[Ip-health] Patent Reform Act Of 2007: Bill Proposing Fundamental Changes To The Patent System

[Gaëlle Krikorian]

United States: Patent Reform Act Of 2007: Bill Proposing Fundamental
Changes To The Patent System (H.R. 1908) (S. 1145)

Jones Day
20 April 2007
Article by Robert C. Kahrl, Ken Adamo, Brian M. Poissant, Robert O.
Lindefjeld and Cecilia R. Dickson

On April 18, 2007, the much anticipated, most recent incarnation of
patent reform legislation was introduced in both the House of
Representatives and the Senate. The bill amends Title 35 of the
United States Code relating to the procurement, enforcement, and
validity of patents. If the bill becomes law, the U.S. patent system
will undergo its most substantial overhaul since Congress passed the
Patent Act in 1952.

The Reform Act will affect virtually every facet of the patent
process. Key features proposed in the bill include:

     * Transitioning to a "first to file" system (35 U.S.C. § 102).

     * Eliminating interference proceedings and instituting
derivation proceedings (35 U.S.C. § 135).

     * Permitting the filing of a substitute statement in lieu of
executing an inventor's oath or declaration (35 U.S.C. § 115).

     * Permitting assignees to file applications in their own names
(35 U.S.C. § 118).

     * Enumerating a damages analysis whereby the court determines
that a reasonable royalty is applied only to that economic value
properly attributable to the patentee's specific improvement over the
prior art (35 U.S.C. § 284).

     * Describing a damages analysis that provides, "Unless the
claimant shows that the patent's specific improvement over the prior
art is the predominant basis for market demand for an infringing
product or process, damages may not be based upon the entire market
value of the infringing product or processes" (35 U.S.C. § 284).

     * Setting limitations on triggering and finding willful
infringement and the subsequent trebling of damages (35 U.S.C. § 284).

     * Establishing "prior user" rights and defenses (35 U.S.C. § 273).

     * Providing post-grant review procedures (35 U.S.C. § 321 et al.).

     * Replacing the Board of Patent Appeals and Interferences with
the Patent Trial and Appeal Board and altering the duties of the
Board members (35 U.S.C. § 6).

     * Altering venue requirements for patent cases and providing for
interlocutory appeals after a claim construction decision (28 U.S.C.
§ 1400; 28 U.S.C. § 1292).

The Reform Act will change the patent system fundamentally by
shifting from a "first to invent" system to a "first to file" system
when it comes to determining who is entitled to patent protection for
a given invention. This shift will require all companies to
reevaluate their strategies relating to patent prosecution.

In the months leading up to the introduction of the bill, industry
groups, legal organizations, and other think tanks weighed in on the
substance of the bill. The upcoming months will be filled with
testimony and hearings from the various interests, and amendments to
the bill will be forthcoming.

Jones Day is actively tracking the developments as they occur. The
Firm has created a Patent Law Reform–Updates web site (accessible
from www.jonesday.com/patentlawreformupdates), where materials
including the bill, a redlined version of the Patent Reform Act of
2007, hearing testimony, witness statements, and interest-group
position papers will be available. This web site is also an archive
of materials created since the introduction of patent reform
legislation in 2005. Upcoming hearing dates are posted as they are
announced and scheduled.