Senator Coons throws “legislative grenade” at PTAB proceedings
The introduction of the STRONG Act suggests getting any patent reform passed in the US this year will be very tricky. The bill also proposes radical and worrying reforms of the PTAB
The STRONG Act – or to give its full title, the Support Technology and Research for Our Nation’s Growth Patents Act – introduced by Senator Chris Coons (right) this week has quickly divided observers.
Pro-patent organisations including the BIO and the Association of American Universities praised the bill. But those that have long advocated broad reform were dismayed.
For example, criticism was quick to come from United for Patent Reform (“provisions of the legislation will actually worsen the current inequities in the patent litigation system that allows patent trolls to thrive and victimize American businesses large and small”) and the Consumer Electronics Association (“appears less like real patent reform and more like a patent troll-led effort to draft a ‘fig-leaf’ bill for senators to sign on to so they can pretend they are supporting patent reform, while shielding the legalized extortion of the patent trolls”).
Perhaps more importantly, the introduction of the STRONG Act suggests it will be no easy task to get reform passed this year.
Oblon’s Scott McKeown noted on the PatentsPostGrant blog that Hill chatter had suggested the House support of the Goodlatte bill had dwindled since it was passed in 2013. He said the introduction of the STRONG Act suggested an even greater threat to further patent reform being passed this year.
“Well, if you expected the Goodlatte Bill to sail through the House for swift passage through the Senate, forget about it,” McKeown said in a blog post.
The response has been swift and damning among those advocating sweeping patent reform. Not only is this bill not what they want, it is the opposite of what they want.
The STRONG Act proposes clamping down on demand letters. The goal of this is hard to argue with whatever side of the debate on which you stand, although those advocating for broader reform would not want to settle for just this. The bill also removes the fee shifting provision in the Goodlatte Bill, and key part of the bill for reform supporters. This is a much bigger bone of contention. These two areas are common talking points on proposed patent reform.
Taking aim at the PTAB
More out of leftfield, however, the STRONG Act also proposes a radical overhaul of Patent Trial and Appeal Board (PTAB) proceedings.
McKeown noted: “More importantly, the Senate Bill adds a multitude of proposed changes to AIA trial proceedings that will have patent abusers dancing in the streets – the Bill is more aptly titled the ‘Support Trolls & Reverse Our Nation's Progress under the AIA Act of 2015’.”
He added: “While this legislative grenade may not have much chance ever seeing the light of day, it is surprising that such misguided proposals would be seriously offered in the first instance.”
Among the PTAB changes, the bill appears to propose that the first amendment be granted as a matter of right.
It would eliminate the broadest reasonable interpretation standard for claim construction. A Philips claim construction would be applied in AIA trials along with a presumption of validity to issued claims, and a clear and convincing evidentiary standard for unpatentability.
“That is, the PTAB will be applying two separate standards of patentability at the same time,” said McKeown. “Yes, you heard me right. Philips construction, presumption of validity, clear and convincing evidence. Sound familiar?”
In addition, preliminary responses are proposed to include evidence, with the petitioner able to respond with a reply. This would increase the burden on the already-stretched Board. To make matters even worse, the bill also mandates different panels be used for the institution determination and the actual trial.
“Lastly, and this is my favorite, if a reissue or reexamination is pending (where none of the heightened standards above would apply), there can be no IPR/PGR,” said McKeown. “So, if you are a patent troll, you simply file a Tanaka reissue before every licensing campaign. For the cost of a few thousand dollars a year you can effectively keep your patent out of the PTAB. What's not to like about that type of legislative forethought?”
McKeown said the bill is basically the entire patent trolls’ wishlist. “These proposals would eviscerate 2+ years of progress under the AIA,” he said. He noted that the proposals come at a time when the PTAB is likely to make some amendments to its practices anyway.
Others are worried about the bill’s effect on the PTAB as well. The Electronic Frontier Foundation (EFF) objected to the bill barring groups like itself from challenging patents at the PTAB, labelling it a “prime example of weak reform”.
The bill states patents can only be challenged by companies that have been sued or “charged with infringement”.
“The ability for public interest groups like us to do so is critical – patent owners could otherwise craft their demands to make it less worthwhile or feasible for any one accused party to challenge a patent,” said the EFF in a blog post. “Affected individuals – podcasters, for example – simply don't have the resources to dispute the patents themselves.”
Not everyone was unhappy at the suggested PTAB changes, however. Pro-patent group the Innovation Alliance said the bill would “maintain the low-cost and expeditious nature of post-grant proceedings at the US Patent and Trademark Office (USPTO)”. The Alliance’s members include Dolby, InterDigital and Qualcomm.
The STRONG Act pulls off the impressive feat of scaring some of those who are opposed to the Goodlatte bill.
McKeown summed up: “There is much wrong with the over-reaching of the Goodlatte Bill. But, if the Senate is trying to prove that it can come up with the most ill conceived ideas....game, set and match!”