By Kevin E. Noonan —

The Senate passed S. 23 last week, which will make several significant changes in U.S. patent law if its provisions survive deliberations in the House (which is preparing its own bill).  One of the most fundamental of these is the change from the current "first-to-invent" to a "first-inventor-to-file" system.  In order to implement the changes, the Senate bill revises (and in some cases completely eliminates) portions of current law.

The provisions of the bill relating to "First-Inventor-to-File" are set forth in Section 2.  Section 2(a) amends definitions relating to inventorship in 35 U.S.C. § 100.  The "inventor" is defined in new § 100(f) as "the individual, or if a joint invention, the individuals collectively who invented or discovered the subject matter of the invention."  A "joint inventor" is defined as "any 1 of the individuals who invented or discovered the subject matter of the joint invention" (§ 100(g)).  This section also defines a "joint research agreement" along current lines (§ 100(h)).  Importantly for the "first-inventor-to-file" regime, Section 2(a) defines the "effective filing date" either as the actual filing date of the invention (§ 100(i)(1)(A)) or "the filing date of the earliest application for which the patent or application is entitled" under §§ 119, 365(a), 365(b), 120, 121 or 365(c) (§ 100(i)(1)(B)).  Finally, this section defines "the claimed invention" as "the subject matter defined by a claim in a patent or application" (§ 100(j)).

Section 2(b) effects the changes in 35 U.S.C. § 102 that changes U.S. patent law from "first-to-invent" to "first-inventor-to-file."  Instead of subsections § 102(a) through § 102(g), new § 102 provides that:

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.

These provisions eliminate the distinction for public use, on sale or "otherwise available to the public" between acts occurring in the U.S. ("in this country") and acts occurring abroad ("in this or a foreign country") that have long been a feature of defining prior art under § 102; this effect is made explicit under Section 2(d), which repeals 35 U.S.C. § 104.  New § 102(a)(2) expressly defines the "first-inventor-to-file" aspects of the change, by defining as prior art an earlier-filed patent or application that "names another inventor"; it is likely that this provision will include (or be interpreted to include) a definition of "another inventor" as another "inventive entity," i.e., any difference in named joint inventors.

The grace period that remains under S. 23 is contained in new § 102(b), which provides exceptions that include:

(1)  DISCLOSURES MADE 1 YEAR OR LESS BEFORE THE EFFECTIVE FILING DATE OF THE CLAIMED INVENTION- A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if–

(A)  the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or

(B)  the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.

(2)  DISCLOSURES APPEARING IN APPLICATIONS AND PATENTS- A disclosure shall not be prior art to a claimed invention under subsection (a)(2) if–

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

(B)  the subject matter disclosed had, before such subject matter was effectively filed under subsection (a)(2), been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or

(C)  the subject matter disclosed 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.

New § 102(b)(1)(A) establishes the one-year grace period for the inventor's own disclosure or disclosure by another who derived the invention ("obtained directly or indirectly") from the "true" inventor.  New § 102(b)(1)(B), on the other hand, relates to a "second" disclosure of the subject matter that had previously been disclosed ("before such disclosure [had] been publicly disclosed") by the inventor or "another" who derived ("directly or indirectly") the invention from the inventor, also presumably less than one year prior to the effective filing date.

New § 102(b)(2) disqualifies as prior art disclosure in a patent or patent application by another who "obtained [the subject matter] directly or indirectly from the inventor" (§ 102(b)(2)(A)) or wherein the subject matter had been publicly disclosed by the inventor or another who derived the invention from the inventor prior to the effective filing date of the earlier patent or application (§ 102(b)(2)(B)) or there was joint ownership ("not later than the effective filing date of the claimed invention") of the earlier disclosed subject matter and the claimed invention.  These provisions provide an incentive for early disclosure of inventions within the one-year grace period, because the effect of earlier disclosure is to eliminate as prior art any disclosure or patent or patent application that occurs after the first public disclosure by the inventor, provided the inventor files a patent application on the subject matter within the one-year grace period.

New § 102 also defines common ownership under a joint research agreement (§ 102(c))(which seems to broaden the protections thereof from obviousness currently under § 103 to novelty under the new provisions), and the intent for "continuity" of the treatment of joint research agreements under the new law and the CREATE Act (§ 102(d)).

