Key Principles for Reform
The National Academy of Sciences Report on the patent system is a thoughtful and balanced roadmap for reform. The NAS' four-pronged set of patent quality and patent litigation reforms are based upon a comprehensive and inclusive four-year study.
- Provide the USPTO with adequate resources to assure quality examination of all patent applications.This may require legislation separate from ongoing efforts aimed at amendments to the substantive patent law.
- Significantly limit "subjective elements" in patent litigation.These include the "inequitable conduct" defense to a patent's enforceability, awarding punitive damages based upon "willful infringement," and the "best mode" requirement.As examples of needed reforms, limitations on the unenforceability defense based upon inequitable conduct should, at a minimum, insulate wholly valid patents from "inequitable conduct" allegations and the "best mode" requirement should be repealed outright.
- Enact the NAS-recommended harmonizing changes to the U.S. patent laws, i.e., adopt the first-inventor-to-file principle and eliminate the "best mode" requirement.
- Provide an "open review" (post-grant opposition) procedure that facilitates challenging questionable patents in the USPTO.The "open review" procedure should be structured to provide adequate incentives for the public to make prompt challenges to patents once issued, protect investors against frivolous challenges or other potential harassment by challengers, and secure "quiet title" for inventors following the opportunity for a patent to be challenged.
Patent reform should avoid initiatives that are unfair to patent owners, especially those that would diminish incentives for innovation and create unfortunate precedents internationally.
- Any legislation relating to determining a "reasonable royalty" should assure that all inventors can obtain adequate compensation for infringement of their patents.
- Codification of the "apportionment principle" should be undertaken only to address inconsistencies in the application of the law and must avoid injecting unacceptable uncertainty into the determination of damages based upon a "reasonable royalty" determination.
Patent reforms should avoid controversial provisions for which no broadly based support currently exists and for which, at the present time, further vetting is needed as to their need and merit.This includes:
- Granting broad rulemaking authority to the USPTO on issues of substantive patent law.
- Authorizing interlocutory appeals to the Federal Circuit on "claim construction" rulings.
- Changing a patent owner's prerogative to choose a reasonable judicial venue for enforcing a patent.
- Enacting a "loser pays" principle for awarding attorney fees.
- Repeal of the 35 U.S.C. § 271(f) that permits patent infringement claims to be circumvented by making the components of patented products here and assembling them offshore.