The Patent Act of 2005, working its way through Congress, promises to change patent law in many significant ways that affect businesses.
Although the change in priority from the current first-to-invent to the first-to-file has received the most attention, several other provisions in the patent reform legislation relating to third-party protests and remedies for infringement may have a greater impact on the decisions facing businesses. Although the legislation is subject to change as it works its way through Congress, some of the key changes are discussed below.
First-to-invent
The United States has long followed the policy that a patent for an invention should belong to the first person to invent. Under the new act, the United States would cease awarding patents to the first person to invent and would instead award patents to the first person to file an application for the invention.
Proponents argue this change will assist in efforts to harmonize international patent law and help streamline the application review process in the patent office. Opponents argue the provision is biased against individual inventors and small businesses that do not have resources to immediately file patent applications for each innovation.
A recent study completed by a former Commissioner of Patents who originally opposed the change indicates these parties would not be as adversely affected as opponents have argued.
Post-grant opposition
Patent infringement litigation tends to be very lengthy and expensive. Moreover, many lawsuits result in the subject patents being declared invalid based on prior art that was known in the relevant industry but was not considered by the patent office.
The act offers an opportunity to bring prior art to the attention of the patent office during a post-grant opposition period.
Under the proposal, a competitor or other member of the public would have an initial window of nine months after a patent is granted to request that the patent office reconsider. Proponents contend the existence of the procedure, whether used or not, would instill confidence in a patent’s validity.
A proposal to provide a second window of six months after a notice of infringement throughout the life of a patent is also under consideration.
Willful infringement
In virtually every patent law suit, the owner accuses the infringer of willful infringement. The typical basis is that the accused knew of a patent or a claim of patent infringement, often through a form letter from the patent owner, and continued to engage in the infringing conduct.
However, many such form letters are not specific as to the accused’s products or the patent being infringed. Moreover, proponents of patent reform contend the fear of willful infringement has led many businesses to forbid employees to review competitors’ patents, lest that review lead to a finding of willful infringement.
Under the act, a finding of willful infringement is restricted to those situations in which (1) the accused infringer receives a detailed written notice of infringement from the patent owner listing the specific patents alleged to be infringed and the specific products alleged to be infringing; (2) the accused infringer intentionally copied the patent subject matter or (3) the patent was asserted against the accused infringer in a prior litigation.
Other remedies
The act also affects other remedies available in patent litigation. Currently, a permanent injunction against a party found by the court to be an infringer is almost universally issued.
Under the act, a court awarding injunctive relief must consider the fairness of the remedy in light of all the facts and the relevant interest of the parties associated with the invention. Thus, the possibility exists that courts may, subject to the required review, issue a compulsory license to the infringer instead of an injunction.
The Patent Act of 2005 would change the interaction between patent law and business. Smart businesses will monitor the legislation and be prepared to adapt if and when it is enacted into law.
Michael L. Dever, Esq., is chair of the Intellectual Property Section at Buchanan Ingersoll PC, which recently acquired the IP firm of Burns, Doane, Swecker & Mathis LLP, adding 55 attorneys to the firm. Reach Dever at (412) 562-1637 or [email protected].