Section 2(c) amends current 35 U.S.C. § 103, which sub silentio repeals §§ 103(b) and (c):

A patent for a claimed invention may not be obtained, notwithstanding that 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.

Section 2(e) repeals statutory invention registrations, and §§ 2(f) and 2(g) are "conforming" amendments.

Section 2(h) provides new § 291 defining "derived patents":

(a)  In General- The owner of a patent may have relief by civil action against the owner of another patent that claims the same invention and has an earlier effective filing date if the invention claimed in such other patent was derived from the inventor of the invention claimed in the patent owned by the person seeking relief under this section.

(b)  Filing Limitation- An action under this section may only be filed within 1 year after the issuance of the first patent containing a claim to the allegedly derived invention and naming an individual alleged to have derived such invention as the inventor or joint inventor.

Unlike interferences, the remedy for derivation is by "civil action," a provision seemingly at odds with the concern expressed by the supporters of "first-inventor-to-file" that small inventors are disadvantaged under current law.  While it is certainly true that interference proceedings are costly, "civil actions" are notoriously costlier.

However, Section 2(i) provides for "derivation proceedings" in the Office by amendment of 35 U.S.C. § 135:

(a)  Institution of Proceeding- An applicant for patent may file a petition to institute a derivation proceeding in the Office.  The petition shall set forth with particularity the basis for finding that an inventor named in an earlier application derived the claimed invention from an inventor named in the petitioner's application and, without authorization, the earlier application claiming such invention was filed.  Any such petition may only be filed within 1 year after the first publication of a claim to an invention that is the same or substantially the same as the earlier application's claim to the invention, shall be made under oath, and shall be supported by substantial evidence.  Whenever the Director determines that a petition filed under this subsection demonstrates that the standards for instituting a derivation proceeding are met, the Director may institute a derivation proceeding.  The determination by the Director whether to institute a derivation proceeding shall be final and non[-]appealable.

(b)  Determination by Patent Trial and Appeal Board- In a derivation proceeding instituted under subsection (a), the Patent Trial and Appeal Board shall determine whether an inventor named in the earlier application derived the claimed invention from an inventor named in the petitioner's application and, without authorization, the earlier application claiming such invention was filed.  The Director shall prescribe regulations setting forth standards for the conduct of derivation proceedings.

(c)  Deferral of Decision- The Patent Trial and Appeal Board may defer action on a petition for a derivation proceeding until 3 months after the date on which the Director issues a patent that includes the claimed invention that is the subject of the petition.  The Patent Trial and Appeal Board also may defer action on a petition for a derivation proceeding, or stay the proceeding after it has been instituted, until the termination of a proceeding under chapter 30, 31, or 32 involving the patent of the earlier applicant.

(d)  Effect of Final Decision- The final decision of the Patent Trial and Appeal Board, if adverse to claims in an application for patent, shall constitute the final refusal by the Office on those claims.  The final decision of the Patent Trial and Appeal Board, if adverse to claims in a patent, shall, if no appeal or other review of the decision has been or can be taken or had, constitute cancellation of those claims, and notice of such cancellation shall be endorsed on copies of the patent distributed after such cancellation.

(e)  Settlement- Parties to a proceeding instituted under subsection (a) may terminate the proceeding by filing a written statement reflecting the agreement of the parties as to the correct inventors of the claimed invention in dispute.  Unless the Patent Trial and Appeal Board finds the agreement to be inconsistent with the evidence of record, if any, it shall take action consistent with the agreement.  Any written settlement or understanding of the parties shall be filed with the Director.  At the request of a party to the proceeding, the agreement or understanding shall be treated as business confidential information, shall be kept separate from the file of the involved patents or applications, and shall be made available only to Government agencies on written request, or to any person on a showing of good cause.

(f)  Arbitration- Parties to a proceeding instituted under subsection (a) may, within such time as may be specified by the Director by regulation, determine such contest or any aspect thereof by arbitration.  Such arbitration shall be governed by the provisions of title 9, to the extent such title is not inconsistent with this section.  The parties shall give notice of any arbitration award to the Director, and such award shall, as between the parties to the arbitration, be dispositive of the issues to which it relates.  The arbitration award shall be unenforceable until such notice is given.  Nothing in this subsection shall preclude the Director from determining the patentability of the claimed inventions involved in the proceeding.

