Legislative patent reform still has a long road to travel before reaching its conclusion. However, the passage of H.1908 by the House of Representatives represents a major leap forward along the path. The following are some highlights of the statute as passed. [H.1908.As.Passed].
First to file system: Obviousness and novelty would now be considered as of the “effective filing date.” Novelty grace period would be eliminated except for the inventor’s own disclosures. Although unclear, the grace period appears to be completely eliminated for obviousness analysis. Interferences are gone.
Damages: Reasonable royalty calculations (the most common damage awards) would all require courts to conduct a thorough analysis to ensure that damages are equal to the “economic value [of the invention] properly attributable to the patent's specific contribution over the prior art.” The entire value of a product or process can only be the basis for royalty calculations if the innovation is the “predominant basis” for market demand of the product. (a showing that may be impossible in most cases). Overall this would reduce damage awards.
Search Reports: PTO would be granted discretion in ordering search reports for all applications except those by a new group called ‘micro-entities.’
Treble Damages: The statute explicitly calls-out ‘willfulness’ as the sole reason for enhanced damages then severely limits the facts where willfulness can be found. Overall this reduces the likelihood of awarding treble damages.
Post-Grant Review: In addition to reexamination, a post-grant review proceeding would be available if filed within 12–months of issuance or with the patentee’s permission.
Open Examination: Anyone may submit prior art for any patent or pending application along with an explanation of why the art is important.
Tax Methods: A patent would not be available for a newly invented tax planning method. Tax planning methods do “not include the use of tax preparation software or other tools used solely to perform or model mathematical calculations or prepare tax or information returns.”
Venue and Jurisdiction: Strong limitations on venue would likely eliminate E.D.Texas as a potential choice.
Interlocutory Appeal: A district court would be given discretion to certify interlocutory appeals of claim construction decisions.
Inequitable Conduct: Inequitable conduct must be pled with specificity following FRCP Rule 9b. Inequitable conduct rules would be made explicit in the statute. Overall, this weakens the defense of inequitable conduct.
PTO Regulatory Power: The statute would give the PTO power to make the continuation rule changes that it has already implemented.
Patent Trial and Appeal Board: Following John Duffy’s Suggestion, the statute would have the board appointed by the Secretary of Commerce rather than the PTO Director.
Study of Patent Damages: The PTO will study how damage awards have changed based on the changes in the law.