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Patent Law Summary
Patent Reform Act of 2007
S. 1145, H.R. 1908, 04/18/2007
Basic Information
This historic proposed legislation, which seeks to overhaul the patent review process and deter litigation, was introduced in the Senate by Sen. Patrick J. Leahy (VT) on April 18, 2007, and co-sponsored by seven others, and shall be known as the “Patent Reform Act of 2007.”
A counterpart bill in the House of Representatives was introduced also on April 18, 2007, sponsored by Rep. Howard L. Berman (CA), and co-sponsored by 23 other members of the House.
The bill in the House was passed on September 7, 2007 by a vote of 220 to 175. On September 10, 2007, the bill from the House was received by the Senate which undertook its first reading on the same day. The next day, the bill underwent a second reading, and was placed on the Senate Legislative Calendar under General Orders.
One of the major features of this bill is the creation of Patent Trial and Appeal Board (PTAB) in place of the existing Board of Patent Appeals, and would be constituted by the Director, Deputy Director, Commissioner for Patents, Commissioner for Trademarks, and the administrative patent judges. Inter alia, the PTAB is tasked to conduct post-grant proceedings, and review adverse decisions of examiners rendered in reexamination proceedings. It is only the PTAB which has the authority to grant re-hearings.
Another major feature of the bill was that experts in a specific field would be allowed for the first time to submit their views about patent applications before they were granted.
Likewise, it is provided that “a person who is not the patent owner may file with the PTAB a petition for cancellation seeking to institute a post-grant review proceeding to cancel as unpatentable any claim of a patent on any ground that could be raised under paragraph (2) or (3) of section 282(b) (relating to invalidity of the patent or any claim).
For this purpose, procedures for such post-grant review are laid down under the bill, including provisions seeking to prevent harassment by patent owners. This post-grant review is an alternative to legal action.
The Director of the PTAB is also vested with regulatory authority, i.e., “promulgate such rules, regulations, and orders that the Director determines appropriate to carry out the provisions of the statute or any other law applicable to the United States Patent and Trademark Office or that the Director determines necessary to govern the operation and organization of the Office.”
The provision on venue of actions was also revised in that patent cases can be initiated in the judicial district where either party resides, unlike in the old provision where the residence of the defendant party was the prescribed venue, and that with respect to the “residence” of a corporation, it is deemed, under the bill, is the principal place of its business or place of incorporation.
Under this bill, an “inventor” is deemed to include a joint inventor and co-inventor, while the effective filing date of a claimed invention is considered as the filing date of the patent or patent application. The provisions on patent interference disputes were also amended.
In connection with actions seeking to collect damages for patent infringement, the bill mandates the court “to conduct an analysis to ensure that a reasonable royalty under paragraph (1) is applied only to that economic value properly attributable to the patent’s specific contribution over the prior art. In a reasonable royalty analysis, the court shall identify all factors relevant to the determination of a reasonable royalty under this subsection, and the court or the jury, as the case may be, shall consider only those factors in making the determination.”
Likewise, the bill provides for increased damages for willful patent infringement, while at the same time expanding the scope of the defense of prior use.
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