Recently in PATENT REFORM Category

(i) whether the Claims and Continuation Final Rules fall within the scope of the USPTO's rulemaking authority and

(ii) whether the Final Rules are contrary to the Patent Act. The Court concluded that the Final Rules were all within the agency's rulemaking authority.

The Deputy Director of the USPTO met with representatives from U.S. automakers on May 6, 2008 as part of a tour to seek input from various parties regarding design patent protection for automobile components.

 Currently, components of automotive vehicles, such as headlights, mirrors, and body panels may be protected by design patents. Manufacturers of spare parts and body shops using such parts to repair vehicles may be liable for patent infringement.

 Legislation introduced in the House of Representatives on March 13, 2008 would amend 35 USC 271 by adding an exception from infringement for component parts of an article of manufacture that would solely be used to repair the article of manufacture so as to restore its original appearance. Proponents of the legislation, including independent parts manufacturers and insurance companies, argue that eliminating design patent protection of spare parts best serves the public interest by lowering costs associated with repair of damaged vehicles.

The CAFC has requested oral arguments from two amici for its hearing of Ex parte Bilski: Regulatory Datacorp and the Financial Services Industry group.

 The RDC argues for a broad interpretation of patentable subject matter, interpreting the term "process" in 35 USC §101 to encompass any art, method, or process, that falls outside of the prohibited subject matter of abstract ideas, physical phenomena or laws of nature. FSI, on the other hand, interprets "process" narrowly, with a process being patentable subject matter only in cases where it results in a physical transformation, or is tied to a machine in a non-conventional manner. A "token" mention of a machine would not, therefore, render a mental process patentable.

The CAFC will hear Bilski en banc at 2:00 PM on May 8, 2008.

The District Court for the Eastern District of Virginia recently granted summary judgment to Tafas and GlaxoSmithKline, finding that the USPTO's proposed Final Rules were an improper extension of the Office's authority.

 According to the Court, the authority granted to the Patent Office under 35 U.S.C. §2 is limited to rules governing "conduct of proceedings" before the Office, and does not extend to the issuance of substantive rules, which the Court defined as "any rule that affects individual rights and obligations." The Court then found that the proposed Rules, including those limiting claims and continuations were substantive, as they "alter existing law and limit the rights of applicants…under the Patent Act."

 The Court held: Because the USPTO’s rulemaking authority under 35 U.S.C. § 2(b)(2) does not extend to substantive rules, and because the Final Rules are substantive in nature, the Court finds that the Final Rules are void as “otherwise not in accordance with law” and “in excess of statutory jurisdiction [and] authority.” 5 U.S.C. § 706(2).

 The USPTO is planning to appeal the ruling to the CAFC.

The summary judgment hearing in Tafas v. Dudas took place on February 8, 2008. During the two-hour-long oral arguments, the parties argued that the validity of the new USPTO rules may depend on whether the rules are substantive or procedural. As case law has held that the USPTO has no substantive rulemaking authority, a finding that the new rules are substantive would render them beyond the scope of the PTO's power and therefore void. The rules are substantive, GSK argued, as they change the law and affect existing rights.

The U.S. attorney argued that the core issue is not whether the rules are substantive or procedural but rather whether Congress delegated authority to the PTO to issue the rules; 35 U.S.C. § 2(b)(2)(A) states that the director may issue rules which govern the conduct of proceedings in the PTO. The new rules, according to the U.S. attorney, fall into this category.

The judge presiding over the hearing took the case under advisement, stating that he needed more time to make a decision.

The Patent Reform Act of 2007 has been unanimously passed by the House Judiciary Commitee and is now well on its way to a full House vote. 

More on the matter can be found at Philip Brooks' Patent Infringement Update. 

Here is the how the House of Representative's version of the Patent Reform Act of 2007 currently looks like:

H.R.1908
Patent Reform Act of 2007 (Introduced in House)

HR 1908 IH

110th CONGRESS

1st Session

H. R. 1908

To amend title 35, United States Code, to provide for patent reform.

