United States Patent Reform – Give Up and Do It Right?

United States Patent Reform – Give Up and Do It Right?

Lee Hollaar is a professor of computer science at the University of Utah, where he teaches engineering and intellectual property law as well as networking and operating systems.

On June 8, 2005, the Patent Reform Act of 2005 was introduced in the United States House of Representatives, to whatever fanfare accompanies patent legislation. Its primary sponsor, the Chair of the House Judiciary subcommittee for intellectual property, called it "the most comprehensive change to U.S. patent law since Congress passed the 1952 Patent Act." Because of the extensive discussions with stakeholders including revisions to circulated draft language, and a number of hearings before it was introduced, he predicted "In a couple of weeks, there should be a general agreement on a piece of legislation" and schedule the start of a fast track to passage.

That didn't happen, and after the Patent Reform Act of 2006, the Patent Reform Act of 2007, and the Patent Reform Act of 2008, it appears that Congress may be no closer in passing the Patent Reform Act of 2009. And if it does, it certainly won't be the big change that was promised.

So, what went wrong?

First, the reason of the big change was never clear. Was going to "first inventor to file" a goal, or just one part of "harmonization." But harmonization requires more than just changing patent priority from first-to-invent to first-inventor-to-file. The original House bill also included harmonizing patent applications by getting rid of the United States' special "best mode" requirement, harmonizing what is prior art by not having the changes effective until Japan and Europe join the United States (and Canada) in having a one-year grace period for applicants, and creating a post-grant opposition proceeding to handle those cases where national interpretations of patent law differ.

Those provisions were scattered throughout the bill, and over time Congress seems to have forgotten that they were part of harmonization. The latest Senate bill does not drop "best mode," but strangely makes it a requirement that can't be brought up in a post-grant review, but could be used to invalidate a patent in litigation. It does not couple the change in priority to first-inventor-to-file with Europe and Japan adopting an inventor grace period, so, even if it becomes law, there won't be harmonization and its benefits.

The proponents of the bill also included a wish-list of other provisions, since you might as well get some special favors for your support of the legislation. These included making it more difficult to raise the issue of applicant conduct to invalidate a patent, limits on continuing applications, how damages should be handled when the patented invention is just a part of the infringing thing, and when injunctions should be granted.

The latter caused the first break between the proponents, killing any hope for fast passage of the 2005 bill. It was dropped from the bill after the Supreme Court moderated the Federal Circuit's rule on injunctions in its 2006 eBay v. MercExchange decision, even though that case just reiterated a general rule in line with the original 2005 bill, rather than the specific language each side wanted. The current split over the damages provision is a replay of the injunctions fight, with groups of proponents trying to get their dream language as a replacement for the general and sensible language in the 2005 bill.

And along the way, other wish-list provisions were added to try to gain supporters, and then dropped, further obscuring the big goals of the legislation.

Right now, it appears that goal has shifted from harmonization to whatever it takes to pass a "patent reform" bill to end this four-year exercise. It's unclear whether the "reform" will actually improve things, is change for the sake of change, or will make things worse. Certainly dropping the requirement that Japan and Europe adopt a one-year grace period as the quid pro quo for the United States going to first-inventor-to-file will likely mean that any future harmonization won't include a grace period, since the United States will have already given up its bargaining chip.

In the process, language is being changed overnight to get senators to vote for the bill, with seemingly little thought of how the changes affect the original goals of the bill or even the existing patent system. And that caused one of the bill's original sponsors, Orrin Hatch (R-Utah) to vote against it in the Judiciary Committee, saying "My primary purpose for doing this bill was to improve patent quality and limit unnecessary and counterproductive litigation costs. I do not believe the bill, in its current form, accomplishes these goals."

The great architect Daniel Burnham said: "Make no little plans. They have no magic to stir men's blood and probably will not themselves be realized." He could have been talking about "patent reform" in the United States.

So, what should a patent reform bill do that will improve the patent system for the United States and the world? In a follow-up to this, I'll tell you my ideas, but right now, it's time to hear from you ...

Professor Hollaar is a patentee and registered patent agent, and has been an expert consultant in a number of prominent cases, include antitrust cases against Microsoft. While on sabbatical during the 1996-1997 academic year, he was a Committee Fellow with the United States Senate Committee on the Judiciary, working on the last major patent reform legislation as well as what became the Digital Millennium Copyright Act.  He is the author of Legal Protection of Digital Information, online at digital-law-online.info.