The right is limited to an "applicant for patent" within one year after first publication of the derived application, thus imposing an obligation to monitor publication databases for any possibly derived patent applications (or patents).  In addition, the petition must be supported by "substantial evidence," but without any of the provisions for discovery (or obligations to provide evidence) currently available under interference provisions of current law.  In addition, the Board is given broad discretion to delay action on any petition until after the putatively derived patent has granted, without capacity to appeal such a decision (other than, perhaps, a "civil action").  And, while other portions of the bill establish the Patent Trial and Appeal Board that will be related to the current Board of Patent Appeals and Interferences, the Office will need to create the infrastructure for this "new" adjudicative body.  Section 2(j) of the bill strips current law of all references to interferences wherever they appear in the statute.

Finally (and in keeping with the way the bill was amended and passed), Section 2(k) provides for amending the false marking statute (35 U.S.C. § 292) to eliminate action by "private attorneys general," i.e., the public, to bring such actions, except for competitors who can show injury from the false marking, with damages limited to those "adequate to compensate for the injury."  This aspect of the law will apply retroactively to "all cases . . . pending on or after the enactment of [the] Act."

Section 2(l) introduces a 10-year "statute of limitations" into 35 U.S.C. § 32 regarding disciplinary proceedings before the Office and a biennial description of incidents that were barred from being brought under this section by the statute of limitations.  Section 2(m) relates to a small business study to determine the effects of the change to "first-inventor-to-file," with a Report to be provided to Congress not later than one year after the Act is enacted.  Similarly, Section 2(n) provides for a Report to Congress on prior user rights in the U.S. and abroad in Europe, Japan, Canada, and Australia and their effects "if any[] on small businesses, universities and individual inventors."

Finally, Section 2(o) provides that the effective date of this bill, if enacted, is 18 months from the date of enactment.

Analysis of additional provisions of S. 23 will appear in future posts.

By Donald Zuhn —

On Tuesday, the Senate passed the America Invents Act (S. 23) by a 95-5 vote (see "Senate Passes S. 23").  While the provisions that made it into the bill were not entirely clear yesterday, a version of the legislation as passed was posted on the THOMAS website today.  The bill moving to the House contains provisions on the following:

• First inventor to file (Sec. 2)
• Inventor's oath or declaration (Sec. 3)
• Virtual marking and advice of counsel (Sec. 4)
• Post-grant review proceedings (Sec. 5)
• Patent Trial and Appeal Board (Sec. 6)
• Preissuance submissions by third parties (Sec. 7)
• Venue (Sec. 8)
• Fee setting authority (Sec. 9)
• Supplemental examination (Sec. 10)
• Residency of Federal Circuit judges (Sec. 11)
• Micro entity defined (Sec. 12)
• Funding agreements (Sec. 13)
• Tax strategies deemed within the prior art (Sec. 14)
• Best mode requirement (Sec. 15)
• Technical amendments (Sec. 16)
• Clarification of jurisdiction (Sec. 17)
• Transitional program for covered business-method patents (Sec. 18)
• Travel expenses and payment of administrative judges (Sec. 19)
• Patent and Trademark Office funding (Sec. 20)
• Satellite offices (Sec. 21)
• Patent Ombudsman Program for small business concerns (Sec. 22)
• Priority examination for technologies important to American competitiveness (Sec. 23)
• Designation of Detroit satellite office (Sec. 24)

As we reported yesterday, a number of patent and industry organizations, including the American Intellectual Property Law Association (AIPLA), Innovation Alliance, Biotechnology Industry Organization (BIO), and Coalition for Patent Fairness, were quick to release statements regarding the Senate's passage of S. 23 (see "Reaction to Senate Passage of S. 23").  The Patent Office also issued a statement about the legislation, albeit prior to the Senate vote.  In a short press release issued in anticipation of the Senate vote, USPTO Director David Kappos "urge[d] the Senate to pass this crucial legislation," which he said would "help to deliver a 21st century patent system that better equips the USPTO to move innovative ideas with sound patent protection to the marketplace."  Not surprisingly, Director Kappos focused on provisions that would impact Office funding, citing an Federal Trade Commission (FTC) report recommending, in the Director's words, that "for our patent system to best serve America's innovators, it is essential that the USPTO have adequate funding to address the backlog of patent applications — one of the key reforms this legislation would make possible."

