Patent Reform Act of 2009 - Odds of Becoming Law Improved

April 3, 2009

April 2, 2009, the Senate Judiciary Committee voted 15-4 to report a revised, compromise version of the Patent Reform Act of 2009 to the full Senate. The approved version of the bill provides significant changes to existing patent law. The following are some of the notable changes made to existing law by the bill:

   
First-to-File: The current First-to-Invent system is abolished in favor of a First-to-File system, bringing the U.S. patent system closer to harmonization with other major foreign patent systems. The effect of this change is likely to create a “race-to-file,” which may prejudice patent applicants that delay filing patent applications.
   
Oaths/Declarations: Existing Oath/Declaration requirements are eased to allow patent owners to file patent applications on behalf of inventors.
   
Damages: Judges are provided with a “gatekeeper” function, increasing a judge’s role in identifying appropriate legal standards and relevant factual contentions for the jury.
   
Willfulness: The “objective recklessness” standard annunciated in In re Seagate Technology, LLC, is essentially codified. However, safe harbor provisions are provided for accused infringers that reasonably relied on advice of counsel, sought to modify conduct to avoid infringement or had a good faith belief that the patent was invalid or unenforceable.
   
Pre-Grant Opposition: Third parties are allowed to submit information for consideration by examiners prior to issuing a patent application, including concise statements of the relevance of the information to the subject matter contained in the patent applications.
   
Post-Grant Opposition: The existing patent reexamination system is expanded and a new post-grant review process is created for the 12-month window following issuance (or reissuance) of a patent.
   
Venue/Jurisdiction: The Court of Appeals for the Federal Circuit’s (CAFC) decision in In re TS Tech USA Corp., is essentially codified, limiting the venue for bringing civil actions for patent infringement, including declaratory judgment actions.
   
Interlocutory Appeals: The CAFC’s workload is increased, requiring the CAFC to accept interlocutory appeals of claim construction orders when certified by the district court.
   
PTO Authority: The Director of the U.S. Patent and Trademark Office (USPTO) is given rulemaking authority to set or adjust fees.
   
Micro-Entity: A micro entity status is added in addition to the current small and large entity statuses, providing the USPTO with greater flexibility to adjust fees based on the size or resources of the entity.
   
Best Mode: The requirement that a specification contain the best mode of carrying out the invention is kept. However, defenses to patent infringement based on invalidity because best mode was not disclosed are eliminated.
   
Judicial Pilot Program: A pilot program is created in at least six district courts from at least three different circuits that will receive funding for training in patent law, and to hire law clerks devoted to working on patent cases.
   

The current bill, which appears to have broader support in the Senate than last year’s bill, may be up for action by the full Senate within a few weeks - the Senate is in recess for the next two weeks. The Intellectual Property Owners Association has posted a redline copy of the Senate patent reform bill showing yesterday's major amendment and two less-significant amendments made during meetings of the Judiciary Committee on March 26 and 31, 2009.

The revised Patent Reform Act of 2009, including S.515 and all amendments is available at: judiciary.senate.gov.

For more information about patent law, please visit our Intellectual Property practice.

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