Patent reform has been a popular topic of discussion and public interest over the past few years, although little reform has followed the America Invents Act of 2011. Reform efforts have attempted to target the increased number of patent assertions by non-practicing entities but have yet to pass any significant legislation on the federal level. Some commentators have pointed to recent Supreme Court cases as alleviating some of these unresolved tensions by changing the scope of patentable subject matter1 and lowering the bar to obtain attorney’s fees.2 On the other hand, pro-patentee advocates have seen this evolving law and increased use of post-grant proceedings to invalidate patents as a threat to the security of their patent rights. The Support Technology & Research for Our Nation’s Growth and Economic Resilience (STRONGER) Patents Act of 20173 introduced by Senator Coon and co-sponsored by Senators Cotton, Durbin and Hirono attempts to provide stronger protections for patentees.4
Motivations of the STRONGER Patents Act of 2017
The motivations for introducing the STRONGER Patents Act of 2017 fall into four basic categories: stronger infringement enforcement, fairness in Patent Office administrative challenges, reducing abusive patent demand letters, and fully funding the USPTO to ensure timely, high-quality patents.5 The senators sponsoring this legislation have stated their concern that a weakened patent system may reduce the United States’ historic edge in innovation and the patent system’s impact on the economy. To address these issues, the STRONGER Patents Act would amend a wide range of statutory provisions under Title 35 of the United States Code governing the bulk of the United States’ patent system. This article will briefly discuss several of the proposed changes that are newly introduced in the 2017 version of the proposed Act.
Under 35 U.S.C. § 283, a court may grant injunctions using equitable considerations “to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.”6 Courts have not, as a matter of course, issued injunctions upon a finding of infringement of a valid patent.7 Even if injunctive relief is the most likely outcome, courts typically weigh the equities of issuing an injunction before its grant.8 The STRONGER Patents Act would amend Section 283 to create a statutory presumption that “further infringement of the patent would cause irreparable injury” and “remedies at law are inadequate to compensate for that injury” upon a finding of infringement of a patent not proven invalid or unenforceable.9 While not necessitating an injunction in every case, such statutory language would support injunctions as the default remedy, requiring the accused infringer to overcome the presumptions of irreparable harm and inadequacy of other remedies.
Section 271 of Title 35 of the United States Code provides the statutory basis for asserting an infringement action under three theories: direct infringement, inducement of infringement, and contributory infringement.10 The contours of inducement and contributory infringement have been reshaped over the last decade by a Supreme Court ready and willing to take up patent cases and overturn established precedent in the Federal Circuit.11 In response to these changes, the STRONGER Patents Act attempts to roll-back or mitigate the changes to support a wider range of infringement theories.
For example, Section 108 of the Act would amend subsection (b) to expand inducement liability to accused infringers beyond the current law, most recently espoused by the Supreme Court in Commil Usa, LLC v. Cisco Systems, Inc.12 and Global-Tech Appliances, Inc v. SEB S.A.13 In particular, this section would allow a finding of inducement infringement “upon a showing that the accused infringer intended to cause the acts that constitute infringement, without regard to whether the accused infringer know of the patent.”14 This would mark a sharp deviation from the current law established in the Supreme Court, which requires both knowledge of the patent and knowledge that the “induced acts constitute patent infringement.”15 The removal of the requirement of knowledge of the patent, as well as an implied abrogation of the knowledge that the acts would be infringing, would greatly expand the possible scenarios of inducement infringement.
Further, Section 108 of the Act would also add a new subsection (j) to Section 271 that purports to clarify the issue of divided infringement. The Supreme Court in Limelight Networks, Inc. v. Akamai Techs., Inc. held that for contributory infringement, one entity must practice all the steps of the patented process to find direct infringement to support a claim of contributory infringement.16 Subsequently, the Federal Circuit, en banc, found that performance of a step may be attributed to the accused infringer, if the accused infringer directed another to perform the step.17 The new subsection would clarify that “it shall not be a requirement that the steps of the patented process be practiced by a single entity,” for purposes of inducing infringement or for contributory infringement of a process patent.18 One reading of this provision is simply a codification of the law developed in the Akamai cases that does not require a strict single-entity performance rule. On the other hand, a broad reading of this provision could support separating inducement infringement and contributory infringement from the single-entity default rule and allowing a broader range of divided infringement cases to move forward than the current law allows.
Mitigating Risks to the Patent Owner in Post Grant Procedures
The proliferation of the use of post-grant proceedings to challenge the validity of patents has garnered varied reactions from the patent bar. Pro-patentee groups see the myriad of ways that patent rights may be lost in these administrative proceedings as concerning at best. The STRONGER Patents Act of 2017 includes several provisions targeted towards moving the balance back towards the patentee during these proceedings, including several new provisions added in the 2017 update to the proposed Act.
Among these new provisions are several proposed amendments that limit the type and frequency of challenges to a patent holder’s patented claims. For example, subsections (d) in Sections 102 and 103 of the Act would prohibit institution of inter partes review or post-grant review for claims for which such a proceeding had previously been instituted.19 Thus, a claim in a patent would only be subject to challenge in one post-grant proceeding, even if the claim is asserted against multiple parties in different infringement actions. Another protective provision is subsection (f) which would estop a party from challenging a claim as invalid based on Section 102 or 103 of title 35 of the United States Code if the party has already petitioned for inter partes review or post-grant review of the claim that resulted in an institution decision.20 This would greatly expand the current estoppel provision that is limited to preventing challenges of validity on the grounds that were raised or reasonably could have been raised during an inter partes review.21 Additionally, subsection (g) would further expand the estoppel provision to apply to those making any financial contribution to the post-grant challenge.22 Thus, many of the new provisions would enhance protection for the patent holder by further limiting challenges to the patented claims.
In further strengthening the patent holder’s position in post-grant proceedings, amendments proposed in subsection (h) of Sections 102 and 103 of the Act would stay or prohibit the institution of post-grant proceedings after a district court has found the challenged patent valid.23 This would place determinations of validity at the district court level at a higher priority. As a result, district courts may be less willing to issue stays pending a post-grant review or inter partes review.
The new provisions of the updated STRONGER Patents Act of 2017 would further shift the balance between patent holders and accused infringers in several areas of the law. In particular, the Act would drastically change the operation of post-grant proceedings. Additionally, the Act would open up inducement and contributory infringement to a larger range of infringement scenarios. While passage is no guarantee, passage of even some of the provisions in the proposed Act could have lasting effects on the evolving patent law in the United States.