Last week, the Director wrote on his blog that the patent system was in "immediate need of attention," and that S. 23 would "update[] our patent system by offering greater certainty about patent rights, lower fees for independent inventors and micro-entities and faster alternatives to expensive litigation," as well as "enable[] a financially stable USPTO that promotes growth for innovators in all industries and of all sizes."  In his post, the Director cited the Statement of Administration Policy on S. 23 from the Office of Management and Budget (OMB), which notes that "[t]he Administration supports Senate passage of S. 23," stating that:

As a whole, this bill represents a fair, balanced, and necessary effort to improve patent quality, enable greater work sharing between the United States Patent and Trademark Office (USPTO) and other countries, improve service to patent applicants and the public at the USPTO, and offer productive alternatives to costly and complex litigation.

The Administration's statement continues:

By moving the United States to a first-to-file system, the bill simplifies the process of acquiring rights.  This essential provision will reduce legal costs, improve fairness, and support U.S. innovators seeking to market their products and services in a global marketplace.  Further, by providing authority for the USPTO to establish and adjust its fees to reflect changes in costs, demand, and workload, the bill would enhance productivity — reducing delay in the patent application process — and ensure full cost recovery at no taxpayer expense.

With respect to the Senate bill's first inventor to file provision, the Director writes that:

By moving the United States to a First-Inventor-to-File (FITF) system, the bill establishes greater speed and certainty about property rights in the innovation marketplace, while also leveling the playing field for anyone seeking to participate in global commerce.  While I recognize some have concerns about this switch, the reality is that the current First-to-Invent system is fraught with peril.  Under the current system, a host of objections can be raised in litigation that undermine a patentee’s rights.  Such litigation is expensive and time consuming.

The patent reform debate now moves to the House.  Based on the Administration's comments concerning S. 23, if the House passes legilsation resembling the Senate bill, the six-year trek to enact some form of patent legislation could be at an end.

By Donald Zuhn —

It took almost six years for Senate Judiciary Chairman Patrick Leahy (D-VT) to get a patent reform bill to the floor of the Senate for a vote.  And after the Senate passed the most recent version of Senator Leahy's bill (S. 23) by a 95-5 vote earlier today (see "Senate Passes S. 23"), it took only minutes for patent and industry organizations to start rolling out press releases regarding the bill's passage.

The American Intellectual Property Law Association (AIPLA) was one of the first to issue a statement, saying that it "applaud[ed] the Senate passage of critical patent reform legislation (S. 23), marking a significant milestone in the effort to secure the U.S. position as the worldwide leader in innovation and the jobs it produces."  The AIPLA commended the Senate, under the leadership of Chairman Leahy and Ranking Minority Member Charles Grassley (R-IA), for approving "a strong, bipartisan bill that includes the essential patent reform features, including the adoption of a first-inventor-to-file patent system, funding for the U.S. Patent and Trademark Office that will bring budget predictability to this critical agency, and the creation of an ever more effective post-grant review procedure."  The AIPLA stated that it hopes the legislation, which now moves to the House of Representatives, "will continue to advance expeditiously to the enactment of the most important patent legislation in nearly 60 years."  AIPLA Executive Director Q. Todd Dickinson called the passage of the bill a "historic step towards enactment of critical reforms to our patent system," and looked forward to "Congress finishing this work to enact the kind of patent reform the American innovation community needs and deserves."

