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Prelude

The Long and Winding Road to U.S Patent Reform Alan J. Kasper Partner Sughrue Mion PLC akasper@sughrue.com. Prelude. “ The long and winding road That leads to your door, Will never disappear I ’ ve seen that road before ” Paul McCartney

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Prelude

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  1. The Long and Winding Road to U.S Patent ReformAlan J. KasperPartnerSughrue Mion PLCakasper@sughrue.com WPLC

  2. Prelude “The long and winding road That leads to your door, Will never disappear I’ve seen that road before” Paul McCartney “The Long and Winding Road” from the “Let it Be” Album (1969) WPLC

  3. All roads pass through the Congress WPLC

  4. WHERE WE HAVE BEEN: • 109th Congress: • Publicity • Town Meetings • Legislation • AIPLA Draft • HR 2795 (Smith) • Coalition Print • HR 5096 (Berman) • S3818 (Leahy & Hatch) • Interest Groups • Software Coalition • 21st Century Coalition • BIO/PHARMA • WARF • SMEs • Supreme Court • Labcorp • Ebay (injunctions) 2001-02 2003-04 2005-06 2007-08 • 110th Congress: • Legislation • Dems Control • Pressure Grows • Short Window • Both Return by 4/17 • Interest Groups • Stronger • Compromise • Courts • Microsoft/ATT (271f) • KSR (obviousness) • Medimune (DJ’s) • Seagate (willful inf.) • 108th Congress: • USPTO 21st Cent Plan • FTC Report • NAS Report • AIPLA Best Practices • HR 5922 (Berman) • 107th Congress: • Growing concern for health and vitality of the US Patent System M

  5. The USTPO “21st Century STRATEGIC PLAN” (2003) • Multi-track Examination • Search Strategies – full faith and credit • Post Grant Review – Oppositions • 18 Month Publication of All Applications • Assignee filing – original and broadened reissue applications • Eliminate interference bar to published applications • Greater Capability, Training and Facilities WPLC

  6. The Federal Trade Commission Report (2003) • FTC and Department of Justice Hearings – 2002 • 300 panelists – business, practitioners, independent inventors, scholars, organizations and experts • Conclusions • Competition and Patent Law and Policy Promote Innovation and Benefit the Public • Competition and Patents Must Work Together in the Proper Balance • Some Modifications for a Proper Balance • “Questionable Patents” Harm Innovation • 10 Recommendations WPLC

  7. The Federal Trade Commission Report - Key Recommendations • Post Grant Review and Opposition • “Preponderance” Standard • Obviousness Standards - Tightened • Commercial Success – burden on patentee • Assume an Ability to Combine Prior Art • Assist PTO with Prior Art • Statements of Relevance on Examiner Request • Encourage Inquiries under Rule 105 • Publication of Patents – ALL at 18 months • Intervening or Prior User Rights Created • Willful Infringement ONLY on Actual Written Notice or Deliberate Copying WPLC

  8. The National Academy of Sciences Report (2004) • Four Year Study of the U.S. Patent System • Seven Key Proposals to Change the System • Preserve an Open-ended, Unitary and Flexible System - for new technologies • Reinvigorate the Non-obviousness Standard • Institute an Open Review System – Third Party Opposition • Strengthen USPTO Capability • Provide an Experimental Use Exception for Infringement • Remove Subjective Elements from Litigation – e.g., best mode, willful infringement and inequitable conduct • Harmonize Substantive Patent Law with EPO and JPO • Priority of Invention – first to file • Grace Period • Prior art • Best Mode • 18 Month Publication WPLC

  9. Patent Quality Assistance Act - The Berman Bill: HR 5299(2004) • Post Grant Opposition – two windows • Prior Art Submissions pre-Grant – Third Party Rights • Inter Partes Reexamination – Used for Any Patents • Willful Infringement – Higher Threshold for Trebeling • Injunction – Proof, not presumption of Irrep. Harm • Obviousness – Presumption for Business Methods • Overcome by preponderance of evidence WPLC

