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Inventor Update

Jill Gilbert Welytok is the managing attorney for Absolute Technology Law Group LLC, which is a team of Registered Patent, Trademark and Transactional attorneys.

Pending Patent Legislation: What Will it Mean to an Inventor?

Next Inventors and Entrepreneurs Club Meetings:
 Mequon:  Sept 16  5:45
Metro Milwaukee Club – 135 W. Wells 5:30 pm September 23

 Pending Patent Legislation:  What Will it Mean to an Inventor?

If you are an individual inventor or are involved with  a business which relies on patent protection,  you probably struggle to make sense of the patent system as it is. The prospect of new legislation affecting rights that are difficult to understand in the first place can make any inventor feel like a speculator.


Patent Reform Act of 2007 passed the House in September 2007; placed on Senate calendar in January 2008.


Here is a quick summary of the major provisions of the Patent Reform Act of 2007, which we’ll be following closely in the I&E clubs this fall.

Damages You Can Receive for Infringement

What can an inventor recover from and infringement action? 
1)  Damages are calculated based on a reasonable royalty for the use of the invention determined by envisioning the result of a hypothetical license negotiation at the time infringement began.  2)  Damages may be awarded for infringement occurring within 6 years of the filing of the complaint or counterclaim for infringement.


How would this legislation change the process?  1) Reasonable royalty limited not to the invention, but to the inventive portion of the invention.  This will significantly limit the damages that may be awarded for patent infringement.  2)  Prohibits damages for infringement committed more than two years before the filing of the complaint or counterclaim for infringement, except on proof that the infringer was notified of the infringement by the patentee.

Presumption of the Validity of Your Patent

What is the law now now? 
Post-grant review of the patentability of patent claims takes place in a limited number of circumstances.  The public may not challenge the validity unless and until a lawsuit is threatened.

How would the proposed  legislation change the process? 
The public would be able to petition the USPTO to cancel one or more claims in a patent within one year of its issue date.


A  New “Open Examination” Process

What is done now? 
When determining whether a patent should be awarded, relevant prior art consists of that disclosed by the patentee and that found by the examiner.


How would this legislation change the process?  Anyone may submit prior art for any patent or pending application with an explanation of why the art is important.


New Requirements for Searches Prior to Filing


What are the search requirements now?  Patent applicants do not need to submit a search report and analysis relevant to patentability.

How would this legislation change the process? 
Patent applicants must submit a search report and analysis relevant to patentability and any other information relevant to patentability, which may be deemed necessary.  Exempt from these requirements are applications submitted by a small entity not named in five or more previous applications, not having a gross income over a specified level, and meeting other requirements, i.e., a micro-entity.

Who wins and who loses? 
Entities which are not exempt from the proposed changes are burdened with the added time and cost necessary to compile the search reports.  On the other hand, the search reports may decrease the time it takes to issue a patent by aiding the examiners.

Provision:  Venue for patent litigation

What is done now? 
Currently, patent infringement suits may be brought in any district where the defendant is subject to personal jurisdiction.  Generally, this means that a patent suit may be brought wherever the product accused of infringement is sold.


How would this legislation change the process?  Patent infringement suit may be brought 1) where the defendant has it principal place of business or is incorporated; 2) where the defendant has committed substantial acts of infringement and has a regular and established facility that constitutes a substantial portion of its operations; and 3) under limited circumstances, where the plaintiff resides.


Who wins and who loses?  Restricting venue to congested jurisdictions may increase the time for a patent case to be resolved on the merits, resulting in increased litigations costs.


Provision:  Interlocutory appeal


What is done now?  The Federal Circuit will not consider interlocutory appeals regarding patent claim construction. 


How would this legislation change the process?  A party would be permitted to appeal a district court’s claim construction order before a determination on infringement has occurred and prior to a final judgment on the merits.


Who wins and who loses?  Claim construction is often a key issue in a patent case.  Allowing an immediate appeal of a district court’s claim construction order may reduce litigation costs by avoiding trial based on construction of patent claims that may change on appeal.  On the other hand, this will likely increase the number of appeals, which may cause a delay.  Because the trial court proceedings must be stayed during the appeal, this delay may prejudice the patent holder.

Rules Regarding “Inequitable Conduct”

What is done now? 
Any intentional omission or misrepresentation in any part of patent application will void the entire patent, even when the information in question would not have affected the outcome of the original application.  

How would this legislation change the process? 
A party requesting that a patent be canceled or held unenforceable due to inequitable conduct must prove independently by clear and convincing evidence that material information was misrepresented or omitted from the patent application.

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