Competing Bills Target Patent Troll Business Model
Congress has gotten the patent troll memo in a big way.
The political stage is being set for a summer of legislative festivities. Like
any good summer festival, Congress is separately establishing main and side
stage legislative spectacles. The side stage spectacles, the more alternative
acts, such as the Shield
Abuse Reduction Act of 2013; and the Patent
Quality Improvement Act will occupy many until the main stage effort takes
shape. Last Friday the main stage act was announced.
House Judiciary Committee Chair Bob Goodlatte (R-VA), a
key participant in the legislative effort behind the America Invents Act (AIA)
released a draft bill that seeks to sweep in many of the concepts of the
competing bills, while introducing fixes to the AIA. (here).
The bill puts a new spin on the competing legislative proposals that address
discovery controls, loser pay mechanisms, and the revision to notice pleading
(brief overview here).
Certainly these "troll" specific proposals will get the bulk of the attention
from Congress and the public. As to the proposed "improvements and technical
fixes" to the AIA, the draft post grant proposals are a mixed bag.
First, the "technical fix" aspect of the AIA changes
relates to post grant estoppel. The House Bill seeks to address what many have
argued was a technical defect in the AIA, namely, the failure to omit the
"reasonably could have raised" estoppel component of 325(e)(2). This "technical
fix" did not make it into the first
technical amendment as there are many
opposed to such a legislative change. Still, this change has long been
discussed as necessary to make Post Grant Review (PGR) more attractive to
The second change would make Patent Trial & Appeal
Board (PTAB) proceedings unattractive to patent challengers. The proposed
change seeks to mandate district court claim construction practices on the
''(14) providing that for all purposes under this
chapter, each claim of a patent shall be construed as such claim has been or
would be in a civil action to invalidate a patent under section 282, 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, the prosecution history pertaining to the patent, and prior judicial
determinations and stipulations relating to the patent.''
Consistent with 35 U.S.C. § 282(a), the above provision
would require the PTAB to apply a presumption of validity in construing patent
claims. Also, the proposal could force the USPTO to honor prior "judicial
determinations" such as Markman Orders.
Courts construe patent claims with a presumption of
validity. On the other hand, PTAB proceedings assess patentability, not
validity. There is no presumption of patentability at the PTAB. Instead,
amendments and expansion of the intrinsic record are permitted. (long the justification
for applying the broadest reasonable claim construction rubric).
This proposed "improvement," if enacted into law, will
purpose and efficacy of the PTAB patentability proceedings as an
alternative to high cost patent litigation. Strange that such a proposal
would be added to a bill seeking to thwart abusive litigation practices.
Undermining a favorable, low cost venue for patent challengers seems more than
a bit misplaced.
Other changes to PTAB practice include the adoption of
the definition of "business method" as provided in SAP America, Inc. v.
Versata Dev. Group, Inc., CBM2012-00001, Paper 36 (January 9, 2013). This
would effectively moot the
current law suit on point. Also, the declaratory
judgment aspects of 35 U.S.C. §§ 315/325 may be excused for petitioners
stepping in for their customers in some instances.
Clearly, this bill is just a jumping off point and there
are sure to be many, many amendments and modifications to come.
View more from Patents Post-Grant.
For more information about LexisNexis
products and solutions connect with us through our corporate site.