IN THE HOUSE OF REPRESENTATIVES

April 18, 2007

Mr. BERMAN (for himself, Mr. SMITH of Texas, Mr. CONYERS, Mr. COBLE, Mr. BOUCHER, Mr. GOODLATTE, Ms. ZOE LOFGREN of California, Mr. ISSA, Mr. SCHIFF, Mr. CANNON, and Ms. JACKSON-LEE of Texas) introduced the following bill; which was referred to the Committee on the Judiciary

A BILL

To amend title 35, United States Code, to provide for patent reform.

      Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

      (a) Short Title- This Act may be cited as the `Patent Reform Act of 2007'.

      (b) Table of Contents- The table of contents of this Act is as follows:

            Sec. 1. Short title; table of contents.

            Sec. 2. Reference to title 35, United States Code.

            Sec. 3. Right of the first inventor to file.

            Sec. 4. Inventor's oath or declaration.

            Sec. 5. Right of the inventor to obtain damages.

            Sec. 6. Post-grant procedures and other quality enhancements.

            Sec. 7. Definitions; patent trial and appeal board.

            Sec. 8. Study and report on reexamination proceedings.

            Sec. 9. Submissions by third parties and other quality enhancements.

            Sec. 10. Venue and jurisdiction.

            Sec. 11. Regulatory authority.

            Sec. 12. Technical amendments.

            Sec. 13. Effective date; rule of construction.

SEC. 2. REFERENCE TO TITLE 35, UNITED STATES CODE.

      Whenever in this Act a section or other provision is amended or repealed, that amendment or repeal shall be considered to be made to that section or other provision of title 35, United States Code.

SEC. 3. RIGHT OF THE FIRST INVENTOR TO FILE.

      (a) Definitions- Section 100 is amended by adding at the end the following:

      `(f) The term `inventor' means the individual or, if a joint invention, the individuals collectively who invented or discovered the subject matter of the invention.

      `(g) The terms `joint inventor' and `coinventor' mean any 1 of the individuals who invented or discovered the subject matter of a joint invention.

      `(h) The `effective filing date of a claimed invention' is--

            `(1) the filing date of the patent or the application for patent containing the claim to the invention; or

            `(2) if the patent or application for patent is entitled to a right of priority of any other application under section 119, 365(a), or 365(b) or to the benefit of an earlier filing date in the United States under section 120, 121, or 365(c), the filing date of the earliest such application in which the claimed invention is disclosed in the manner provided by the first paragraph of section 112.

      `(i) The term `claimed invention' means the subject matter defined by a claim in a patent or an application for a patent.

      `(j) The term `joint invention' means an invention resulting from the collaboration of inventive endeavors of 2 or more persons working toward the same end and producing an invention by their collective efforts.'.

      (b) Conditions for Patentability-

            (1) IN GENERAL- Section 102 is amended to read as follows:

`Sec. 102. Conditions for patentability; novelty

      `(a) Novelty; Prior Art- A patent for a claimed invention may not be obtained if--

            `(1) the claimed invention was patented, described in a printed publication, or in public use or on sale--

                  `(A) more than one year before the effective filing date of the claimed invention; or

                  `(B) one year or less before the effective filing date of the claimed invention, other than through disclosures made by the inventor or a joint inventor or by others who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or

            `(2) the claimed invention was described in a patent issued under section 151, or in an application for patent published or deemed published under section 122(b), in which the patent or application, as the case may be, names another inventor and was effectively filed before the effective filing date of the claimed invention.

      `(b) Exceptions-

            `(1) PRIOR INVENTOR DISCLOSURE EXCEPTION- Subject matter that would otherwise qualify as prior art under subparagraph (B) of subsection (a)(1) shall not be prior art to a claimed invention under that subparagraph if the subject matter had, before the applicable date under such subparagraph (B), been publicly disclosed by the inventor or a joint inventor or others who obtained the subject matter disclosed directly or indirectly from the inventor, joint inventor, or applicant.

            `(2) DERIVATION AND COMMON ASSIGNMENT EXCEPTIONS- Subject matter that would otherwise qualify as prior art only under subsection (a)(2), after taking into account the exception under paragraph (1), shall not be prior art to a claimed invention if--

                  `(A) the subject matter was obtained directly or indirectly from the inventor or a joint inventor; or

                  `(B) the subject matter and the claimed invention, not later than the effective filing date of the claimed invention, were owned by the same person or subject to an obligation of assignment to the same person.

