On October 23, 2014, Congressman Goodlatte (R-VA) introduced the “Innovation Act,” which is intended “to make improvements and technical corrections” to the Leahy-Smith America Invents Act (AIA) “and for other purposes.” Although the bulk of the Act focuses on patent litigation, Section 9 includes significant changes to a variety of substantive provisions of U.S. patent law that will impact an applicant’s ability to obtain a patent in the first place. A hearing before the House Judiciary Committee is scheduled for Tuesday, October 29, 2013.
Section 9’s Substantive Changes
Section 9 includes a number of substantive changes to the new patent trial proceedings (inter partes review, post-grant review, and covered business method patent review) that you can read about in this Foley & Lardner LLP News Alert. Here, I focus on other substantive changes included in Section 9.
Repealing 35 USC § 145
Section 9(a) would eliminate an applicant’s ability to file a civil action to obtain a patent, by repealing 35 USC § 145.
The USPTO was not pleased with the Supreme Court decision in In re Hyatt, and so has turned to Congress to do away with an applicant’s rights to seek redress in a district court. The USPTO has characterized Hyatt as permitting applicants to withhold relevant evidence from the USPTO and then obtain a favorable decision from the district court. As I have written previously, however, applicants are incentivized to present relevant evidence during the USPTO examination process, but the USPTO’s own rules and practices make it difficult for them to do so. As very few § 145 actions have been filed, the USPTO’s complaint of abuse seems unfounded, and a wholesale elimination of this long-standing right seems heavy-handed.
The effective date of this provision also is troubling, as it would apply to “any proceeding in which a decision is made by the [PTAB] on or after the date of enactment.” This means that § 145 would not be available to applicants with pending applications, including applicants with appeals already pending before the PTAB.
“Codification” Of Obviousness-Type Double-Patenting For First-Inventor-To-File Patents
Section 9(d) would add a new statutory provision (35 USC § 106) relating to obviousness-type double patenting that would apply to applications and patents examined under the first-inventor-to-file version of 35 USC § 102:
§ 106. Prior art in cases of double patenting
A claimed invention of a patent issued under section 151 (referred to as the ‘first patent’) that is not prior art to a claimed invention of another patent (referred to as the ‘second patent’) shall be considered prior art to the claimed invention of the second patent for the purpose of determining the nonobviousness of the claimed invention of the second patent under section 103 if—
(1) the claimed invention of the first patent was effectively filed under section 102(d) on or before the effective filing date of the claimed invention of the second patent;
(2) either—
(A) the first patent and second patent name the same inventor; or
(B) the claimed invention of the first patent would constitute prior art to the claimed invention of the second patent under section 102(a)(2) if an exception under section 102(b)(2) were deemed to be inapplicable and the claimed invention of the first patent was, or were deemed to be, effectively filed under section 102(d) before the effective filing date of the claimed invention of the second patent; and
(3) the patentee of the second patent has not disclaimed the rights to enforce the second patent independently from, and beyond the statutory term of, the first patent.
The statute also includes provisions authorizing the USPTO Director to specify requirements for a Terminal Disclaimer to overcome this type of issue.
New § 106 would take effect on the date of enactment of the Innovation Act, and would apply “only if both the first and second patents” are subject to the first-inventor-to-file version of 35 USC § 102.
Apparently, some have questioned whether first-inventor-to-file applications/patents are subject to the judicially-created doctrine of obviousness-type double patenting. To the extent that this provision is intended to ensure that they are, it appears to go both too far and not far enough, as I will explore in another article.
Codification of Exelixis II
Section 9(f) would codify the district court decision in Exelixis II, by amending 35 USC § 154(b)(1)(B) as follows:
(B) Guarantee of no more than 3-year application pendency.—
Subject to the limitations under paragraph (2), if the issue of an original patent is delayed due to the failure of the United States Patent and Trademark Office to issue a patent within 3 years after the actual filing date of the application under section 111 (a) in the United States or, in the case of an international application, the date of commencement of the national stage under section 371 in the international application, the term of the patent shall be extended 1 day for each day after the end of that 3-year period until the patent is issued, not including—
(i) any time consumed by after continued examination of the application is requested by the applicant under section 132 (b);
(ii) any time consumed by a proceeding under section 135 (a), any time consumed by the imposition of an order under section 181, or any time consumed by appellate review by the Patent Trial and Appeal Board or by a Federal court; or
(iii) any delay in the processing of the application by the United States Patent and Trademark Office requested by the applicant except as permitted by paragraph (3)(C),the term of the patent shall be extended 1 day for each day after the end of that 3-year period until the patent is issued.
This change would take effect immediately and would apply to all current and future granted patents and pending patent applications.
Both Exelixis I and Exelixis II are pending review at the Federal Circuit, with oral argument scheduled for November 5, 2013. If the Federal Circuit does not agree with the USPTO’s interpretation of the current version of 35 USC § 154(b)(1)(B), would the retroactive application of the amended statute improperly divest patent owners of a longer patent term?
Clarification of Federal Interest In Patent Questions
Section 9(g) reads, in part, as follows:
9 (g) CLARIFICATION OF JURISDICTION.—
(1) IN GENERAL.—The Federal interest in preventing inconsistent final judicial determinations as to the legal force or effect of the claims in a patent presents a substantial Federal issue that is important to the Federal system as a whole.
This provision would apply “to all cases filed on, after, or pending on, the date of the enactment,” but would not apply “to a case in which a Federal court has issued a ruling on whether the case or a claim arises under any Act of Congress relating to patents or plant variety protection before the date of the enactment of this Act.”
It is believed that this provision is a response to the Supreme Court decision in Gunn v. Minton, although it does not expressly refer to that case or patent malpractice claims.
Applicants Need To Make Their Concerns Heard
It is likely that the patent litigation and patent trial provisions of the Innovation Act will receive the most attention and garner the most debate. Applicants who are concerned about the implications and effects of these substantive changes included in Section 9 should make their voices heard, through their involvement with patent bar associations, and by contacting their Congressmen and Senators.