussed in previous posts (19 July, 17 May, 19 April), was proposed by Democratic Congressman, Howard Berman, in April this year.

One of the major reforms will be the change from a first-to-invent to a first-to-file system (harmonising US patent law with the rest of the world), as well as mechanisms for more efficient validity challenges and post-grant review.
In particular, the reforms are seen as part of a general response in US patent law (and in the US Supreme Court) to concerns regarding the expansion of patents and a subsequent decline in patent quality. One aspect of HR 1908 attracting much discussion is the codification of the assessment of damages, limiting the court's discretion in making an award.

During the Hearing, HR 1908 was criticised as sector-specific, pushed by the software and computing industries but viewed more critically by the pharmaceutical sector. But more significantly, the White House opposes the damages aspect of HR 1908, suggesting a possible veto in the offing by the President.
But as Thomas Jefferson once said, "Every generation needs a new revolution."


Tim Jackson said...

As I understand it, the legislation needs to be passed by the Senate, as well as the House of Representatives, before there's any question of a Presidential veto. There's likely to be some haggling yet.

One worrying aspect of the bill (at least as it came out of the report stage - I don't know if it has been amended during the vote) was section 123. This says that the Director of the US Patent Office "shall [not "may"] ... require that applicants submit a search report and other information and analysis relevant to patentability." There is an exception for micro entities.

This looks like an extension of the examination support document proposed under the new rules if you have more than 5 independent claims or more than 25 claims in total. The "analysis" required there includes an element-by-element identification of each limitation of each claim which is present in each prior art document. And a detailed explanation particularly pointing out how each independent claim is patentable over each cited document.

Evidently this would now apply to all applications, not just to ones with large numbers of claims.

There has been concern about the implications of examination support documents. Quite apart from the substantial increase in the cost of obtaining a patent, the "analysis" is something that will be seized upon by defendants during litigation. They will dissect it in minute detail, searching for anything that can be used to suggest that you misled the Examiner and are therefore guilty of inequitable conduct.

Tim Jackson said...

Referring to my previous post, I think the language of section 123 was indeed amended during the debate in the House of Representatives, to change "the Director shall require..." to "...may require...".

It seems they also added a new requirement: if the applicant has to produce a search report, it must be done by a US citizen or corporation.

This depends whether I've correctly interpreted various opaque documents on the House of Representatives website. And it may all change as the legislation progresses further.

David said...

Thinking it out, what would the language of section 123 actually result in? If the applicant is requested to submit a "search report" performed by a US citizen/company, then the safest option for applicants would probably be to farm the job out (at substantial additional cost) to a company that specialises in doing patent searches. That would ensure the search was done without any bias from the attorney or applicant. Now, call me naive if you like, but isn't doing searches exactly the sort of job that patent offices are supposed to be good at?

Filemot said...

I was quite sympathetic to the USPTO's problems but the idea that only a US citizen can provide them with a helpful search document is deeply offensive. Nevertheless from other commentary it looks as if the legislative process may have some way to go before it becomes effective.

Anonymous said...

Re. filemot's comment, I rather think the US citizen angle is job protectionism, to prevent outsourcing to low cost countries, and not necessarily wholly related to alleged competence.

Anonymous said...

It is overstating it to say there is a long way to go. The House of Representatives has now approved the Bill. The Sentate judicary committee ordered the parallel bill (S. 1145) to be reported favourably the Senate. This means the it could be a matter of a single vote before the President has to decide to veto the bill or not.

David said...

Job protectionism still sounds deeply offensive to me. I wonder if the USPTO will waive the need to file the search report if another office's report is available. If not, where does it leave the patent prosecution highway initiative?

Anonymous said...

Only European nationals may represent applicants before the European Patent Office. Isn't that protectionism of equal measure?


Anonymous said...

See page 17 of the HR Bill. Commencement date for Section 3 : 90 days after the President reports to Congress that the Europeans have implemented a one year grace period. Don't hold your breath until the Americans introduce First to File.

David said...

Well spotted. It's not going to happen, is it?

Anonymous said...

Well David, it depends what you mean by "it". I should think that Europe is more likely to adopt a grace period than that the reciprocity provision will disappear from this Bill. (Ask DE Govt adviser Heinz Bardehle, or Hall of Fame Prof. Straus). Whereas any US politician unwise enough to suggest striking out the reciprocity clause will instantly be denounced as an unpatriotic wimpy backsliding flip-flopper, so none ever will so suggest, no?

David said...

If Europe were ever to adopt a grace period (which I don't think will happen), one only has to look at how long the relatively minor changes in EPC2000 have taken to implement: over seven years from being agreed in 2000 to implementation in December 2007. If there is no chance that the reciprocity provision will disappear from the US legislation, then first to file in the US will simply not happen in the foreseeable future.

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