Brief Status of Patent Reform Acts
May 01, 2017
There are seven proposals for patent reform currently in various stages of legislation. The Innovation Act currently before the House of Representatives includes some significant changes. Among other things, vague demand letters would be considered a fraudulent business practice unless the letter articulated how the accused product infringes the patent. In addition, the Act would raise the pleading requirements for patent cases and require plaintiffs to identify all accused products and describe how they infringe if such information is “reasonably accessible.” The Act also contains discovery limits and provides that prevailing parties can recover their attorney fees unless the losing party was reasonably justified in its position.
Similarly, the Protecting American Talent and Entrepreneurship Act (“PATENT Act”) now before the Senate would raise pleading requirements, but would also provide for a stay of litigation against customers of infringing products, and would change the standard of review during USPTO proceedings. Currently, patent claims examined during USPTO proceedings are given the Broadest Reasonable Interpretation. But the PATENT Act would eliminate this and instead require the PTO to construe claims in the same manner as a federal court.
The STRONG Patents Act (Support Technology and Research for Our Nation’s Growth) would also eliminate the Broadest Reasonable Interpretation standard, but would also require (among other things) parties to file any ex parte reexamination request within one year after being sued. It would also prohibit inter partes or post-grant reviews while the patent is the subject of a reissue or reexamination proceeding.
The TROL Act (Targeting Rogue and Opaque Letters) would authorize state attorneys general to prosecute parties sending demand letters in bad faith as an unfair or deceptive trade practice.
The Demand Letter Transparency Act goes a bit further and provides (among other things) that any party who sends more than twenty demand letters during a single year must identify the patent and show it is the owner with the right to assert the patent, all licenses to the patent and the terms on which it has been licensed, and all cases asserting the patent. Importantly, the Act would also create a publicly accessible and searchable database of all such demand letters.
The Innovation Protection Act is similar to the STRONG Act and would establish a fund for the USPTO to keep fees collected by the USPTO for USPTO purposes until expended. Historically, Congress has been diverting a portion of the funds received by the USPTO for other purposes.
Lastly, the Grace Period Restoration Act is intended to clarify the one-year grace period under the America Invents Act. To encourage early disclosure by universities and other research institutes, the AIA essentially provides that early disclosures of an invention by the inventor (or authorized individuals who obtain the invention from the inventor) more than one year before filing for patent protection does not render the invention unpatentable. An issue has been raised whether this grace period applies to all disclosures following the inventor’s original disclosure or only certain disclosures. The PTO has taken a narrow view of this protection and held that only certain disclosures can fall within the grace period. The Grace Period Act, however, would clarify that any disclosure after a qualified disclosure by the inventor or other authorized person would not be prior art.