Sweeping Changes Proposed in Patent Reform Act

Tue, 8 Aug 2006 16:11:00 EST

Senators Patrick Leahy and Orin Hatch introduced the Patent Reform Act of 2006 to the Senate, it hopes to bring sweeping changes to the way patents are currently handled in the United States. The 45-page bill proposes legislation that Leahy calls 'a necessity.'

"Specifically, it would shift to a 'first to file' method of awarding patents, which is already used in most foreign countries, instead of the existing 'first to invent' standard, which has been criticized as complicated to prove. Such a change has already earned backing from Jon Dudas, chief of the U.S. Patent and Trademark Office.

The bill would also establish a 'postgrant opposition' system that would allow outsiders to dispute the validity of a patent before a board of administrative judges within the Patent Office, rather than in the traditional court system. The idea behind such a proceeding, also endorsed by the Patent Office, is to stave off excessive litigation.

The Senate version appears to give broader leeway for such challenges, offering up to 12 months--as opposed to the House's nine-month window--after the patent is awarded for challengers to file a 'petition for cancellation.' That time period could then be widened even further, with a second window available if the petitioner 'establishes a substantial reason to believe that the continued existence of the challenged claim causes or is likely to cause the petitioner significant economic harm.' Challengers would be limited, however, in the issues they could raise after that first year expires.

In addition, the Hatch-Leahy bill would place new restrictions on the courts where patent cases could be filed--an attempt at rooting out 'forum shopping' for districts known for favorable judges. It would also curb the amount of damages for winners of infringement suits. Perhaps most notably, and in a departure from the House version, courts would have to calculate the royalties owed by infringers based solely on the economic value of the 'novel and nonobvious features' covered by the disputed patent, not on the value of the product as a whole."

Read more at CNet News

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