In its statement, the Innovation Alliance "applaud[ed] the efforts of the Senate to date" and "recognize[d] that great strides have been made."  However, the group noted that it "remain[s] neutral on S. 23 as passed."  Among the group's "concerns" with the Senate bill were "the removal of the 'gatekeeper' compromise on damages achieved in the last Congress, as well as the creation of the new 'transitional post-grant review proceeding' for business method patents."  The group did find some positives in the Senate bill that passed, including provisions for an expanded post-grant system and an end to fee diversion.  With regard to the post-grant system, the Innovation Alliance stated that the bill "retains the important procedural safeguards that lessen the potential for abuse of the expanded post-grant system the Senate Judiciary Committee added to the bill last year."  As for fee diversion, the Innovation Alliance said the adoption of this provision was "overdue," adding that "ending fee diversion is now a goal that unites virtually all stakeholders on all sides of the patent debate."  According to the group's statement, the provision to end fee diversion would, more than any other provision of the bill, "promote the health of the innovation ecosystem in the United States."  The group concluded by saying that it "will continue to be a constructive voice in the ongoing debate, which we hope will result in the enactment of a bill the Innovation Alliance can support."  According to the Innovation Alliance website, the group "represents innovators, patent owners and stakeholders from a diverse range of industries that believe in the critical importance of maintaining a strong patent system that supports innovative enterprises of all sizes."

The Biotechnology Industry Organization (BIO) "hail[ed]" and "commend[ed] the Senate for its overwhelming passage" of S. 23, voicing its "appreciat[ion for] the dedication of Senate Judiciary Chairman Patrick Leahy (D-VT), Ranking Member Charles Grassley (R-IA) and the bill's other cosponsors for their tireless efforts to build bipartisan consensus on the legislation."  BIO stated that "[o]nce enacted into law, it will strengthen and improve our nation's patent system, spurring innovation and job creation."  (That assumes, of course, that the House finds favor with the Senate bill and that the President signs the bill into law.)  BIO contended that "improvements made by the America Invents Act would benefit all sectors of the U.S. economy by enhancing patent quality and the efficiency, objectivity, predictability, and transparency of the patent system," and concluded by "encourage[ing] the House of Representatives to consider patent reform without delay."

The Coalition for Patent Fairness issued a statement on its website saying that while the Senate "improved S.23 by removing the damages, venue, and willfulness provisions before the final vote," the group "continue[s] to have concerns about the bill and could not support its passage at this time."  As the patent reform debate moves to the House, the organization noted that it "stands ready to help reach a consensus on the most efficient way to lessen the growing burden of abusive and unjustified patent infringement claims."  According to the Coalition's website, the group, which represents a broad range of companies and trade associations in the financial services, technology, energy, chemical, manufacturing and media industries, is "committed to the passage of patent legislation that will foster innovation and economic growth."

By Kevin E. Noonan —

The Senate voted today in favor of S. 23, the "America Invents Act," aka the Patent Reform Act of 2011.  The vote was 95-5, with Senators Barbara Boxer (D-CA), Maria Cantwell (D-WA), Mike Crapo (R-ID), John Ensign (R-NV), and James Risch (R-ID) voting against.

The version of the bill that passed the Senate is a far cry from the many earlier versions of the bill, from this and previous Congresses, and contains provisions that may affect the following aspects of patent law:

• First inventor to file (Sec. 2)
• Inventor's oath and declaration (Sec. 3)
• Defenses; evidentiary requirements (Sec. 4)
• Post-grant review (Sec. 5)
• Establishment of Patent Trial and Appeal Board (Sec. 6)
• Pre-issue third party submissions (Sec. 7)
• Venue (Sec. 8)
• PTO fee-setting authority (Sec. 9)
• Supplemental examination (Sec. 10)
• Residency of Federal Circuit Judges (Sec. 11)
• Creation of Micro-entities (Sec. 12)
• Changes in funding agreement percentages (Sec. 13)
• Tax strategies deemed to be in the prior art (Sec. 14)
• Best mode requirement (Sec. 15)
• Transitional program for Covered Business Method Patents (Sec. 18)

(We say "may affect" as the Library of Congress THOMAS website has not yet posted the text of the bill that the Senate passed today.)

The business method patents provisions, sponsored by Senator Schumer (D-NY), provide an administrative procedure for challenging business method patents:

SEC. 18. TRANSITIONAL PROGRAM FOR COVERED BUSINESS-METHOD PATENTS.

(a) References.–Except as otherwise expressly provided, wherever in this section language is expressed in terms of a section or chapter, the reference shall be considered to be made to that section or chapter in title 35, United States Code.

