Patent Reform Act of 2007

The Patent Reform Act of 2007 (USBill|110|H.R.|1908, USBill|110|S.|1145) is a proposal introduced in the 110th United States Congress for changes in United States patent law. Democratic Congressman Howard Berman introduced the House of Representatives bill on 18 April 2007. Democratic Party Senator Patrick Leahy introduced the Senate bill on 18 April 2007. The bills broadly resemble the proposed Patent Reform Act of 2005 which would have enacted many of the proposals recommended by a 2003 report by the Federal Trade Commission [ Federal Trade Commission, [http://www.ftc.gov/os/2003/10/innovationrpt.pdf "To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy, A Report by the Federal Trade Commission"] , October 2003 (pdf) ] and a 2004 report by the National Academy of Sciences. [ National Research Council (U.S.). Committee on Intellectual Property Rights in the Knowledge-Based Economy, [http://newton.nap.edu/catalog/10976.html "A Patent System for the 21st Century"] , Stephen A. Merrill, Richard C. Levin, and Mark B. Myers, editors, 2004, ISBN 0-309-08910-7 ]

Proposed changes in U.S. patent law

In certain respects, H.R. 1908 and S. 1145 would make American patent law more similar to patent laws of many other countries. H.R. 1908 would effect the following changes in U.S. patent law:

Switch from first to invent to first to file

The United States is currently the only country in the world that gives priority to the application that claims the earliest invention date, regardless of which application arrives first. The first-to-invent system is thought to benefit small inventors, who may be less experienced with the patent application system.Coster, page 10] Critics of the first-to-file system also contend it would create a “race to the mailbox,” and would result in sloppier, last-minute patent applications. However, the first-to-invent system requires the United States Patent and Trademark Office (USPTO) to undertake lengthy and complicated “interference” proceedings to try to determine who invented something first when claims conflict. The first-to-file system, supporters contend, [Gholz, page 1] would inject much-needed certainty into the patent application process. Finally, because every other country is on a first-to-file system, supporters claim that the majority of patent applicants and attorneys are already operating on a first-to-file basis. [Coster, page 9]

Other proposed provisions

The bill would also make the following changes:

*Defining "inventor" to include a joint inventor and coinventor.

*Revising procedures for patent interference disputes.

*Revising requirements for an inventor's oath or declaration to allow substitute statements in specified circumstances (e.g., death or disability) and supplemental and corrected statements.

*Allowing a third party assignee (other than the inventor) or a person with a proprietary interest to file a patent application.

*Modifying provisions relating to damages for patent infringement to:
*# require a court to conduct an analysis of a patent's specific contribution over prior art;
*# allow increased damages for willfull patent infringement; and
*# expand the prior user defense.

*Renaming the Board of Patent Appeals as the Patent Trial and Appeal Board. (Also, revising provisions relating to the Board's composition, duties, and authorities).

*Allowing a person who is not the patent owner to file a petition with the Board to cancel a patent as invalid (post-grant review). Would also set forth procedures for the consideration of such petitions, including provisions to prevent harassment of patent owners and abuse of process.

*Allowing third parties to submit documents relevant to the examination of a patent application.

*Revising venue requirements for civil patent actions against individuals and corporations to allow actions to be brought in the judicial district where either party resides (currently, where the defendant resides) or where the corporation has its principal place of business or was incorporated.

*Banning tax planning patents.

*Allow financial institutions to infringe patents on check collection systems, [http://www.cbo.gov/ftpdocs/89xx/doc8981/s1145.pdf Congressional Budget Office Cost Report] , pages 2, 5 and 11] such as those owned by DataTreasury. [ [http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021303731.html Jeffrey H. Birnbaum, "Lawmakers Move to Grant Banks Immunity Against Patent Lawsuit", Washington Post, February 14, 2008] ]

tatus

The House version of this bill passed. The Senate version is under consideration. On September 4, 2007 the United States House Committee on the Judiciary reported the bill H.R. 1908, as amended, with the recommendation that it be passed by the House. The House passed the bill by a vote of 220-175 on September 7, 2007. It was favored among Democrats (160 ayes, 58 noes) and disfavored among Republicans (60 ayes, 117 noes). The Senate Committee on the Judiciary marked up the bill on June 16, 2007 and ordered the bill reported. The report, S. Rpt. 110-259, ["The Patent Reform Act of 2007: Report Together with Additional and Minority Views, to Accompany S. 1145", Report No. 110-259, January 24, 2008 ( [http://frwebgate.access.gpo.gov/cgi-bin/useftp.cgi?IPaddress=162.140.64.181&filename=sr259.110&directory=/diska/wais/data/110_cong_reports text] , [http://frwebgate.access.gpo.gov/cgi-bin/useftp.cgi?IPaddress=162.140.64.181&filename=sr259.pdf&directory=/diska/wais/data/110_cong_reports PDF] )] issued on January 24, 2008.