            `(3) JOINT RESEARCH AGREEMENT EXCEPTION-

                  `(A) IN GENERAL- Subject matter and a claimed invention shall be deemed to have been owned by the same person or subject to an obligation of assignment to the same person in applying the provisions of paragraph (2) if--

                        `(i) the claimed invention was made by or on behalf of parties to a joint research agreement that was in effect on or before the effective filing date of the claimed invention;

                        `(ii) the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and

                        `(iii) the application for patent for the claimed invention discloses or is amended to disclose the names of the parties to the joint research agreement.

                  `(B) For purposes of subparagraph (A), the term `joint research agreement' means a written contract, grant, or cooperative agreement entered into by two or more persons or entities for the performance of experimental, developmental, or research work in the field of the claimed invention.

            `(4) PATENTS AND PUBLISHED APPLICATIONS EFFECTIVELY FILED- A patent or application for patent is effectively filed under subsection (a)(2) with respect to any subject matter described in the patent or application--

                  `(A) as of the filing date of the patent or the application for patent; or

                  `(B) if the patent or application for patent is entitled to claim a right of priority under section 119, 365(a), or 365(b) or to claim the benefit of an earlier filing date under section 120, 121, or 365(c), based upon one or more prior filed applications for patent, as of the filing date of the earliest such application that describes the subject matter.'.

            (2) CONFORMING AMENDMENT- The item relating to section 102 in the table of sections for chapter 10 is amended to read as follows:

            `102. Conditions for patentability; novelty.'.

      (c) Conditions for Patentability; Non-Obvious Subject Matter- Section 103 is amended to read as follows:

`Sec. 103. Conditions for patentability; nonobvious subject matter

      `A patent for a claimed invention may not be obtained though the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.'.

      (d) Repeal of Requirements for Inventions Made Abroad- Section 104, and the item relating to that section in the table of sections for chapter 10, are repealed.

      (e) Repeal of Statutory Invention Registration-

            (1) IN GENERAL- Section 157, and the item relating to that section in the table of sections for chapter 14, are repealed.

            (2) REMOVAL OF CROSS REFERENCES- Section 111(b)(8) is amended by striking `sections 115, 131, 135, and 157' and inserting `sections 131 and 135'.

      (f) Earlier Filing Date for Inventor and Joint Inventor- Section 120 is amended by striking `which is filed by an inventor or inventors named' and inserting `which names an inventor or joint inventor'.

      (g) Conforming Amendments-

            (1) RIGHT OF PRIORITY- Section 172 is amended by striking `and the time specified in section 102(d)'.

            (2) LIMITATION ON REMEDIES- Section 287(c)(4) is amended by striking `the earliest effective filing date of which is prior to' and inserting `which has an effective filing date before'.

            (3) INTERNATIONAL APPLICATION DESIGNATING THE UNITED STATES: EFFECT- Section 363 is amended by striking `except as otherwise provided in section 102(e) of this title'.

            (4) PUBLICATION OF INTERNATIONAL APPLICATION: EFFECT- Section 374 is amended by striking `sections 102(e) and 154(d)' and inserting `section 154(d)'.

            (5) PATENT ISSUED ON INTERNATIONAL APPLICATION: EFFECT- The second sentence of section 375(a) is amended by striking `Subject to section 102(e) of this title, such' and inserting `Such'.

            (6) LIMIT ON RIGHT OF PRIORITY- Section 119(a) is amended by striking `; but no patent shall be granted' and all that follows through `one year prior to such filing'.

            (7) INVENTIONS MADE WITH FEDERAL ASSISTANCE- Section 202(c) is amended--

                  (A) in paragraph (2)--

                        (i) by striking `publication, on sale, or public use,' and all that follows through `obtained in the United States' and inserting `the 1-year period referred to in section 102(a) would end before the end of that 2-year period'; and

                        (ii) by striking `the statutory' and inserting `that 1-year'; and

                  (B) in paragraph (3), by striking `any statutory bar date that may occur under this title due to publication, on sale, or public use' and inserting `the expiration of the 1-year period referred to in section 102(a)'.

