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.

The America Invents Act (AIA) has been a phenomenal success in decreasing patent troll effectiveness, in many cases completely shutting down such abusive litigation practices. Below is a chart (IPR in blue, CBM in red) showing the influx of 600+ patent challenges filed with the USPTO to date, the vast majority of which target patent trolls. Congress would be wise to ensure that the currently proposed post grant tweaks do not disturb the significant traction of the new AIA proceedings.(Click to Enlarge)

IPRSpecifically, the H.R. 3309 proposes the following for PTAB claim construction practices for IPR and PGR (excluding CBM)

(A)  each claim of a patent shall be construed as such claim would be in a civil action to invalidate a patent under section 282(b), including construing each claim of the patent in accordance with the ordinary and customary meaning of such claim as understood by one of ordinary skill in the art and the prosecution history pertaining to the patent; and

(B) if a court has previously construed the claim or a claim term in a civil action in which the patent owner was a party, the Office shall consider such claim construction.’’

(emphasis added)

As to consistency, the above proposal is for IPR and PGR only. This claim construction shift is not proposed for patent reexamination, or reissue. Presumably this exclusion is not an oversight, but instead, based on the grounds that these proceedings are not contested cases involving “judicial determinations,” but instead, examination proceedings. Yet, this is a distinction without a difference. The judges of the PTAB decide the very same issues of patentability whether introduced to the USPTO as a reexamination, patent reissue or IPR. And, amendment is possible in all of these proceedings, which is currently the justification for the application of a broadest reasonable interpretation (BRI) in all. If the above noted change is to be made, it must be made for all post grant proceedings for consistency sake. It makes little sense for judges of the PTAB to apply different standards based upon the manner in which the post grant issue is presented to the Office.

Finally, the proposal could, depending upon how the USPTO interprets “shall consider,” force the USPTO to honor prior “judicial determinations” such as Markman Orders that are derived in light of the presumption of validity. Certainly, USPTO consideration of court activity makes sense, and is in fact an accurate description of current PTAB practices. On the other hand, forcing the Board to blindly follow prior court claim construction decisions colored by a presumption of validity makes no sense whatsoever. In such a case, the technical insight of USPTO judges on issues of claim construction would be muzzled to the great joy of patent trolls.

With mark-up of H.R. 3309 ahead, it is hoped that the provision is expanded to all post grant proceedings, or none at all. As to the degree of deference to give to prior judicial determinations, perhaps this can be adequately clarified in the legislative history.