During the past month, the patent reform legislation percolating through the legislative process underwent a number of changes. A flurry of activity occurred in early March. Major changes were made to the bill by a Managers’ Amendment. Some of those amendments included removal of the injunction provisions, deletion of the venue provisions and stripping of the damages and willfulness provisions.

However, a number of provisions were added on the floor of the Senate. Some of the additions included giving the U.S. Patent and Trademark Office (USPTO) the ability to prioritize applications to help the economy, a transitional program for post-grant review of business method patents and the end of the fee diversion issue for the USPTO.

One senator tried to remove the first-to-invent provision. This attempt was met with much resistance, and the first-to-file provision survived.

On March 8, 2011, by an overwhelming margin of 95-5, the Managers’ Amendment passed the Senate. Key provisions of the bill that passed the Senate include:

  • Transition from a “first-to-invent” to a “first-to-file” system and elimination of §102(g), interferences, issues of conception, diligence, reduction to practice, concealment and suppression. The only remaining “priority” type issue retained in §102 is derivation;
  • Third-party submissions of printed publication prior art in pending applications;  
  • USPTO fee-setting authority and elimination of fee diversion;  
  • Establishment of post-grant nine-month first window patent opposition system while maintaining inter partes reexamination in a second window starting nine months after patent grant;  
  • Repeal of the residency requirement for Federal Circuit judges;  
  • Micro entity status for reduced fees;  
  • Unpatentability of certain tax strategies (while retaining patentability for tax-return filing software);  
  • Elimination of the best-mode defense;  
  • Creation of a special post-grant review for business method patents (in light of Bilski decision);  
  • Authority to establish USPTO satellite offices;  
  • Creation of a USPTO small-business ombudsman;  
  • USPTO authority to prioritize examination of inventions of national importance;  
  • Limiting false-marking qui tam damages to the federal government and those who have suffered competitive injury; and  
  • Elimination of prior user rights.  

It’s important to note that while passing the Senate is significant, the bill must still pass the House of Representatives. Two key areas that are likely to be debated in the House are the first-to-file provision and the post-grant review provisions. However, Senator Leahy (D-VT) has indicated that the managers’ amendments were made with to incorporate the ideas of the House bill.

Stay tuned as the debate unfolds.

Assuming the bill is passed into law as-is, there are a number of things to note. For example, §§102 and 103 would be largely rewritten. Under new §102(a), invention date rights are (with certain exceptions) eliminated. In terms of the prior art status of a document, the focus will simply be on the “effective filing date” of the application in issue.

The scope of prior art would be expanded and therefore should make it more difficult to obtain patent protection. Also, the traditional one-year grace period would be limited in its availability. That is, it would only apply to negate pre-filing disclosures by the inventor, derived from the inventor or after the inventor had already publicly disclosed. However, “disclosure” is not defined.

Attention now shifts to the House side, where the leadership appears ready to move forward with its own revision of patent reform legislation.