Recently in PATENT REFORM Category

DAMAGES

The changes proposed to 35 U.S.C. § 284 seem to be done with the intention of increasing the predictability of damages in patent litigation.  35 U.S.C. § 284 currently gives courts significant leeway to determine damages without a codified standard:

The larger patent reform bill has run into a roadblock and now Congress is currently trying to pass smaller scale reform.  One of these smaller scale bills, a bill that would have given the USPTO the ability to set its own fees, was temporarily withdrawn from the house today.  Several notable IP groups, including AIPLA and the IPO, opposed the bill and instead are pressing for funding along with a provision to stop fees collected in the patent office from being diverted to other parts of the government.  AIPLA president Alan J. Kasper, regarding this bill giving the PTO fee setting authority, contended:

"This year's funding represents an example of the problem: the House is considering legislation that would essentially raise the fees paid by users to the USPTO while significant monies will be diverted unless something is done. Given the importance of our intellectual property system as a key economic driver that attracts and protects investment in new technology, our country's innovators who pay the fees deserve no less. Furthermore, AIPLA supports a comprehensive approach to patent reform now working its way through the Congress, and not the piecemeal approach represented by this bill."

However, according to the IPO's website: "Judiciary leaders are understood to now be considering a more comprehensive USPTO funding bill that might include a 15 percent patent fee surcharge, a provision to stop fee diversion, and fee-setting authority."

The larger patent reform bill also has a similar provision allowing the PTO to set its own fees:

SEC. 9. FEE SETTING AUTHORITY.

(a) FEE SETTING.--

(1) IN GENERAL.--The Director shall have authority to set or adjust by rule any fee established or charged by the Office under sections 41 and 376 of title 35, United States Code, or under section 31 of the Trademark Act of 1946 (15 U.S.C. 1113), or any other fee established or charged by the Office under any other provision of law, notwithstanding the fee amounts established or charged thereunder, for the filing or processing of any submission to, and for all other services performed by or materials furnished by, the Office, provided that patent and trademark fee amounts are in the aggregate set to recover the estimated cost to the Office for processing, activities, services and materials relating to patents and trademarks, respectively, including proportionate shares of the administrative costs of the Office.

We will continue to monitor any changes in proposed patent law reform as they develop.

False Marking:

The proposed changes to the false marking statute would have the effect of limiting the potential plaintiffs to only those who have suffered a "competitive injury" as a result of the false marking: 

(k) FALSE MARKING.--

(1) IN GENERAL.--Subsection (b) of section

292 of title 35, United States Code, is amended to read as follows:

''(b) A person who has suffered a competitive injury as a result of a violation of this section may file a civil action in a district court of the United States for recovery of damages adequate to compensate for the injury.''

The main purpose of the proposed changes to the false marking statute is to take away the "lottery ticket" effect of allowing anyone to sue, regardless of injury, and receive a windfall.  After the decision in Forest Group, Inc. v. Bon Tool Company, in which the court ruled that the penalty for false marking was to be applied per item sold, an explosion in qui tam suits ensued.  This reform legislation is intended to cut off plaintiffs who have suffered no real injury and are merely looking for a windfall.

However, "competitive injury" may be difficult to demonstrate for a small entity; most small entities likely do not have the resources to invest heavily into exploring possible new products and, as a result, demonstrating to a court that they somehow lost out on an opportunity due to false marking would be challenging.  Consequently, the proposed legislation could favor larger corporations.

More extensive coverage of the rise in qui tam false marking suits can be found at http://www.patentlawyers.net/Patent-Law/Patent-Marking.aspx .

This is the first entry in a series of entries analyzing the impact the proposed Patent Reform Act of 2010:

First-To-File:

Perhaps the most major change that the proposed patent reform legislation contains is the change away from a first-to-invent system and in the direction of a first-to-file system.  Below is an excerpt from the proposed changes to 35 U.S.C. § 102:

''§ 102. Conditions for patentability; novelty

''(a) NOVELTY; PRIOR ART.--A person shall be entitled to a patent unless--

''(1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention; 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."

Essentially, the new 35 U.S.C. § 102 would use the "effective filing date" as the date which the prior art is balanced against.  Effective filing date is only defined in the proposed changes to 35 U.S.C. § 100 by either the filing date of the application or by a claim of priority:

''(i)(1) The term 'effective filing date' of a claimed

invention in a patent or application for patent means--

''(A) if subparagraph (B) does not apply, the

actual filing date of the patent or the application for

the patent containing a claim to the invention; or

''(B) the filing date of the earliest application

for which the patent or application is entitled, as to

such invention, to a right of priority under section

119, 365(a), or 365(b) or to the benefit of an earlier

filing date under section 120, 121, or 365(c).

Disclosures made 1 year or less from the effective filing date will be an exception that will not count as prior art, but only if the inventor or joint-inventor was the first to disclose.

(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.