1. The Long and Winding Road to U. S Patent Reform Alan J
The Long and Winding Road to U.S Patent Reform Alan J. Kasper Partner Sughrue Mion PLC
February 19
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)
February 19
WPLC

3. All roads pass through the Congress
February 19
WPLC

4. WHERE WE HAVE BEEN: 2001-02 2003-04 2005-06 2007-08 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)
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
February 19
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
February 19
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
February 19
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
February 19
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
February 19
WPLC

10. Patent Reform Act of 2005 -The Smith Bill: HR 2795 (2005)
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)
February 19
WPLC

11. Patent Reform Act of 2005 –Chairman’s Substitute Amendment: HR 2795 (2005)
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
February 19
WPLC

12. Coalition Print (2005) 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
February 19
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)
February 19
WPLC

14. Patent Quality Assistance Act -The Hatch Leahy Bill: S 3818 (2006)
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)
February 19
WPLC

15. What are the common themes on the road to reform?
STANDARDS FOR FILING
STANDARDS FOR EXAMINATION
PROTECTION OF THIRD PARTY RIGHTS
February 19
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
February 19
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
February 19
WPLC

18. Common Themes from the Several Proposals
STANDARDS FOR EXAMINATION
Inventor’s Grace Period (NAS, AIPLA HR2795, Substitute, Coalition Print, S3818)
Only Disclosure by or derived from the Inventor
Standard of Obviousness (FTC, NAS, Berman – KSR may remove need for legislation)
February 19
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
February 19
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
February 19
WPLC

21. Common Themes from the Several Proposals
PROTECTION OF THIRD PARTIES
More Limited Injunctive Relief (Berman HR2795 – 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)
February 19
WPLC

22. NEW Themes PROTECTION OF THIRD PARTIES
Attorneys Fees, Loser Pays (S Supported by IPO, Not supported by AIPLA)
Interlocutory Appeals for Claim Construction Cases (S Not supported by AIPLA)
Enhanced Rule Making Authority for USPTO (S Not supported by AIPLA )
February 19
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
February 19
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)
February 19
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.”
February 19
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
February 19
WPLC

27. Both Houses are Back 4/17/07 AND
The Prospects for Change to the U.S. Patent Law in are EXCELLENT!
February 19
WPLC

28. Thank you. Please contact me by email with any questions
February 19
WPLC