Publications: Intellectual Property Update

House Passes Patent Reform Bill

September 2007 By Laurie A. Axford and Brooks Gifford

Congress took an important step toward patent reform on September 7, when the House of Representatives passed its version of the Patent Reform Act of 2007, H.R. 1908. Although some of the changes are significant, the proposed Act would not dramatically alter U.S. patent law. The following is a brief summary of some of the biggest reforms to patent law contained in the House bill: First to File System: The Act would harmonize U.S. law with the rest of the world by ending the current first-to-invent system and replacing it with a first-to-file system. The one year grace period for public disclosures would be retained, but only with respect to disclosures made by or derived from the inventor. In some situations, this will be a drastic change. For example, if two inventors independently invent the same invention, and the later inventor files first, under the proposed Act the later inventor would have priority. This is in contrast to present law where the earlier inventor could establish priority through an interference proceeding. Although this is probably a rare situation, the stakes are high enough that it would be more important than ever to file a patent application as soon as possible to prevent a later inventor from filing first. Accordingly, inventors would be well-served to file a comprehensive provisional application rather than wasting weeks or months preparing a quality non-provisional application. Elimination of Interference Proceedings: Since the first-to-invent system would be eliminated by the Act, interference proceedings would be eliminated as well and replaced by new "derivation proceedings." There are some significant differences between the two types of proceedings. For example, the main issue in an interference proceeding is establishing the first date of invention along with diligence in reducing the invention to practice. In derivation proceedings, while the issue of first inventorship would still be relevant, diligence in reduction to practice would not be as important. Instead, the main issue would be proving that the earlier filer in fact derived the invention from the later filer's work. Damages: Courts would continue to award a "reasonably royalty" in infringement cases, but the method of calculation would change. The Act would require courts to determine the value of the contribution of the invention over the prior art, as opposed to the value of the invention itself. Search Reports: The Act would give the Patent Office the authority to require applicants to submit extensive search reports. If the Patent Office chooses to create such a requirement, the burden on applicants could be dramatically increased - particularly if the search report is at all similar to the current Examination Support Document required for Accelerated Examination. If it becomes apparent that the Patent Office will require search reports, inventors should make a concerted effort to file as many applications as possible before the requirement takes effect.