Yesterday, Senators Leahy (D-Vt) and Hatch (R-Utah), and Representatives Berman (D-Calif.) and Smith (R-Texas) announced their new Patent Reform Act. You can read their press release on the Act here. The Act is very far reaching and is worth review, in order to prepare for it and/or inject yourself into the debate over it. Here are the the portions of the Act I found to be the most interesting (the other major changes follow in a list after the jump):
- Expands reexam procedures and allows third parties to file “petitions for cancellation” with the Patent Trial and Appeal Board asserting issues pursuant to 35 U.S.C. Section 282(a)(2) & (3). This proceeding will include a discovery mechanism and the patent will not be afforded a presumption of validity.
- Limits venue to districts in which either party resides or in which defendant committed infringing acts and has a regular place of business.
- Gives the Federal Circuit jurisdiction over interlocutory claim construction appeals.
Each of these is a major change. Petitions for cancellation could develop into another fast-track strategy for plaintiffs, like ITC proceedings for goods shipped internationally. And the lack of presumption of validity could make the proceedings very popular. The venue limits, though perhaps not surprising, could have a big impact. They will likely reduce the number of pre-answer, non-substantive litigation skirmishes that "venue shopping" results in. And they could be harmful to some communities, like Marshall, Texas, that have developed cottage industries around patent litigation. Finally, giving the Federal Circuit jurisdiction for interlocutory claim construction appeals may save money by reducing discovery, dispositive briefing and trials that are overruled by claim construction reversals. But it could also dramatically increase the Federal Circuit’s docket, if it has to see most cases twice, thereby doubling the volume of briefing, instead of once.
Here are the other less-major changes:
- Implements a pure first-to-file system, which would bring the United States in-line with the international patent community.
- "Streamlines" the process for submitting substitute statements in lieu of an inventor’s oath where the inventor is unavailable or unwilling to sign the oath.
- Allows assignees, or others with sufficient proprietary interest, to apply for the patent in their own name.
- Limits damages awards so that reasonable royalties are no greater than the invention’s contribution to the art.
- Requires that courts consider any non-exclusive licensing in determining reasonable royalty rates.
- Requires that a plaintiff make heightened proofs for a finding of willful infringement.