By Kevin E. Noonan —
It appears that rising chorus of naysayers against S. 1145 is larger than we thought. After our post on Friday, Patent Docs has been contacted by two other groups who have organized a letter-writing campaign to Senate leaders beseeching them not to pass S. 1145, the so-called "patent reform" legislation.
One of these is a letter sent on October 23rd to Senate Majority Leader Sen. Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY). This letter has more than 430 signatories, including organizations such as the Institute of Electrical and Electronics Engineers (IEEE)-USA; American Seed Trade Association; United States Business & Industry Council; the Biotechnology Industry Organization (BIO); the Financial Services Industry Intellectual Property Law Association; and the Pharmaceutical Research and Manufacturers of America (PhRMA); and companies including Abbott; Allergan, Inc.; Alnylam Pharmaceuticals; American Solar, Inc.; ARYx Therapeutics; Amylin Pharmaceuticals; BASF Corporation; Biogen Idec, Inc.; Bayer Corporation; Beckman Coulter, Inc.; Boston Scientific Corporation; Cargill Incorporated; Caterpillar Inc.; Cephalon, Inc.; Carbide Derivative Technologies; CIMA Nanotech; Coca-Cola Company; Corning Incorporated; DuPont; Eli Lilly and Company; Firefly Energy Inc.; Gen-Probe Incorporated; Genzyme; Human Genome Sciences, Inc.; Johnson & Johnson; Invitrogen Corporation; Maxygen, Inc.; Millennium Pharmaceuticals Inc.; Monsanto Company; Novo Nordisk; Polestar Capital Associates; QUALCOMM Inc.; Rigel Pharmaceuticals; Syngenta Seeds, Inc.; Vical Incorporated; and ZymoGenetics, Inc.
The letter’s message is clear: the bill "contains provisions that will create uncertainty and weaken the enforceability of validly issued patents." Specifically mentioned in this regard are the expanded apportionment of damages provisions, the post-grant opposition (characterized in the letter as "indefinite") (see "Draft Report on Senate Patent Reform Bill: Post-Grant Procedures"), venue restrictions, and the "burdensome and expensive mandatory search requirements." These and other provisions "pose serious negative consequences for continued innovation and American technological leadership in a competitive global economy." The letter also objects to shortcomings in the provisions on inequitable conduct, which merely "codifies the current inequitable conduct doctrine rather than to make broadly supported reforms to eliminate litigation abuse of the doctrine and gain increases in patent quality" (see "Draft Report on Senate Patent Reform Bill: Inequitable Conduct Provisions"). The letter asserts that there is "[n]o compelling case" for passing the bill in its present form, and that the "reform" provisions are the result of "claims of a crisis in the current patent system that does not exist, supported by selective assertions which do not hold up under scrutiny." Although the sentiments of some of the signatories may (or may have) changed depending on what amendments ultimately make it into the bill, the overwhelming message is a negative one: don’t pass this bill!
The second letter (not yet sent), also addressed to Senators Reid and McConnell, has 105 signatories and is just as adamant that S. 1145 as it currently stands should not be passed. This letter cites deficiencies in almost all of the bills provisions, including first-to file, which:
will create a race to file at the USPTO, which will severely handicap smaller entities, due to their limited budgets. Such a system would also not provide adequate time for inventors to develop their concepts, resulting in a much lower quality of filed patent applications. Larger entities would have the advantages of larger budgets and in-house patent counsel, which individual inventors rarely have.
post-grant review, which
will allow literally anyone to challenge a granted patent for one year, and anyone with an economic interest to challenge a patent for its entire life, at a very low cost. Competitors can just keep filing inexpensive challenges until the inventor’s finances are exhausted trying to defend their legitimately granted patent, forcing the inventors to abandon their honestly created inventions. It will create a scenario where the value of patents will be much less certain, which will severely impact the availability of private investment to help develop emerging technologies.
apportionment of damages, which:
will drastically reduce the damages that infringers will have to pay for willful infringement to a small fraction of what it is and has been for decades. Courts will be forced to try to determine what apportionment of damages should be awarded to the plaintiffs, which in many cases will reduce the penalties for infringement dramatically. The courts are ill equipped to determine these factors, in that it will require expert testimony as to how the damages should be apportioned, at great expense to the inventors attempting to defend their patents. Essentially a patent will become much less valuable to the inventor, due to insecurity about what the courts might decide is deemed an appropriate penalty for willful infringement.
mandatory 18-month publication rule, since:
the rest of the world will have more than a year to copy almost all American inventions before a patent has even been granted, again creating uncertainty for private investments in new technologies. The publication of the patent application on the Internet long before the patent has been granted will allow nearly anyone to be able to design around the invention, and then file their own applications that anticipates all of the inventors claims, effectively destroying much of the value of the inventor’s patent, once it is finally allowed by the USPTO.
and the applicant "quality" submission requirement, which:
would significantly increase the cost of obtaining a patent, which will cause many independent inventors to abandon valuable inventions. The process of adequately developing and attempting to acquire a patent for an invention is already expensive of both time and money, as patent professionals are required to be able to determine what claims the applicant may be able to obtain with a patent. The AQS mandate would require the inventor and their patent attorney to attempt to play the role that has traditionally been the duty of the examiners, at great expense to the inventor. It would also cause a conflict of interest for the patent attorney, who is being required to provide a professional opinion that may be contrary to their client’s best interests.
The letter asserts that the proposed changes are "being driven by the interests of a few large transnational corporations" and "will erode much of the value of U.S. Patents, especially for independent inventors and small businesses, which currently create about 40% of the new inventions, and consequently many new jobs in America." The Senate patent reform bill as written "will do serious and long term damage to the future of American innovative efforts, and will detract from the ability of the U.S. Economy to continue to prosper in a rapidly evolving global marketplace" by destroying the incentive for independent inventors and small businesses to disclose their inventions (the much-overlooked benefit of the patent system).
As with the U.S. Patent and Trademark Office’s misguided (and preliminarily enjoined) "new rules" concerning continuation and claims practice, S. 1145 seems to be a case of the federal government ignoring the concerns of its citizens. This may be understandable for the Patent Office, since no one elected them and the officials in the executive branch who were elected have a track record of doing what they think is right without regard to consensus building or considering the views of their constituents when so informed (vocally, if not vociferously, in the case of the "new rules"). But Senators are elected, and the signatories of at least one of these letters come from every state. Perhaps the time is past for merely writing your Congressman. Maybe the time has come to inform them, as citizens, organizations, and businesses, that the consequences of passing this bill will be that we will actively work for their defeat in the next election, and mean it. This may be the only message that they can understand, since they don’t seem to be listening no matter how many letters we send them.
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