Pro Software Lobby Drives Legislative Rewrite
Last week, the proposed patent reform legislation (HR 3309) was seemingly stalled for the remainder of 2013. This road block was primarily erected by the Business Software Alliance, and other pro software patent lobbyist that were taking issue with certain proposed changes to Section 18 of the America Invents Act (AIA). As a reminder, Section 18 of the AIA defines the Transitional Program for Covered Business Method (CBM) patents. The CBM proceeding is a post grant patent challenge program managed by the USPTO’s Patent Trial & Appeal Board (PTAB). The CBM program has proven especially successful in cost effectively combating and shutting down business method patent litigation.
The proposed changes to the CBM proceeding drawing the most heat were: 1) the recalibration of the definition of a business method patent to de-emphasize financial services aspect, while expanding the definition to embrace more generic software functionality; and 2) repeal of the “transitional” nature of the program (8 years) to make it permanent. Not surprisingly, large software patent filers were not at all enthusiastic.
Faced with the prospect of further hearings and delay, and with the White House clamoring for something, anything that can be spun as progress in the wake of the Obamacare fallout, HR 3309 has been repackaged by dropping these controversial CBM provisions (existing mark-up here).
With additional mark-up expected in the coming days (although likely very minor), look for a companion bill to be introduced on the Senate side by Senator Leahy. As was the case for the AIA, conference can be avoided if the Senate follows the Goodlatte lead, which appears to be the plan.
Patent Reform for Christmas is looking like a distinct possibility.
Caution Urged by Members of House Judiciary Committee
With two previous working drafts circulated in the House of Representatives, the proposals of the Goodlatte Bill were thought to be thoroughly “baked in” from a legislative perspective. However recent commentary from the judiciary on the proposed district court pleading/procedural changes, taken together with the very limited history of the America Invents Act changes, has led some to urge caution on further reforms. Although the House Judiciary Committee has already conducted a hearing on the Bill to determine the need for mark-up, a number of committee members are now urging a second hearing to address growing concerns.
The Hill reports that a bipartisan group of committee members, including ranking member John Conyers (D-Mich.) and Reps. Doug Collins (R-Ga.) and Hank Johnson (D-Ga.) sent a letter to Chairman Goodlatte seeking a second hearing on the Bill. The letter is reported to explain that:
“The impact of the proposed legislation will be profound. . . . .many Americans who will be affected by it — from individual inventors to federal judges to investors in the nation’s largest corporations to small businesses — continue to express strong opinions about its merits” . . . . .the committee should “schedule another hearing in order to consider additional viewpoints before voting on legislation that will affect this vital part of the American economy”
With a sizable contingent of the House Judiciary committee throwing up a procedural road block this late in the game, there would seem to be little time left in 2013 to advance the effort further. Indeed, as it appears that the Senate is poised to follow the Goodlatte mark-up with a companion bill (to avoid conference), it would seem that delaying the mark-up will stall further progress for the remainder of 2013.
Hearing to Consider Issues for Mark-up
Although the Innovation Act (H.R.. 3309) was only introduced last week, as expected, Congress is wasting no time pushing the “patent reform” issue forward. Today at 10AM the House Judiciary Committee will hold a hearing on the content of the Bill entitled: Improving the Patent System to Promote American Innovation and Competitiveness. The hearing will alert the committee of specific concerns prior to mark-up. One notable topic is the Bill’s proposed shift from the broadest reasonable interpretation (BRI) at the USPTO’s Patent Trial & Appeal Board (PTAB) to a district court style claim construction. The initial draft of the Goodlatte Bill referenced the entirety of 35 U.S.C. § 282, and along with it, a presumption that patent claims are valid (§ 282 (a)). This would have been an absolute boon to patent trolls. Fortunately, and as I predicted, the claim construction proposal no longer requires the application of the presumption of validity.
In the second draft, and now H.R. 3309, the general reference to § 282 has been changed to a contextual reference to § 282(b). In essence, the proposal would change little at the USPTO (plain and ordinary meaning is a component of BRI) other than perhaps an increased emphasis on prosecution history consistent with Philipps v. AWH. That said, the proposal still lacks consistency and leaves a possible opening for patent troll mischief.
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Patent Reform for the Holidays?
Now that Congress has kicked the budgetary can down the road for another 3 months they may actually squeeze in some lawmaking before the end of 2013. Given the public image problems created by the shutdown of the last few weeks, lawmakers will be eager to find an issue to address via legislation; especially an issue with bipartisan support that will not be too hotly debated— You see where this is going.
