On July 10, 2019, H.R. 3666, the “STRONGER Patents Act of 2019,” was introduced in Congress and referred to the Committee on the Judiciary and the Committee on Energy and Commerce. The purpose of the Act is “To strengthen the position of the United States as the world’s leading innovator by amending title 35, United States Code, to protect the property rights of the inventors that grow the country’s economy.”
This bill is a reintroduction of the Stronger Patents Act of 2017 that never got out of committee. It has a long list of bi-partisan co-sponsors: Rep. Stivers (R-OH), Rep. Mr. Foster (D-IL), Rep. McClintock (R-CA), Rep. Velázquez (D-NY), Rep. Babin (R-TX), Rep. Burgess (R-TX), Rep. Hill (R-AK), Rep. Huizenga (R-MI), Rep. Joyce (R-OH), Rep. King (R-NY), Rep. Norman (R-SC), Rep. Watson Coleman (D-NJ), Rep. Suozzi (D-NY), Rep. Peters (D-CA), Rep. Gosar (R-AZ), and Rep. Davidson (R-OH).
The “Findings of Congress” in the Act make several points similar to those made in the “Findings of Congress” for H.R. 5478, the Inventor Rights Act, regarding the importance of patents as “the foundation for the exceptional innovation environment in the United States” and “an essential part of the country’s economic success.” It includes reference to the fact that “strong patent protection improves the chances of success for small companies and increases their chances of securing financing from investors.”
Of particular note, the “Findings” state that “unintended consequences of the comprehensive 2011 [America Invents Act] reform of patent laws are continuing to become evident, including the strategic filing of post-grant review proceedings to depress stock prices and extort settlements, the filing of repetitive petitions for inter partes and post-grant reviews that have the effect of harassing patent owners, and the unnecessary duplication of work by the district courts of the United States and the Patent Trial and Appeal Board;”
This “Finding” refers to the abuse of invalidating patents by the Patent Trial and Appeal Board mentioned in my blog article of February 12th about the Inventor Rights Act.
In addition, the “Findings” point out that “efforts by Congress to reform the patent system without careful scrutiny create a serious risk of making it more costly and difficult for legitimate innovators to protect their patents from infringement, thereby weakening United States companies and the United States economy.”
The Stronger Patents Act of 2019 is much more complex that the simple one-page bill for the Inventor Rights Act. Since I am not a lawyer, I do not have the legal expertise to analyze each of the specific clauses of the Act. However, I will highlight certain sections that are particularly beneficial to inventor rights and attempt to correct specific problems created by the America Invents Act of 2011.
For example, in “SEC. 102. Inter partes review,” the proposed amendments would help reduce the invalidation of patents that is now occurring in PTAB cases. The bill states:
“(A) each challenged claim of a patent, or claim proposed in a motion to amend, shall be construed as the claim would be construed under section 282(b) in an action to invalidate a patent, including by construing each such claim in accordance with—
(i) the ordinary and customary meaning of the claim as understood by a person having ordinary skill in the art to which the claimed invention pertains; and
(ii) the prosecution history pertaining to the patent; and
(B) if a court has previously construed a challenged claim of a patent or a challenged claim term in a civil action to which the patent owner was a party, the Office shall consider that claim construction.”
The “Burden of proof.—Section 316(e) of title 35, United States Code, is amended to read as follows:
(1) PRESUMPTION OF VALIDITY.—The presumption of validity under section 282(a) shall apply to a previously issued claim that is challenged during an inter partes review under this chapter.
(2) BURDEN OF PROOF.—In an inter partes review instituted under this chapter, the petitioner shall have the burden of proving a proposition of unpatentability of a previously issued claim by clear and convincing evidence.”