Advocacy for and against

A number of organizations have lobbied Congress either in favor or opposed to various aspects of the bill.

For

Organizations lobbying Congress in favor of various aspects of the bill generally view the bill as needed reform to reduce the abuses of the patent system which are stifling innovation. These organizations include:
*American Institute of Certified Public Accountants (supports a single provision). [ [http://www.aicpa.org/Magazines+and+Newsletters/Newsletters/The+CPA+Letter/September+2007/AICPA+Supports+Tax+Strategy+Patent+Amendment+Added+to+Patent+Reform+Bill.htm The AICPA supports recent legislation that would make tax planning methods not patentable.] ]
*Business Software Alliance [ [http://dev.bsa.org/country/Public%20Policy/Patents.aspx Business Software Alliance position paper on the Patent Reform Act of 2007] ]
*Coalition for Patent Fairness [ [http://www.theregister.co.uk/2007/10/25/techies_send_letter_to_senate_against_patent_reform_bill/ Cade Mendez, "Techies oppose US patent reform bill", The Register, October 25, 2007] ]

Patent quality

The United States Department of Commerce strongly supports the bill's provisions directed to the improvement of patent quality, beginning at the application stage. [http://www.ogc.doc.gov/ogc/legreg/letters/110/S1145020408.pdf Letter from N F Wienecke] , US Department of Commerce]

Against

Organizations lobbying Congress in opposition to various aspects of the bill generally view the bill as weakening the rights of patent holders and/or favoring larger and foreign corporations, which in turn will stifle American innovation and contribute to the outsourcing of U.S. jobs to other nations. These organizations include:
*AFLCIO [ [http://www.aflcio.org/issues/legislativealert/alerts/upload/PatentReformHouse.pdf AFL CIO Legislative Alert, September 6, 2007] ] , United Steel Workers and other unions [ [http://www.bustpatents.com/unions.pdf Letter from unions to Senate opposing patent reform bill] ] .
*American Family Association, Eagle Forum and other conservative groups [ [http://www.bustpatents.com/ConsPat.pdf American Family Association et al. Letter to Harry Reid, April 22, 2008] ]
*BioTechnology Industry Organization [ [http://www.bio.org/news/newsitem.asp?id=2007_0606_02 "The Patent Reform Act of 2007 Will Weaken Patents and Jeopardize Continued Biotechnology Innovation " BioTechnology Industry Association press release, June 6, 2007] ]
*Coalition for 21st Century Patent Reform [ [http://www.patentsmatter.com/press/release_090707.php "Coalition to Continue to Work for Consensus Patent Legislation" Coalition for 21st Century Patent Reform press release, September 7, 2007] ]
*Change To Win Labor Federation [ [http://americaningenuity.org/pdf/CTW%20022608%20Letter%20Opposing%20Patent%20Reform%20Act%20of%202007%202.pdf February 26, 2008 letter to U.S. Senate] ]
*IEEE [ [http://www.filewrapper.com/PDFs/20070828IEEEpatent%20reformletter.pdf IEEE letter to Senator Harry Reid, August 27, 2007] ]
*Innovation Alliance [ [http://www.innovationalliance.net/media-center/news/more-430-organizations-all-50-states-speak-out-against-proposed-patent-reform-act Eric Thomas, "More Than 430 Organizations From All 50 States Speak Out Against Proposed Patent Reform Act", Innovation Alliance Press Release, October 23, 2007] ]
*National Association of Patent Practitioners [ [http://www.napp.org/resources/NAPP-OppTo2007SenateBill.pdf NAPP letter to Senator Harry Reid regarding opposition to the Patent Reform Act of 2007, Dec. 27, 2007] ]
*National Small Business Association ["NSBA Opposes Patent Reform Proposal" NSBA press release Feb 5, 2008]
*POPA, the union of US patent examiners [ [http://www.bustpatents.com/unions.pdf Letter from unions to Senate opposing patent reform bill] ]
*Professional Inventors Alliance, PIAUSA.ORG [ [http://www.piausa.org/ Professional Inventor's Alliance web site] ]
*over 1000 other organizations [ [http://www.innovationalliance.net/node/48 Letters of Opposition by state] ]

