Baker Donelson - USA
In June 2017 the Support Technology and Research for Our Nation's Growth and Economic Resilience (STRONGER) Patents Act of 2017 was introduced in the Senate. The new bill seeks to substantially change the way issued patents are reviewed and enforced.
The bill was introduced by Senator Chris Cooms of Connecticut, along with Senators Tom Cotton, Dick Durbin and Mazie Hirono. The bill presents a decidedly pro-patent response to the veritable onslaught of patent invalidations produced by inter partes review and its enabling legislation known as the America Invents Act. The bill also strengthens the ability of patent owners to obtain an injunction against infringers. While it has garnered virtually no attention in the press due to the pending healthcare bill, the act should be of considerable interest to the nation's patent practitioners.
The preamble to the bill states that it aims to "strengthen the position of the United States as the world's leading innovator by amending Title 35, United States Code, to protect the property rights of the inventors that grow the country's economy". The bill then sets forth a list of benefits of a strong patent system. For example, Sub-section 5 of the preamble provides that "strong patent protection improves the chances of success for small companies and increases their chances of securing financing from investors". Sub-section 6 states that "intellectual property-intensive industries in the United States generate tens of millions of jobs for individuals in the United States".
The preamble also lists a series of adverse circumstances currently prevailing within the patent system. Sub-section 11 notes that the comprehensive 2011 reform of patent laws provided by the America Invents Act has prompted "the filing of repetitive petitions for [inter partes] and post-grant reviews that have the effect of harassing patent owners". These agency proceedings have also produced "the unnecessary duplication of work by the district courts of the United States and the Patent Trial and Appeal Board".
In response, the STRONGER Patents Act presents a series of amendments to the America Invests Act. These first include providing that claims in a patent shall be construed with reference to the "ordinary and customary meaning of the claim as understood by a person having ordinary skill in the art to which the claimed invention pertains". This is an attempt to abolish the ‘broadest reasonable interpretation’ test currently used in reviewing challenged patent claims and hopefully produce narrower claim constructions. The Patent Trial and Appeal Board (PTAB) would be required to follow the same claim construction and burden of proof standards that are applied in district court. The proposed amendment also provides that "if a court has previously construed a challenged claim of a patent or a challenged claim term in a civil action to which the patent owner was a party, the office shall consider that claim construction". Such would effectively end the practice of losing litigants gaining a second bite at the invalidity apple through inter partes review.
Similarly, the proposed act provides that:
"the Director shall not authorize an [inter partes] review to be instituted on a claim challenged in a petition if the Director has previously instituted an [inter partes] review or post-grant review with respect to that [same] claim."
This is true regardless of who brought the original petition. In addition, no inter partes review proceeding shall be instituted:
"unless the Director determines that the information presented in the petition filed under Section 311 and any response filed under Section 313 shows that there is a reasonable likelihood that the petitioner would prevail with respect to at least one of the claims challenged in the petition."
A similar provision is provided for post-grant reviews. A refusal to institute inter partes or post-grant reviews may not be appealed. In contrast, a losing patent owner may appeal a finding of claim invalidity to the Federal Circuit.
The new bill also addresses the issue of standing, by limiting who can file inter partes and post-grant review petitions. To be eligible to file a petition, one must have a real and substantial patent infringement controversy with the patent owner.
The bill also seeks to modify the Supreme Court's decision in eBay v MercExchange. The bill prescribes that, on a finding of infringement, a district court shall presume the existence of irreparable injury. In addition, the court shall presume that remedies available at law are inadequate to compensate for that injury. This tilts two of the four eBay factors required for issuing an injunction in the direction of the patent owner.
The bill creates a right in favour of the patent owner, during an inter partes or post-grant review proceeding, to cancel a claim and to propose "a reasonable number of substitute claims whose patentability will be adjudicated by [the PTAB]". Any such amendment may not enlarge the scope of the claims of the patent or introduce new matter.
The above is only an introduction to the STRONGER Patents Act. The proposed act is quite comprehensive in its scope. For example, the bill makes another effort at regulating the sending of patent infringement cease and desist letters. State laws that have been passed seeking to regulate demand letters are expressly preempted.
While some decry the STRONGER Patents Act as the end of PTAB reviews, it appears to offer some much-needed relief for patent owners.
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