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Amendments to the America Invents Act passed

A bill designed to solve problems in the new US patent system has been passed by Congress after being amended to remove some contentious clauses

It follows a ruling by the Federal Circuit on Thursday that affirmed parts of the America Invents Act (AIA) that prevent qui tam lawsuits being filed against false patent claims. The two developments together will change patent law in the US dramatically, attorneys say.

The bill, HR 6621, was proposed by Representative Lamar Smith and aimed to improve several provisions of the AIA. It was passed by 308-89 votes. In order for it to become law, the Senate will also have to affirm it.

Originally, the bill included a controversial provision which would have cut short the length of patents issued before the General Agreement on Tariffs and Trade (GATT). Around 200 patents issued before June 1995, when GATT came in, are still being processed by the patent office.

Pre-GATT patents have a term of 17 years from the date of issuance, regardless of how long the patent is in prosecution. Patents filed after GATT have a term of 20 years from the earliest priority filing date. The proposed legislation would have denied the 17-year-from-grant term unless the patent was issued within one year of the legislation becoming effective.

The provision was designed to close a loophole in the law which creates the potential for so-called submarine patents.

With pre-GATT applications, patent applicants can repeatedly file for continuations to keep the patent in prosecution. This prevents the patent from being made public, so that competitors are unaware of what it covers. Once a competitor launches a similar product, the patent applicant can wait for the patent to be issued and sue for infringement.

Michael Samardzija, a partner of Bracewell & Giuliani, said the provision would have effectively meant that most pre-GATT applications would be expired the moment they were issued.

The controversial provision was later replaced by a requirement that the USPTO submits a report to the Committees on the Judiciary of the United States House of Representatives and the Senate on the status of pre-GATT patents.

It passed despite objections from Representative Dana Rohrabacher, who argued that the names of patent applicants have traditionally been kept confidential and revealing the names of inventors would expose them to "attack by very powerful interests who would steal their invention."

The bill was also amended to remove a clause which would have subjected reissue patents to post-grant review.

However, Samardzija said the bill failed to address one of inventors' biggest concerns – the transition to a first-inventor-to-file system.

"It's another way for a big corporation, if it wanted to, to act like a bully and try to negotiate a licence at a rate it likes or to try to kill the patent of a smaller company that's trying to compete with it. Even if it is not successful at killing the patent, the fact that it has spent so much money on it may prevent the smaller company from competing."

Samardzija suggested that in order to add some balance, the law should be changed so that companies challenging a patent via the USPTO lose the ability to launch litigation challenges to the same patent in future.

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