A few hours ago the House of Representatives passed HR 1249. HR 1249 is disingenuously called the “America Invents Act”; for reasons that have been explicated on other blogs, and may be discussed in more posts in the future here, a better name probably would have been the “America Invents A New Way To Stifle Innovation Act”. If enacted, the bill will bring sweeping changes to the U.S. patent system, none of them good (except, possibly, the end of universal standing for false marking suits).
For people who have been following US patent “reform” for a while, a curious aspect of what just passed in the House is that it bears little resemblance to the “reform” efforts of previous years. That’s probably due to the fact that in the interim, the courts addressed many of the issues raised in earlier “reform” proposals. For example, the issue of patent damages vexed companies like Microsoft, which were exposed to large damage awards for patents that covered miniscule aspects of their products. Among other things, those companies sought legislation to require “damage apportionment”, i.e. to force courts to award damages only commensurate with the proportional contribution of the claimed invention to the infringing product. But then the Federal Circuit, and several district court decisions authored by (now CAFC Chief) Judge Rader sitting by designation, reined in damage awards, in part by raising the quanta of proof required to prove damages. So this year’s legislation contained no amendments regarding damages. (See, e.g., IP Innovation LLC v. Red Hat, Inc. (E.D. Tex. 2010), ResQNet.com v Lansa, (Fed. Cir. 2010), Lucent Techs. Inc. v. Gateway, Inc., et al. (Fed. Cir. 2009), Cornell University v. Hewlett Packard (N.D. NY 2009)).
Instead, with the issue of damages out of the way, it appears that the established companies who most benefit from the House bill turned their attention to legislative amendments farther down their wish list, amendments that in the past they could only dream about getting. Like prior user rights against patentees for companies that choose to keep their processes secret rather than disclose them in a patent.
In this respect, Israel unfortunately seems poised to emulate the USA. As discussed in an earlier post, Israel is in the process of adopting legislation to facilitate 18-month publication of patent applications. Plenty of jurisdictions do that, and you’d think it would be a straightforward amendment. But the local generic drug industry looked at this as an opportunity to slip in some wish-list amendments. Like making it impossible to broaden the claims of an application after it’s been filed. The Justice Ministry, which authored the bill, relented on that point, but then considered an equivalent (and equally ridiculous) proposal to allow the broadening of claims but to also grant intervening rights to third parties that rely on things that were disclosed but unclaimed in the published patent application. That proposal as well wasn’t adopted, and the draft bill in its present form – the one that will be presented to the Knesset for a first reading – will leave unchanged the provisions of the statute regarding amendments.
Of course, that’s not the end of the story, and it’s certain that after passing the first reading, the generics will lobby the Knesset on the points where their lobbying efforts in the Justice Ministry failed. One possible proposal: to enable a third party to request commencement of examination of someone else’s application.
What you won’t see is a proposal to end to pre-grant oppositions, or to end the loser-pays systems in those oppositions (a topic which is going to be the subject of a post in the hopefully near future).
(A side note: one thing I’ve always found interesting is that the law firm that is home to Israeli generic drug industry’s key lobbyist still manages to prosecute patent applications for innovators like Genentech and AstraZeneca. I wonder if they know that that firm is working against their interests.)
On the other hand, once the 18-month publication amendment passes the first reading and goes into committee for further consideration and revision, it is unclear when if ever it will see the light of day. That’s because the committee chair is irked at the Justice Ministry over the issue of publication fees that he says should be refunded (the subject of a way-too-long-in-progress post), and has vowed not to let any patent-related legislation move forward until that money is refunded.