Patent Reform Fast-tracked Through Senate Committee

Just two days after the House version of a sweeping patent reform bill passed the US House of Representatives by a voice vote - meaning the supporters were obviously louder than the opponents - the bill as reported to the Senate swept through the Judiciary Committee, most likely with very few amendments.

One of the bill's chief provisions changes US Code to increase the burden on those raising challenges to previously issued patents who wish to argue willful infringement.

Under current law, a plaintiff may make a case before a jury that a defendant maliciously infringed upon its intellectual property, and if the jury is convinced, the plaintiff may be entitled to three times the assessed value of the innovation - in other words, the dollar value of how much the infringing company improved the state of the art, times three.

Critics of current law claim it gives plaintiffs incentive to wait until the allegedly infringing innovation succeeds, especially when a defendant with more marketing clout than the plaintiff could possibly muster ensures that success.

As the Senate language of the bill reads (the post-committee version has not yet been published), the formula for determining the market value of an innovation becomes tougher: "Unless the claimant shows that the patent's specific contribution over the prior art is the predominant basis for market demand for an infringing product or process," S. 1145 now reads, "damages may not be based upon the entire market value of that infringing product or process."

Also, more emphasis is placed on challenging the validity of an innovation during the application phase. After an application is published, a plaintiff may have 12 months to challenge its validity (during which time, the application may conceivably be granted). But the preferred basis of the challenge, as the amended law would read, is not whether the applicant seeks to harm the plaintiff, but instead whether the innovation is substantial, beyond something some random guy on the street would have come up with on his own.

"A patent for a claimed invention may not be obtained though the claimed invention is not identically disclosed," the bill read when reported to the Senate, "if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains."

If a serious challenge to the bill were to have been mounted, it might have concerned its dual approach to defining the role of the applicant. The 12-month challenge period provision would have the applicant be someone other than a person of ordinary skill. While patents are owned by corporations, they are officially issued to individuals, often to people employed by corporations listed in parentheses.

Today, when a plaintiff in an infringement suit claims infringement against a company, it claims harm on the part of the company as a whole. But the new provision would have challengers focus instead on the skill and acumen of the person to whom a patent would be (or has been) issued, rather than the corporate strategy of the company that employs him or her.

Meanwhile, at the same time, the bill attempts to clarify the law's language regarding individuals who apply for patents on behalf of inventors, even though these agents may not actually have any skill at all. "A person who otherwise shows sufficient proprietary interest in the matter," another part of the bill reads, "may make an application for patent on behalf of and as agent for the inventor on proof of the pertinent facts and a showing that such action is appropriate to preserve the rights of the parties."

A spokesperson for the Coalition for Patent Fairness yesterday reacted favorably, as expected: "There is a reason patent reform has been passed during the last two days by both committees," said Jonathan Yarowsky in a prepared statement: "It is because Congress recognizes that our patent system must work efficiently and fairly if American companies are to keep their competitive edge in driving the economy forward."

There's another reason for the fast track that Yarowsky didn't mention: With both the Judiciary Committee's chairman and ranking Republican member - Patrick Leahy (D - Vt.) and Orrin Hatch (R - Utah), respectively - listed as the bill's principal sponsors, any opposition there might have been probably never have had much of a chance. With the Senate anxious to debate other pressing matters if it is to maintain any hopes of a summer recess, the "sunset" period for plaintiffs seeking treble damages may be heading to "twilight" faster than anticipated.