=Da

The United States Department of Commerce opposes the bill "in its entirety" unless Section 4 of the bill, which proposes changes concerning the "Right of the Inventor to Obtain Damages", is "significantly revised". The Department believes that if Section 4 is not revised, "the resulting harm to a reasonably well-functioning U.S. intellectual property system would outweigh all the bill's useful reforms." [http://www.ogc.doc.gov/ogc/legreg/letters/110/S1145020408.pdf Letter from N F Wienecke] , US Department of Commerce]

International reaction

Yongshun Cheng, former Deputy Director of the IP Division of the Beijing High People's Court, has criticized the bill as being hypocritical. He asserts that the US should not be weakening the rights of US patent holders at the same time it is pressuring the Chinese government to strengthen the rights of Chinese patent holders. [ [http://infringement.blogs.com/philip_brooks_patent_infr/files/patent_reform_article_china_intellectual_property_news.pdf Cheng & Lin, "The Greatest Changes of the US Patent System in the Past 50 Years", China Intellectual Property News,November 11, 2007] ]

The Indian Pharmaceutical Alliance has pointed out that the provisions of the bill which allow for the validity of a US patent to be challenged shortly after the patent issues, could favor Indian generic drug manufacturers by lowering the cost and legal risks associated with challenging drug patents of questionable validity. [ [http://economictimes.indiatimes.com/articleshow/msid-2225676,prtpage-1.cms Gireesh Chandra Prasad, "Local cos can eye patents in US", The Economic Times, July 23, 2007.] ]

ee also

* Patent Reform Act of 2005

References

External links

* [http://www.torys.com/publications/pdf/ARTech-19T.pdf From First-to-Invent to First-to-File: The Canadian Experience] , Robin Coster, American Intellectual Property Law Association, April 2002.
* [http://www.oblon.com/Pub/GholzFirsttoFile.html First-to-file or First-to-invent?] , Charles L. Gholz, "Journal of the Patent and Trademark Office Society", 82 JPTOS 891, December 2000.
* [http://newton.nap.edu/catalog/10976.html "A Patent System for the 21st Century"] by the National Academy of Sciences, 2004
* [http://anticipatethis.files.wordpress.com/2008/01/crspatentreformrpt.pdf Patent Reform in the 110th Congress: Innovation Issues] Library of Congress report posted on Anticipate This! : Patent and Trademark Law Blog, January 26, 2008
* [http://news.com.com/Legislating+creativity--feds+plan+patent+reform/2009-1008_3-5860582.html "Patent bill would make sweeping changes"] by Declan McCullagh, News.com, September 13, 2005
* [http://www.skgf.com/media/news/news.231.pdf "Elimination of the Best Mode Requirement: Throwing the Baby Out with the Bathwater?"] by Matthew J. Dowd, IPL Newsletter, Fall 2005
* [http://firsttoinvent.org "Inventors wishing to keep First to Invent in the U.S."]
* [http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1189587765764 "Don't Adopt Oppositions"] by Dale L. Carlson, Special to the National Law Journal, September 17, 2007 (con)
* [http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/11/15/ED23TBORH.DTL Patent reform is crucial for innovators, consumers] by Mark Chandler, Cisco, "San Francisco Chronicle", November 15, 2007 (pro)
* [http://www.american.com/archive/2008/january-february-magazine-contents/patents-pending Patents Pending] , Claude Barfield & John E. Calfee, "The American", January/February 2008 (con)
* [http://www.pli.edu/patentcenter/blog.asp?view=plink&id=261 Bush Administration Opposes S. 1145 on Patent Reform] , Nathaniel F. Wienecke, Assistant Secretary for Legislative and Intergovernmental Affairs of the United States Department of Commerce, February 5, 2008 (con)
* [http://www.aei.org/publications/pubID.27550,filter.all/pub_detail.asp "There Is a Role for Congress in Patent Litigation Reform"] by Ted Frank, AEI Legal Center for the Public Interest, February 21, 2008 (pro)
* [http://ap.google.com/article/ALeqM5hAjlN6vaImPfYgcy74yQcKYQS_kAD8VPUQ9O0 "Unions Pounce on Patent Reform"] , Associated Press, April 2, 2008