A shifting landscape

Patent reform gains momentum in Washington

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WASHINGTON, D.C.—In March, the U.S. Senate overwhelminglypassed the America Invents Act, which represents a major patent reforminitiative. The bill is said to streamline patent filing and touches manyaspects of the patent system, from filing all the way through the establishmentof fees and clean up the way patent infringement claims are adjudicated.
Many view the reforms as a way to bolster economicdevelopment and help keep America competitive globally, as important aspects ofthe U.S. patent process differ than those of other nations.
The bill was introduced in the Senate Jan. 25 by VermontDemocrat Patrick Leahy and with the support of seven Judiciary Committeeco-sponsors: Sens. Chris Coons (D-DE), Chuck Grassley (R-IA), Orrin Hatch(R-UT), Amy Klobuchar (D-MN), Jon Kyl (R-AZ), Joseph Lieberman (I-CT) and JeffSessions (R-AL). The full Judiciary Committee unanimously approved the bill,which then passed in the full Senate by vote of 95-5 on March 8.
Some experts have said this attempt at reforming the U.S.patent system is the most comprehensive effort since the 1952 patent act wasenacted.
Courtenay C. Brinckerhoff, partner at law firm Foley & LardnerLLP, says that this time around, the proposed changes will bring the U.S.patent system more in line with other nations.
"Although patent reform has been pending for a long time,this is the first year in many that it's gained traction," she says.
Brinckerhoff identifies the most important provision of thelegislation that passed the Senate as the proposed transition to afirst-inventor-to-file system. In addition, she says proposed changes to theway a challenge to a patent post-grant are administered will help refine andimprove the U.S. system. The "first-window" post-grant opposition proceedingwill be open for nine months after the grant of a patent.
"In addition," she says, "another issue that's proving to beimportant is the provision that the patent office will be able to keep itsmoney, rather than be allocated a budget."
Other provisions enable third parties to weigh in on patentapplications and to define a gatekeeping role for the courts among otherproposals to streamline the application process to help reduce the estimatedbacklog of approximately 750,000 patent applications.
The Biotechnology Industry Organization (BIO) also came downon the side of the legislation as it passed the Senate. The organizationrepresents the interests of more than 1,100 biotechnology companies, academicinstitutions, state biotechnology centers and related organizations across theUnited States and in more than 30 other countries.
Key to those interests is that small companies, includingthose in the biotech space, use their developing intellectual property to drawin investors to continue their work.
"Small biotech companies rely on intellectual property toattract investors to fund the lengthy and expensive research and developmentprocess necessary to bring breakthrough new therapies and other biotechproducts to patients and consumers," says BIO in a prepared statement. "It iscritical that patent reform legislation preserves and enhances the incentivesnecessary to sustain our nation's global leadership in biotechnology innovationand to spur the creation of high-wage, high-value jobs throughout the country.Improving our patent system can help America retain its global competitiveadvantage in biotechnology and other innovative industries, and will spur moreinvestment and job creation at a time when both are sorely needed."
The legislation was introduced on the House side as H.R.1249, which passed April 14 in the House Judiciary Committee by a vote of 32-3.
BIO does not support the America Invents Act as approved bythe House Judiciary Committee. While BIO representatives declined an interviewwith ddn on the matter soon after theJudiciary Committee's action, the group did a release a statement from BIOPresident and CEO Jim Greenwood.
"BIO has consistently praised House Judiciary CommitteeChairman Lamar Smith (R-TX) for his introduction of a comprehensive patentreform bill similar to the bill adopted by the U.S. Senate by a nearlyunanimous vote. Unfortunately, given the addition of the Goodlatte supplementalexamination amendment, added to the bill during Committee consideration, wehave no choice but to oppose floor consideration of the bill until this issueis repaired," the statement reads. BIO's objection to the House version of thelegislation involves a supplemental examination provision that would allowpatent holders to seek a review of their issued patents at their own risk. Anamendment introduced in the Judiciary committee by Rep. Bob Goodlatte (R-VA),BIO says, undercuts this provision by creating disincentives for patent ownersto use the new procedure by having the U.S. Patent and Trademark Office (USPTO)act as quasi-investigative body.
The thinking is that mechanism would be a fraud deterrent.Alleged instances of fraud in the patent approval process would be referred tothe attorney general.
"We commend Chairman Smith for all the work he has done tocraft a bill which is a clear improvement over prior House versions of patentreform legislation. We are pleased that the legislation will end, once and forall, the diversion of fees collected by the Patent and Trademark Office,allowing the agency to use all of its fees to hire more examiners, reduce thebacklog of pending applications and make other improvements to its operations.We also commend the inclusion in the bill of many other reforms that willimprove the patent system and enhance patent quality, including transition to a'first-to-file' system, the creation of an inter partes review system and the elimination of othersubjective elements of patent law," BIO states.
The rough waters encountered on the House side indicate thatthe smooth sailing the legislative effort enjoyed may have hit a squall line.
"Biotech wants a shorter time period for a patentchallenge," says Brinckerhoff. "That tension is keeping the debate going."
It is expected that the legislation will be introduced in theHouse in May.

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