One of the important amendments in Sec. 103. Post Grant Review, adds the following new subsection: “(d) Persons that may petition.—
(2) NECESSARY CONDITIONS.—A person may not file with the Office a petition to institute a post-grant review of a patent unless the person, or a real party in interest or privy of the person, demonstrates—
(A) a reasonable possibility of being—
(i) sued for infringement of the patent; or
(ii) charged with infringement under the patent; or
(B) a competitive harm related to the validity of the patent.”
Two of the amendments to SEC. 104. Composition of post-grant review and inter partes review panels, amend Section 6(c) of title 35, United States Code as follows:
“(1) IN GENERAL.—Each appeal, derivation proceeding, post-grant review, and inter partes review shall be heard by at least 3 members of the Patent Trial and Appeal Board, who shall be designated by the Director.
(2) INELIGIBILITY TO HEAR REVIEW.—A member of the Patent Trial and Appeal Board who participates in the decision to institute a post-grant review or an inter partes review of a patent shall be ineligible to hear the review.”
SEC. 105. Reexamination of patents amends the process of requesting a reexamination, while SEC. 106. Restoration of patents as property rights states is amended to provide injunctive relief stating:
“(b) Injunction.—Upon a finding by a court of infringement of a patent not proven invalid or unenforceable, the court shall presume that—
(1) further infringement of the patent would cause irreparable injury; and
(2) remedies available at law are inadequate to compensate for that injury.”
One of the problems that this Act addresses is the diversion of fees paid to the USPTO. Currently funds can be diverted to fund other agencies and cover other government expenses. By this Act, SEC. 107. Elimination of USPTO fee diversion, clause regarding (a) Funding.—Section 42 of title 35, United States Code, is amended as follows:
“(1) IN GENERAL.—Fees authorized in this title or any other Act to be charged or established by the Director shall be collected by the Director and shall be available to the Director until expended to carry out the activities of the Patent and Trademark Office.”
Item “(2) ESTABLISHMENT.—There is established in the Treasury a revolving fund to be known as the ‘United States Patent and Trademark Office Innovation Promotion Fund’.”
I particularly support the addition of SEC. 109. Assisting small businesses in the U.S. patent system, which states in part:
“(b) Small Business Administration report.—Not later than 1 year after the date of the enactment of this Act, the Small Business Administration, using existing resources, shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report analyzing the impact of—
(1) patent ownership by small business concerns; and
(2) civil actions against small business concerns arising under title 35, United States Code, relating to patent infringement.
(c) Expansion of patent pilot program in certain district courts.—
(1) IN GENERAL.—Not later than 180 days after the date of the enactment of this Act, the Director of the Administrative Office of the United States Courts shall designate not fewer than 6 of the district courts of the United States that are participating in the patent cases pilot program established under section 1 of Public Law 111–349 (28 U.S.C. 137 note) for the purpose of expanding that program to address special issues raised in patent infringement suits against individuals or small business concerns.
(2) PROCEDURES FOR SMALL BUSINESSES.—Not later than 2 years after the date of the enactment of this Act, each district court designated under paragraph (1) shall develop procedures for expediting cases in which an individual or small business concern is accused of patent infringement.
While this bill addresses many of the problems caused for the America Invents Act of 2011, it does not address the most egregious provision of that Act; namely, changing our patent system from a “first to invent” to a “first to file” system. This change has done the most damage to the individual inventor or small business entity. While a provisional patent that is good for one year is relatively inexpensive, it is expensive and time consuming to pursue obtaining a non-provisional patent (3-5 years average). Individual inventors have to be extremely cautious not to reveal information on their technology to prevent others from being first to file a patent for the technology they invented.
Because of the complexity of this bill, I don’t think it has any greater chance of getting out of committee to be voted on by the whole of Congress this year than the Stronger patent Act of 2017. In fact, it may have less chance in the Democrat-controlled House with many more Republican than Democrat co-sponsors. In my opinion, I think the simple, one-page Inventor Rights Act has a much better chance of being brought to the House floor for a vote this year, and it will restore the rights of inventor to their patents.