(b) Transitional Program.–

(1) ESTABLISHMENT.–Not later than 1 year after the date of enactment of this Act, the Director shall issue regulations establishing and implementing a transitional post-grant review proceeding for review of the validity of covered business-method patents. The transitional proceeding implemented pursuant to this subsection shall be regarded as, and shall employ the standards and procedures of, a post-grant review under chapter 32, subject to the following exceptions and qualifications:

(A) Section 321(c) and subsections (e)(2), (f), and (g) of section 325 shall not apply to a transitional proceeding.

(B) A person may not file a petition for a transitional proceeding with respect to a covered business-method patent unless the person or his real party in interest has been sued for infringement of the patent or has been charged with infringement under that patent.

(C) A petitioner in a transitional proceeding who challenges the validity of 1 or more claims in a covered business-method patent on a ground raised under section 102 or 103 as in effect on the day prior to the date of enactment of this Act may support such ground only on the basis of–

(i) prior art that is described by section 102(a) (as in effect on the day prior to the date of enactment of this Act); or

(ii) prior art that–

(I) discloses the invention more than 1 year prior to the date of the application for patent in the United States; and

(II) would be described by section 102(a) (as in effect on the day prior to the date of enactment of this Act) if the disclosure had been made by another before the invention thereof by the applicant for patent.

(D) The petitioner in a transitional proceeding, or his real party in interest, may not assert either in a civil action arising in whole or in part under section 1338 of title 28, United States Code, or in a proceeding before the International Trade Commission that a claim in a patent is invalid on any ground that the petitioner raised during a transitional proceeding that resulted in a final written decision.

(E) The Director may institute a transitional proceeding only for a patent that is a covered business-method patent.

(2) EFFECTIVE DATE.–The regulations issued pursuant to paragraph (1) shall take effect on the date that is 1 year after the date of enactment of this Act and shall apply to all covered business-method patents issued before, on, or after such date of enactment, except that the regulations shall not apply to a patent described in the first sentence of section 5(f)(2) of this Act during the period that a petition for post-grant review of that patent would satisfy the requirements of section 321(c).

(3) SUNSET.–

(A) IN GENERAL.–This subsection, and the regulations issued pursuant to this subsection, are repealed effective on the date that is 4 years after the date that the regulations issued pursuant to paragraph (1) take effect.

(B) APPLICABILITY.–Notwithstanding subparagraph (A), this subsection and the regulations implemented pursuant to this subsection shall continue to apply to any petition for a transitional proceeding that is filed prior to the date that this subsection is repealed pursuant to subparagraph (A).

(c) Request for Stay.–

(1) IN GENERAL.–If a party seeks a stay of a civil action alleging infringement of a patent under section 281 in relation to a transitional proceeding for that patent, the court shall decide whether to enter a stay based on–

(A) whether a stay, or the denial thereof, will simplify the issues in question and streamline the trial;

(B) whether discovery is complete and whether a trial date has been set;

(C) whether a stay, or the denial thereof, would unduly prejudice the nonmoving party or present a clear tactical advantage for the moving party; and

(D) whether a stay, or the denial thereof, will reduce the burden of litigation on the parties and on the court.

(2) REVIEW.–A party may take an immediate interlocutory appeal from a district court's decision under paragraph (1). The United States Court of Appeals for the Federal Circuit shall review the district court's decision to ensure consistent application of established precedent.

(d) Definition.–For purposes of this section, the term “covered business method patent'' means a patent that claims a method or corresponding apparatus for performing data processing operations utilized in the practice, administration, or management of a financial product or service, except that the term shall not include patents for technological inventions. Solely for the purpose of implementing the transitional proceeding authorized by this subsection, the Director shall prescribe regulations for determining whether a patent is for a technological invention.

(e) Rule of Construction.–Nothing in this section shall be construed as amending or interpreting categories of patent-eligible subject matter set forth under section 101.

Subsection (e) is reportedly intended to preclude courts from ascribing to Congress any intention to put its imprimatur on business method patents as patent-eligible subject matter (without deciding that such patents do not encompass patent-ineligible subject matter).

The House of Representatives must next consider patent reform, either by adopting (in whole or in part) S. 23 or by proposing its own version of patent reform.  Readers are reminded that the bill passed by the House in September 2007 looked quite different from the bill the Senate passed today (see "Patent 'Reform' Bill Passes House of Representatives").