      (h) Repeal of Interfering Patent Remedies- Section 291, and the item relating to that section in the table of sections for chapter 29, are repealed.

      (i) Action for Claim to Patent on Derived Invention- Section 135(a) is amended to read as follows:

      `(a) Dispute Over Right to Patent-

            `(1) INSTITUTION OF DERIVATION PROCEEDING- An applicant may request initiation of a derivation proceeding to determine the right of the applicant to a patent by filing a request which sets forth with particularity the basis for finding that an earlier applicant derived the claimed invention from the applicant requesting the proceeding and, without authorization, filed an application claiming such invention. Any such request may only be made within 12 months after the date of first publication of an application containing a claim that is the same or is substantially the same as the claimed invention, must be made under oath, and must be supported by substantial evidence. Whenever the Director determines that patents or applications for patent naming different individuals as the inventor interfere with one another because of a dispute over the right to patent under section 101, the Director shall institute a derivation proceeding for the purpose of determining which applicant is entitled to a patent.

            `(2) REQUIREMENTS- A proceeding under this subsection may not be commenced unless the party requesting the proceeding has filed an application that was filed not later than 18 months after the effective filing date of the application or patent deemed to interfere with the subsequent application or patent.

            `(3) DETERMINATION BY PATENT TRIAL AND APPEAL BOARD- In any proceeding under this subsection, the Patent Trial and Appeal Board--

                  `(A) shall determine the question of the right to patent;

                  `(B) in appropriate circumstances, may correct the naming of the inventor in any application or patent at issue; and

                  `(C) shall issue a final decision on the right to patent.

            `(4) DERIVATION PROCEEDING- The Board may defer action on a request to initiate a derivation proceeding until 3 months after the date on which the Director issues a patent to the applicant that filed the earlier application.

            `(5) EFFECT OF FINAL DECISION- The final decision of the Patent Trial and Appeal Board, if adverse to the claim of an applicant, shall constitute the final refusal by the Patent and Trademark Office on the claims involved. The Director may issue a patent to an applicant who is determined by the Patent Trial and Appeal Board to have the right to patent. The final decision of the Board, if adverse to a patentee, shall, if no appeal or other review of the decision has been or can be taken or had, constitute cancellation of the claims involved in the patent, and notice of such cancellation shall be endorsed on copies of the patent distributed after such cancellation by the Patent and Trademark Office.'.

      (j) Elimination of References to Interferences- (1) Sections 6, 41, 134, 141, 145, 146, 154, 305, and 314 are each amended by striking `Board of Patent Appeals and Interferences' each place it appears and inserting `Patent Trial and Appeal Board'.

      (2) Sections 141, 146, and 154 are each amended--

            (A) by striking `an interference' each place it appears and inserting `a derivation proceeding'; and

            (B) by striking `interference' each additional place it appears and inserting `derivation proceeding'.

      (3) The section heading for section 134 is amended to read as follows:

`Sec. 134. Appeal to the Patent Trial and Appeal Board'.

      (4) The section heading for section 135 is amended to read as follows:

`Sec. 135. Derivation proceedings'.

      (5) The section heading for section 146 is amended to read as follows:

`Sec. 146. Civil action in case of derivation proceeding'.

      (6) Section 154(b)(1)(C) is amended by striking `INTERFERENCES' and inserting `DERIVATION PROCEEDINGS'.

      (7) The item relating to section 6 in the table of sections for chapter 1 is amended to read as follows:

            `6. Patent Trial and Appeal Board.'.

      (8) The items relating to sections 134 and 135 in the table of sections for chapter 12 are amended to read as follows:

            `134. Appeal to the Patent Trial and Appeal Board.

            `135. Derivation proceedings.'.

      (9) The item relating to section 146 in the table of sections for chapter 13 is amended to read as follows:

            `146. Civil action in case of derivation proceeding.'.