Given the the entrenched positions on both sides of the immigration debate (a stated priority of the White House), patent reform remains the lowest hanging fruit. For this reason it seems likely that the next act of political theater will be to sell patent reform as key to America’s competitive future. As a reminder, here are the issues to shape the debate in the week’s ahead: Read the rest of this entry »
USPTO Adjusts Examiner Count System to Address Growing RCE Backlog
Some notable pre-grant news this week. A Request for Continued Examination (RCE) is largely a procedural creature of pre-grant, patent application prosecution (patent reissue being the lone exception on the post grant side). Recently, the backlog of RCE filings has increased significantly. This is largely the result of the Office switching the priority of such filings on examiner dockets while reducing examiner credit for processing RCEs. This priority switch was designed to reduce the backlog of unexamined patent applications. Not surprisingly, as the unexamined application inventory went down, RCE inventory went up as illustrated in the above chart.
Starting on October 1st, the USPTO will recalibrate the Count System Initiative (CSI) to incentivize work on the RCE backlog. (Under the previous version of CSI, 1.75 credits were available for the first RCE, and 1.5 for the second and subsequent)
On October 1, 2013 examiners will receive a total of 2.0 counts for the 4th and all subsequent RCEs in which a first office action is done in the first quarter of the fiscal year, and 2.o counts for the 5th and all subsequent RCEs in which a first office action is done in each of the second, third, and fourth quarters of the fiscal year.
Also, examiners with higher RCE inventories will have more limited inventories of regular new applications available for action until their RCE inventories are reduced below predetermined thresholds.
Second Round of Patent Reform Efforts to Hit Congress
As expected, the second Goodlatte discussion draft has been circulated. (here) The second draft appears to include additional technical fixs and refinements, including the necessary CBM fix I mentioned being involved with yesterday. The draft also includes many of the concepts introduced in the first draft circulated this past May. I have not had time to review them all in detail, but will in the coming days at the Midwest IP Institute.
Legislative efforts from Senator Leahy and others are expected to follow shortly.
Planned Silicon Valley Office in Limbo
Seems Congress is currently winning the never ending fee diversion battle with the USPTO. As a result, efforts to expand USPTO satellite office to Dallas, Denver and Silicon Valley have been significantly slowed. While permanenet office locations in Dallas and Denver have been identified, the search for a permanent Silicon Valley office was recently halted as a result of the sequestration of USPTO funds (you know, the ones they collect from the public in self supporting fees).
The Detroit office remains open.
It seems unlikely that the planned satellite office will be anything but ceremonial outposts in the near term. Indeed, absent consistent funding, one or more satellite offices could be shelved indefinitely.
Key CBM Revision Unpopular with Bar Assoc’s
One of the more intriguing mechanisms of the America Invents Act (AIA) is the Transitional Program for Covered Business Method (CBM) Patents. To date, these speciailized post grant patent challenges have been pursued in relatively limited numbers as compared to the more generic Inter Partes Review (IPR) proceedings. The reason for the disparity between CBM and IPR filing rates is quite simple — IPR is available for any technology not just “business method patents.” Yet, the CBM proceding is far superior to IPR in many strategic respects.
Recognizing the potential of CBM filings to have a greater impact on the patent litigation landscape, Congress is actively considering alterations to the existing statutory framework that would encourage greater use of this powerful AIA mechanism. Read the rest of this entry »
Congress & USPTO Prepare for Busy Fall Season
As Congress turns back to patent reform efforts in the Fall there will also be a fair amount of activity at the USPTO. The ”executive actions” released by the White House months ago were aimed primarily at the USPTO. In response, several proposed rule making packages and changes to examination practice are expected in the coming months.
1. The USPTO is expected to issue strict guidelines requiring the identification of the real-party-in-interest for issued patents. Read the rest of this entry »
Congress Winds Down to August Recess
It is highly likely that a new patent reform bill will be passed into law this fall given the intense congressional interest in the topic. Over the past few weeks, there has been an unprecedented flurry in the number of initiatives, executive actions, and bills proposed. Whether this political attention is truly responsive to the outcry of technology innovators being shaken down by “patent trolls” is unclear. Certainly there are some in Washington that simply recognize the existence of bipartisan support for legislation that can be spun during an election season as helping small businesses….needed or not. Whatever the motivation, something will almost certainly be passed into law…..but what?
Rather than go through the details of each proposal being floated, there are concepts common to all. I provide an assessment of the likelihood of each to exit Congress as law in the coming months.
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