Senate Judiciary ‘90 Percent There’ on Patent Overhaul, Feinstein Says
Just as Senate Judiciary Committee leaders said they were near a breakthrough on contested provisions of the Patent Reform Act (S-515) during a markup Tuesday, another senator warned that some proposals would paralyze the Patent and Trademark Office. Sen. Jon Kyl, R-Ariz., who has sponsored his own overhaul bill (S-610), asked his colleagues to junk a provision on post-grant review of patents from the House-approved overhaul bill from the last Congress. Chairman Patrick Leahy, D-Vt., told Kyl that the Republican needed to be involved more than “intermittently” in drafting changes. Kyl said his packed schedule in other committees this week may make that difficult.
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“Over the last several days we've made more progress” on a host of disputed issues since S-515’s markup last week (WID March 27 p2), Leahy said. Leahy, Ranking Member Arlen Specter, R-Pa. and Sen. Dianne Feinstein, D-Calif., have an “agreement in principle” on so-called gatekeeper language that would give judges more authority to prevent excessive damages awards, he said. It would replace a provision to “apportion” damages based on a patent’s specific contribution over the prior art. The matter has pitted companies like Google and Symantec against the pharmaceutical industry (WID March 30 p6).
“I believe we're on the brink of an accommodation here,” thanks to round-the-clock staff negotiations, Specter said. Another provision agreed on would say that an inventor’s failure to describe the “best mode” for a patent’s use wouldn’t necessarily invalidate it, he said. Language on venue that would bar patent owners from filing claims in far- flung jurisdictions considered friendlier to them will be replaced by a milder “convenience of the parties” standard, Specter said. Those provisions are scheduled for a vote at a markup Thursday.
Leaders have “essentially reached agreement” on damages, post-grant review, venue, inequitable conduct, best mode, interlocutory appeals and the willfulness standard for infringement, Feinstein said. At last week’s markup, she warned lawmakers that retaining the apportionment provision on damages would kill S-515. “I think we're 90 percent there, and it’s about as good as can be done to reconcile the different business models and different business interests,” she said.
On Tuesday, the committee approved a Leahy amendment incorporating provisions suggested by Republican Sens. Chuck Grassley of Iowa and Tom Coburn of Oklahoma. It would expand the PTO’s telework program and let universities with federally funded research keep a far greater share of royalties from patents they commercialize -- 85 percent, up from 25 percent -- to reinvest in research.
The gatekeeper language is a “vast improvement” over apportionment, but other provisions are “troubling,” Kyl said. The post-grant review language from last year’s House- approved bill will create a system that’s “impossible to administer,” he said, based on conversations with PTO staff. By setting a low bar for ex parte reexamination proceedings - - allowing petitions that raise an “interesting question” about a patent, not “serious doubts” -- more than 90 percent of requests would be granted, he said. “It may well cause a train wreck at the agency,” overwhelming the PTO with new cases, and force patent owners to spend hundreds of thousands of dollars to defend their patents, a “death sentence.” Any proposed changes should be run past PTO leaders first, Kyl said.
The allowance for multiple inter partes reexaminations under the bill could be used as a “delaying tactic” in patent litigation, Kyl said. The new willful-infringement standard agreed to by leaders could actually weaken the Seagate decision by the U.S. Court of Appeals for the Federal Circuit that tightened “willfulness” language, he added.