The House Enters the Patent Reform Fray

The U.S. House of Representatives March 30 began discussion on a patent reform bill, H.R. 1249, introduced earlier that day. The House bill (known as the America Invents Act) aligned with a Senate bill (S. 23) in a number of ways but also had some differences, as expected.

Throughout the month, a number of changes to the House bill were proposed.  Most of those changes were designed to bring the House bill closer to the closer to the Senate’s bill.  For example, on April 12, 2011 Lamar Smith (R-TX) floated a draft of a manager’s amendment, scheduled to be discussed in an April 14 markup session.  The draft expands an inventor’s options during the one-year grace period before patent application filing, curtails options to use the prior user rights defense and adopts the heightened threshold for inter partes review of the Senate bill.

Another run was made to remove the transition to a first-to-file system.   That effort failed.   However, Rep. Jim Sensenbrenner (R-WI) vowed to try again to remove the first-to-file provision. 

One interesting addition to the House bill is the commissioning of a federal study of patent suits by non-practicing entities.  

After the intense mark-up session on April 14, the House Judiciary Committee voted 32-3 to report out an amended H.R. 1249, sending the revised legislation to the House floor for further debate and a vote on the long-awaited bill's final passage. 

As passed to the floor, the House bill transitions the United States to a first-to-file system, establishes a new post-grant review process, subjects business method patents to a special ex partereexamination procedure, allows third parties to submit prior art for review, allows the U.S Patent and Trademark Office (USPTO) to set its fee amounts and hang onto the fees it collects and retains a best mode requirement for patent application filings.

Although the House bill largely tracks the Senate version (see IP Update, Vol. 13, No. 2) and both move the United States from a first-to-invent to a first-to-file system (thus harmonizing the U.S. system with the systems in place in most industrialized countries), there are a few differences in terms the post grant opposition systems provided by each.

Post-Grant Oppositions

The post-grant opposition period in H.R. 1249 is longer than that provided in S.23 (12 months as opposed to nine months) and includes, in additional to a showing of a likelihood that at last one claim will be found unpatentable as the threshold basis for acceptance, the existence of important unsettled legal question.

The House bill also provides for an automatic stay of declaratory judgment actions if the declaratory judgment plaintiff is the party in interest petitioning for post-grant review and a discretionary stay in the event of litigation involving a patent involved in post-grant review.