Patent Law

By Senators Patrick Leahy and Orrin Hatch, Full editorial in the Washington Times 2/15/08

“. . . For several years, modernizing the patent system has been at the front and center of our mutual legislative agenda. Meaningful patent reform is crucial to America's ability to maintain its competitive edge in the world, and now — after years of careful spadework — Congress has the chance to move forward.

The Patent Reform Act of 2007 (S.1145) is the product of years of deliberation and study within Congress and by many esteemed agencies and institutions, including dozens of hearings with the testimony of scores of witnesses, extensive and substantive mark-up sessions, and hundreds of meetings and discussions with countless stakeholders representing a sweeping array of interests in the patent system.

. . . the current law was last thoroughly updated more than 50 years ago, and much has changed since then. Think about this: The last time the patent system was significantly changed, the structure of DNA had not been discovered; gasoline was around 27 cents a gallon; and we had not yet sent a man to the moon. Our economy is no longer defined by assembly lines and brick-and-mortar production; we are living in the Information Age, and the products and processes that are being patented are changing as quickly as the times themselves. Unfortunately, Congress has neglected to modernize our patent system to keep pace with the boom in American innovation. Recent Supreme Court decisions have nudged things in the right direction, reflecting the growing sense that questionable patents are too easy to get and too hard to challenge. But the Court is constrained in its decisions by the laws on the books. It is time to dust off and refresh our patent laws.

If we are to maintain our position at the forefront of the global economy and continue to lead the world in innovation and production, we need an efficient and streamlined patent system that issues high-quality patents while limiting wheel spinning and counterproductive litigation. Our bipartisan reform bill is a solid step toward achieving these goals.

In 2003, the Federal Trade Commission reported that patents of questionable validity were inhibiting innovation and competition, harming consumers and businesses and our overall economy. The FTC further found that relying on court battles to challenge questionable patents was unduly costly and cumbersome. To address this problem, our bill would set up an administrative, post-grant review procedure. This would not only cut down on legal costs for the patent holder and the patent challenger, but it would also leave the issue to those best equipped to review patents — the experts at the U.S. Patent and Trademark Office.

We must also restore fairness to the rules that govern how courts determine damages when a patent is infringed. The threat of excessive damages is ruthlessly curtailing progress, and the loss of jobs and innovation is directly linked to litigation costs. . . .The goal of our reforms is to ensure that patent holders will be able to obtain appropriate compensation in case of infringement.

Under today's rules … [p]laintiffs can "forum shop," filing their lawsuits in jurisdictions that have virtually no relevance to the underlying case, but everything to do with where the plaintiff stands the best chance of winning the case. Our bill would prevent this gaming of the system....

Another provision to clarify and limit use of the so-called inequitable conduct defense would also bring balance to the patent system. …

…

As legislators, we know we are headed in the right direction when everyone is complaining that the entire bill is not going their way. We see this as a necessary, albeit somewhat difficult, part of the legislative process. But we welcome it. But at the end of day, we are confident that we will resolve the remaining issues in ways that should make everyone comfortable and will ensure final passage.

The Senate has a tremendous and historic opportunity — and a constitutional responsibility — to further strengthen our nation's competitiveness through meaningful patent reform. Now is the time.