      (10) Certain Appeals- Subsection 1295(a)(4)(A) of title 28, United States Code, is amended to read as follows:

                  `(A) the Patent Trial and Appeal Board of the United States Patent and Trademark Office with respect to patent applications, derivation proceedings, and post-grant review proceedings, at the instance of an applicant for a patent or any party to a patent interference (commenced before the effective date of the Patent Reform Act of 2007), derivation proceeding, or post-grant review proceeding, and any such appeal shall waive any right of such applicant or party to proceed under section 145 or 146 of title 35;'.

SEC. 4. INVENTOR'S OATH OR DECLARATION.

      (a) Inventor's Oath or Declaration-

            (1) IN GENERAL- Section 115 is amended to read as follows:

`Sec. 115. Inventor's oath or declaration

      `(a) Naming the Inventor; Inventor's Oath or Declaration- An application for patent that is filed under section 111(a), that commences the national stage under section 363, or that is filed by an inventor for an invention for which an application has previously been filed under this title by that inventor shall include, or be amended to include, the name of the inventor of any claimed invention in the application. Except as otherwise provided in this section, an individual who is the inventor or a joint inventor of a claimed invention in an application for patent shall execute an oath or declaration in connection with the application.

      `(b) Required Statements- An oath or declaration under subsection (a) shall contain statements that--

            `(1) the application was made or was authorized to be made by the affiant or declarant; and

            `(2) such individual believes himself or herself to be the original inventor or an original joint inventor of a claimed invention in the application.

      `(c) Additional Requirements- The Director may specify additional information relating to the inventor and the invention that is required to be included in an oath or declaration under subsection (a).

      `(d) Substitute Statement-

            `(1) IN GENERAL- In lieu of executing an oath or declaration under subsection (a), the applicant for patent may provide a substitute statement under the circumstances described in paragraph (2) and such additional circumstances that the Director may specify by regulation.

            `(2) PERMITTED CIRCUMSTANCES- A substitute statement under paragraph (1) is permitted with respect to any individual who--

                  `(A) is unable to file the oath or declaration under subsection (a) because the individual--

                        `(i) is deceased;

                        `(ii) is under legal incapacity; or

                        `(iii) cannot be found or reached after diligent effort; or

                  `(B) is under an obligation to assign the invention but has refused to make the oath or declaration required under subsection (a).

            `(3) CONTENTS- A substitute statement under this subsection shall--

                  `(A) identify the individual with respect to whom the statement applies;

                  `(B) set forth the circumstances representing the permitted basis for the filing of the substitute statement in lieu of the oath or declaration under subsection (a); and

                  `(C) contain any additional information, including any showing, required by the Director.

      `(e) Making Required Statements in Assignment of Record- An individual who is under an obligation of assignment of an application for patent may include the required statements under subsections (b) and (c) in the assignment executed by the individual, in lieu of filing such statements separately.

      `(f) Time for Filing- A notice of allowance under section 151 may be provided to an applicant for patent only if the applicant for patent has filed each required oath or declaration under subsection (a) or has filed a substitute statement under subsection (d) or recorded an assignment meeting the requirements of subsection (e).

      `(g) Earlier-Filed Application Containing Required Statements or Substitute Statement- The requirements under this section shall not apply to an individual with respect to an application for patent in which the individual is named as the inventor or a joint inventor and that claims the benefit under section 120 or 365(c) of the filing of an earlier-filed application, if--

            `(1) an oath or declaration meeting the requirements of subsection (a) was executed by the individual and was filed in connection with the earlier-filed application;

            `(2) a substitute statement meeting the requirements of subsection (d) was filed in the earlier filed application with respect to the individual; or

            `(3) an assignment meeting the requirements of subsection (e) was executed with respect to the earlier-filed application by the individual and was recorded in connection with the earlier-filed application.

      `(h) Supplemental and Corrected Statements; Filing Additional Statements-

            `(1) IN GENERAL- Any person making a statement required under this section may withdraw, replace, or otherwise correct the statement at any time.

This version of the Patent Reform Act of 2007 was found at http://thomas.loc.gov/cgi-bin/query/F?c110:1:./temp/~c1105n55Hs:e0::