A fair, balanced and effective patent system is indispensible in promoting investment in research and development, job creation, global competitiveness and economic growth — goals that lawmakers from across the ideological spectrum can support. Yet US patent law has not been comprehensively modernized in more than 50 years.
Led by Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) and Ranking Member Chuck Grassley (R-Iowa), the full Senate is now slated to consider the Patent Reform Act of 2011 (S.23). This debate presents an opportunity to forge a new consensus on a reform bill that addresses the most pressing problems with the US patent system as it stands today.
The legal landscape has changed since the Senate took up the patent debate six years ago. Since then, the Supreme Court and Court of Appeals for the Federal Circuit have, through a series of important decisions, provided greater clarity in the law. This has helped curb abuses, rendering some provisions of the current bill unnecessary at this time.
After significant debate among a broad range of stakeholders, BSA believes consensus — and true benefits for inventors of all sizes, across all sectors of the economy — can be now secured by carefully crafting a bill to tackle six key issues:
1.) Funding the US Patent and Trademark Office (USPTO)
The USPTO needs the freedom to set its own fees in order to reduce the time in which patent applications remain pending, enhance patent quality and improve the overall efficiency of the Office’s operations. These user fees, paid by innovators to fund the essential services the USPTO provides, should not be diverted for other government purposes.
2.) “Weeding out” bad patents
A post-grant review system for patents should be established to provide an early opportunity to challenge newly issued patents and thereby improve overall patent quality. Also, the inter partes reexamination process should be made more effective by removing existing disincentives and avoiding new barriers to instituting a reexamination.
3.) Allowing third parties to submit prior art
Third parties should be allowed to submit prior art for the Patent Office to consider in connection with published patent applications that are pending. This opportunity would enlist the public as a partner with the USPTO in promoting patent quality.
4.) Putting an end to the cottage industry of “false-marking” litigation
There has been a rise in aggressive litigation alleging “false marking” of products containing patented inventions. The damages regime for these false-marking cases should be changed to prevent outsized awards where no one has suffered any actual harm.
5.) Adopting a “first-inventor-to-file” system
The US should join the rest of the world and adopt a “first-inventor-to-file” system.
6.) Non-discrimination between types of inventions
Innovators in the United States increasingly face attempts by foreign governments to restrict the availability of patents in key areas of technology. For many years, US officials have fought against such initiatives, recognizing their impact on US competitiveness. Accordingly, the Senate should reject provisions written so broadly as to ban patenting of any product that contains, for example, a tax-planning feature. Such an exclusion from patentability would invite ill-advised carve-outs from patent protection that would ultimately harm US innovation and competitiveness in the global marketplace.
Much has changed in the last 50 years. It’s time for US patent law to catch up. These six elements can form the basis for much-needed reform.