PatentMonkey: Patent Reform More than Just in the Air

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“May you live in interesting times”, or so they say. The USPTO and IP attorneys have been handed very interesting times indeed with recent Supreme Court decisions and Congressional alignment in pushing ahead the Patent Reform Act of 2007. History may show the turning point of frustration to be NTP’s infringement case against RIM that almost shut down the Blackberry network. Ever since, a campaign against patent infringement litigation has swung public opinion towards resolving patent gaming.

Here’s a reader’s digest version of the Patent Reform Act’s main provisions and some insights from around the web…

First to File
The U.S. has bucked the trend globally by using a “first to invent” system that allowed proof by inventors showing they conceived an idea before someone else. A filing date at the USPTO is easy to track, and avoids costly contesting cases using less verifiable means to determine the true first inventor.

Post Grant Review
Far more controversial, the Patent Reform Act seeks to open up a window where patents can be reviewed after issuance. Specifically, a patent’s claims can be petitioned by anyone up to 12 months after grant or within 12 months after being claimed as an infringer on a patent. Companies riddled with infringement suits, like Microsoft and Intel, agree with this provision as it provides a timely review of whether the patent should have been issued in the first place. Critics complain that the PTO’s examiners are in place to do such a review in the first place and that a post-grant review is merely than second guessing and that more emphasis should be put on pre-grant funding and put less pressure on examiners to churn through large volumes of applications each quarter. This provision may not make it to vote as inclusion in any form looks shaky.

Tying Infringement Damages to a Patent Claim
The current system allows a patent owner to take claim to profits of a product that uses it, regardless of the number of other patented concepts a product may use. Semiconductors and the iPhone use many, many different concepts that require a large number of patent owners to grant rights to ensure a “clean” product that doesn’t infringe patent claims. The Act’s proposal attempts to separate infringement claims to value that the patent includes. Microsoft’s loss to Alcatel for $1.5 Billion has been used to show that a patent on multimedia shouldn’t lay claim to its OS revenues. Easy to say, harder to assess, especially in court where a judge and jury would need to make a determination of the value of oscillator rings for microprocessors, for example.

Restricting Venue for Litigation
Today many cases are filtered to the speedy and patent owner friendly Texas Eastern District Federal Circuit Court. The Act’s proposal would narrow the venue to logical venues where the owner resides with little room for “venue-shopping” in advance of filing litigation suits.

Applicant Quality Submissions
The Act requires a search report related to an application and the PTO has the right to deny submissions that do not submit one. While previous law required patent owners to submit relevant prior art that was uncovered during the invention and review process, this provision goes one step further stating applicants need to do a search for patentability as part of preparing a case for filing.

USPTO Allowed to Increase Fees as Needed
Insiders have known for a long time that the PTO is a cash generator for the government. With the boom in applications, the PTO was granted more budget by Congress, but future funding was still tethered to Congressional approval. Finally, the PTO can ensure that it can fund its needs (like hire more examiners) to handle its workload.

What’s not in the Act
Hopes for a two-tier system, or deletion of software patents altogether, are not being met. [Maybe the Abstract Factory’s proposal of using StarCraft as a means of setting software-based infringements, maybe not, but nice post]

Wrap
Combined with the recent KSR ruling on Obviousness, how good does the auction winner of this $2.86 million patent feel? To be sure, Intellectual Ventures is sitting in a precarious position for monetizing its large pool of filed and purchased patents see a different set of rules get pushed forward in 2007.

Where this all leaves individual inventors and small companies is a great question. Many lobbying efforts are being put forward to ensure big companies and universities’ needs are being kept in mind in revisions of the Act.

The key question is whether this Act can make it in one piece to vote or if it’ll lose steam going into and possibly after the August break. Think any of the Patent Reform Act will be dated 2007?

Copy of the original Patent Reform Act of 2007 via The Fire of Genius
Updates to the Act here and here via The 271 Patent Blog
Is the House getting it right on patent reform? via the Patent Hawk
Can Patent Reform Cross the Finish Line? Chicago IP Litigation Blog

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