  10. First Inventor to File (§3) Revised Definition of Prior Art (§3) Assignee Filing (§4) Best Mode Repealed (§4) Duty of Candor to PTO (§5) Apportionment of Damages (§6) Willful Infringement (§6) Injunctions (§7) - later deleted Continuation Applications Limited (§8) - later deleted Publication of All Apps at 18 Months (§9) Prior User Rights (§9) Inter Partes Reexam (§9) Post Grant Oppositions (§9) Submission of Art by 3rd Parties (§10) Patent Reform Act of 2005 -The Smith Bill: HR 2795(2005) WPLC

  11. First Inventor to File (§3) Revised Definition of Prior Art (§3) Assignee Filing (§4) Best Mode Repealed (§4) Duty of Candor to PTO (§5) Apportionment of Damages (§6) Willful Infringement (§6) Publication of All Apps at 18 Months (§7) Prior User Rights (§7) Inter Partes Reexam (§7) Post Grant Oppositions (§7) Submission of Art by 3rd Parties (§8) Venue (§9) - new Patent Reform Act of 2005 –Chairman’s Substitute Amendment: HR 2795(2005) WPLC

  12. First Inventor to File (§3) Revised Definition of Prior Art (§3) Assignee Filing (§4) Best Mode Repealed (§4) Duty of Candor to PTO (§5) Apportionment of Damages (§6) Willful Infringement (§6) Publication of All Apps at 18 Months (§7) Prior User Rights (§7) Inter Partes Reexam (§7) Post Grant Oppositions (§7) Submission of Art by 3rd Parties (§8) Transfer of Venue (§9) - new Repeal 271(f) - new Coalition Print(2005) WPLC

  13. Patents Depend on Quality (PDQ) Act–The Berman Boucher Bill: HR 5096(2006) • Post Grant Opposition (§2) – two windows • Publication of Applications after 18 months (§3) • Prior Art Submissions pre-Grant(§4) • Inter Partes Reexamination(§5) • Willful Infringement(§6) • Transfer of Venue(§7) • Injunctions Reform (§8) WPLC

  14. First Inventor to File (§3) Revised Definition of Prior Art (§3) Assignee Filing (§4) Apportionment of Damages (§5) Willful Infringement (§5) Unenforceability (§5) Prior User Rights (§5) Repeal of 271(f) (§5) Publication of All Apps at 18 Months (§7) Post Grant Oppositions (§6) Submission of Art by 3rd Parties (§7) Venue (§8) Inter Partes Reexam (§9) Attorneys Fees – Loser Pays (§5) Interlocutory Appeals for Claim Construction (§8) Enhanced Rulemaking Authority for PTO (§9) Patent Quality Assistance Act -The Hatch Leahy Bill: S 3818(2006) WPLC

  15. What are the common themes on the road to reform? • STANDARDS FOR FILING • STANDARDS FOR EXAMINATION • PROTECTION OF THIRD PARTY RIGHTS WPLC

  16. Common Themes from the Several Proposals • STANDARDS FOR FILING • First Inventor to File (NAS, AIPLA, HR2795, Substitute, Coalition Print, S3818 ) • Eliminates Interferences • Coalition Print adds priority to inventor first to publish • Assignee Filing (USPTO, AIPLA , HR2795, Substitute, Coalition Print, S3818 ) • Elimination of Subjective Criteria for Patentability (NAS, AIPLA, Berman; , HR2795, Substitute, Coalition Print, S3818 ) • Best mode – not eliminated by HR 5096 or S3818 • Others related to patentability – e.g., abandonment WPLC

  17. Common Themes from the Several Proposals • STANDARDS FOR EXAMINATION • Duty of Candor and Inequitable Conduct (FTC, NAS, AIPLA , HR2795, Substitute, Coalition Print, S3818) • But for or • Definition of Prior Art (FTC, NAS, AIPLA , HR2795, Substitute, Coalition Print, S3818) • Eliminate On Sale & Public Use • Add Publicly Known Anywhere • Use “Reasonable Accessible Standard – not S3818 • CRADA exceptions WPLC

  18. Common Themes from the Several Proposals • STANDARDS FOR EXAMINATION • Inventor’s Grace Period (NAS, AIPLAHR2795, Substitute, Coalition Print, S3818) • Only Disclosure by or derived from the Inventor • Standard of Obviousness (FTC, NAS, Berman – KSR may remove need for legislation) WPLC

