Archive for the ‘Legislation’ Category

Patent Reform: From First to Invent to First to File

Thursday, March 3rd, 2011

One of the central pieces of The Patent Reform Act of 2011 (“S.23”) now under consideration in the U.S. Senate is the change from the current first-to-invent (“F2I”) system with a first-inventor-to-file (“F2F”) system.  In the U.S., as an illustration of the F2I system, even if the first inventor files his/her application after a later and independent inventor, the F2I party has  the right to the patent as long as he/she can prove that theirs is the earliest invention at an “interference proceeding.”  With the changes incorporated as part of S.23, in this example the later, but more diligent(?), inventor would win the rights to the patent thanks to the F2F system.

This change would bring the U.S. system into accord with most patent systems overseas, but the transition would bring about several changes to the strategy of patent filing and the relative value of maintaining inventions secret a a competitive tactic.  For a thorough and systematic analysis of the nuances and combinations of timing and prior art disclosures in patent prosecution under S.23, we recommend a close read of the guest post on the Patently-O blog by Prof. Ann McCrackin and JD candidates Brodsky and Chiluwal.

The possibility for derailing this part of the Reform has apparently closed today (March 3, 2011), as Sen. Feinstein’s amendment on the issue failed to get the necessary support, as Gene Quinn has reported.

 

Patent Damages Reforms to be Considered Next Month

Thursday, February 24th, 2011

Reuters reported that Majority Leader Harry Reid announced that the Senate aims to begin consideration next month, possibly by March 14, of a bipartisan bill to revamp the U.S. patent system and reduce the likelihood of what critics see as “excessive damage awards.”

The two areas of damages that we are watching closely are the reforms to the False Patent Marking provisions (35 USC §292) and to Patent Infringement Remedies (35 USC §284).

False Marking

Current law allows “Any person” to sue for the “$500 for every such offense” penalty (35 USC 292(b)) and this has created a veritable cottage industry of “patent marking chasers,” particularly ever since the $500 penalty has been applied to each item so marked, creating windfall profits to the filers (and the US Treasury).

The proposed reform bill seeks to strike this subsection with the following language: ”(b) Any person who has suffered a competitive injury as a result of a violation of this section may file a civil action in a district court of the United States for recovery of damages adequate to compensate for the injury.” Consequently, the reform on this issue aims at limiting recovery to compensatory damages to persons with actual damages.

Damages Determination

The proposed reform includes, for Section 284 – Damages, adding a subsection specifying the procedure for determining damages whereby: (a) The court shall identify the methodologies and factors that are relevant to the determination of damages to be considered by the court or jury; (b) The parties shall specify in a timely fashion the methodologies and factors proposed for instruction to the jury in determining damages, including the underlying legal and factual bases for their assertions; and (c) The court shall also consider whether one or more of a party’s damages contentions lacks a legally sufficient evidentiary basis.

Further reading

A full summary of the bill can be obtained on the Library of Congress’ THOMAS website.