  19. Common Themes from the Several Proposals • PROTECTION OF THIRD PARTIES • 18 Month Publication (USPTO, FTC, NAS, AIPLA, Berman, HR2795, Substitute, Coalition Print, PDQ, S3818) • Third Party Submissions (Berman, HR2795, Substitute, Coalition Print, PDQ, S3818) • Post Grant Opposition-(USPTO, FTC, NAS, AIPLA, Berman, HR2795, Substitute, Coalition Print, PDQ, S3818) • One Window Only (9-12 months) – Substitute & Coalition • Two Windows (litigation threat or reason to believe) • Burden of Proof – preponderance • Estoppel – same grounds raised or could have been raised WPLC

  20. Common Themes from the Several Proposals • PROTECTION OF THIRD PARTIES • Expanded Inter Partes Reexamination (USPTO, AIPLA, Berman, HR2795, Substitute, Coalition Print, PDQ, S3818) • All applications • Limits Estoppel • More Limited Willful Infringement(FTC, NAS, AIPLA, Berman, HR2795, Substitute, Coalition Print, PDQ, S3818) • Actual and Detailed Notice • Copying • Exception for Informed Good Faith Belief WPLC

  21. Common Themes from the Several Proposals • PROTECTION OF THIRD PARTIES • More Limited Injunctive Relief (BermanHR2795 – impact of EBay) • Prior User Rights (FTC, AIPLA HR2795, Substitute, Coalition Print, S3818) • Eliminates limitation to business methods • Repeal of 271(f) (Coalition Print, S3818 – Impact of Microsoft ) • Venue (Substitute, Coalition Print, PDQ, S3818) WPLC

  22. NEW Themes • PROTECTION OF THIRD PARTIES • Attorneys Fees, Loser Pays (S3818 -Supported by IPO, Not supported by AIPLA) • Interlocutory Appeals for Claim Construction Cases(S3818 -Not supported by AIPLA) • Enhanced Rule Making Authority for USPTO (S3818 - Not supported by AIPLA) WPLC

  23. MAJOR ROADBLOCKS • FIRST INVENTOR TO FILE • INEQUITABLE CONDUCT – “but for” test? • WILLFUL INFRINGEMENT – level of knowledge • DAMAGES APPORTIONMENT – Pl or Def B/P • OPPOSITION SYSTEM – One or Two Windows WPLC

  24. Detours, Bridges and Compromises • FIRST INVENTOR TO FILE • For SME’s and Independents- Requires the Applicant to be an “Inventor” • WILLFUL INFRINGEMENT • Seagate En Banc Decision • DAMAGES APPORTIONMENT • Coalition Proposal – IPO support • POST GRANT REVIEW • Post Issuance Revocation (PIR) WPLC

  25. Detours, Bridges and Compromises • DAMAGES APPORTIONMENT – IPO resolution • Where an infringer shows that an apportionment of economic value is necessary to assure that damages based upon a reasonable royalty do not exceed the economic value properly attributable to the use made of the invention, such apportionment shall exclude from the reasonable royalty calculation the economic value shown by the infringer to be attributable to the infringer's incorporation into the infringing product or process of features or improvements, whether or not themselves patented, that contribute economic value to the infringing product or process separately from the economic value properly attributable to the use made of the invention. Where the claimant shows that the use made of the invention is the basis for market demand for an infringing product or process, the royalty may be based upon the entire market value of the products or processes provided to satisfy that demand. • The court shall identify all factors relevant to the determination of a reasonable royalty under this section and the court or the jury, as the case may be, shall consider such factors in making the determination.” WPLC

  26. Detours, Bridges and Compromises • Post Issuance Revocation(PIR) • Unitary Procedure for ALL Administrative Challenges • Replace ex parte and inter partes reexam • First window • 9 months - Others Join in 3 months • Preponderance standard, limited estoppel • Second Window • Clear and convincing standard – quiet title • All issues – 101, 102, 103, 112, DP • Limited Discovery • Predicated on adoption FTF, BM and IC reforms • Reissue Alone for Patentee corrections WPLC

  27. Both Houses are Back 4/17/07 • AND • The Prospects for Change to the U.S. Patent Law in 2007 are EXCELLENT! WPLC

  28. Thank you.Please contact me by email with any questions WPLC

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