Lapas attēli

or other Members may wish to explore that will necessitate a legislative response from Čongress.

The purpose of the hearing is to initiate dialogue on the merits of six issues of interest, both to me and the Ranking Member, Howard Berman. The suggested reforms touch upon the PTO reexamination system, patent litigation practice, and the responsibilities of an applicant in submitting information to assist in the search and examination activities.

I want to emphasize that in regard to PTO reform all roads must lead to enhanced and patent and trademark quality. Reducing pendency and backlogs are important goals in their own right, but must never supersede the importance of improving the integrity of the patents issued.

Patents of dubious quality only invite legal challenges that divert money and other resources from more productive purposes, purposes such as raising venture capital, commercializing inventions and creating jobs.

Today's hearing will not end our discussion of how the Subcommittee can help PTO become more efficient and productive. I hope to visit other areas of the law that may contribute to patent quality improvement later in this term of Congress.

The Ranking Member from California, Mr. Berman, is recognized for his opening statement.

Mr. BERMAN. Thank you very much, Mr. Chairman, and I appreciate your holding this oversight hearing to explore ways to improve patent quality. The issue of patent quality is not a new one here for our Subcommittee, and while it is a familiar issue, it does remain elusive. There are many factors which potentially affect the quality of a patent as an application makes its way through the examination process.

Having identified several points at which patent quality is most vulnerable today, we would hope to move forward and together develop appropriate solutions. As I understand it, today's oversight hearing will focus on six possible initiatives, four of which are relevant during the examination of the application and have a direct and potentially significant effect on patent quality, two of which are relevant at a time after a patent has issued and a controversy arises regarding infringement and validity of that patent.

These last two initiatives deal more directly with balancing the equities of the parties when a controversy arises. The quality of a patent is synonymous with the value of that patent, and patent quality is dependent on the extent to which an invention has been certified to be useful, novel and nonobvious when compared to the existing state of the art.

A poor quality patent, on the other hand, is typically invalid and may have far-reaching and negative ramifications for the individuals involved, as well as for the economy at large. Today's initiatives contemplate improving patent quality by increasing the responsibility of the applicant and engaging the participation of the public during the examination process in order to develop a more complete record of prior art.

The first initiative contemplates allowing third parties to present to the examiner materials for consideration during the examination process. On the one hand, allowing third party submission will generate more prior art to be presented to the examiner, and therefore will strengthen the presumption of validity. Some argue, however, that any limited benefit is far outweighed by the burdens incurred by the applicant and by the PTO.

Additional concerns such as whether one competitor might strategically submit materials to delay another's patent from issuing, and whether a third party should have the opportunity to attach his own commentary explaining the relevance of the submission, or should that be left to the examiner to deduce.

The next initiative concerns the requirements of a patent application with regard to prior art submission. Currently an applicant is under no obligation to conduct a search of the pertinent literature to determine whether his invention is already within the public domain. However, if he conducts such a search, he is required to submit the results of that search to the office.

It has been suggested that an applicant should be required to conduct a search before the application is presented in order to eliminate many of the obviously nonpatentable applications from being filed. But questions have been raised regarding how the scope of the search should be defined and whether this would generate a tremendous amount of litigation.

Other concerns center around the applicant's increased financial burden, and the increased vulnerability to validity attacks for narrow searches and unintentional omissions.

The third and fourth issues we are looking at today involve the inter partes reexamine, which is essentially a second analysis of the patentability of an invention in which a third party may participate.

One proposal is to remove the provision preventing a party from raising on appeal any issue that could have been raised earlier. That provision seems to have the effect of keeping people from using the reexamination process and removing that provision would conversely encourage people to use that process as an alternative to litigation.

There are other—there is another proposal to include section 112 issues among those which can be raised during this inter partes reexamination.

The final initiatives concern the equities of the parties when judicial relief is requested for the patent infringement. Currently a patent holder may request injunctive relief if he alleges that his patent rights are being violated. A potential infringer may institute a declaratory action that the patent is invalid when there a reasonable apprehension of litigation.

Further, an infringer will be responsible for three times the amount of plaintiff's actual damages beginning at the time notice is given of the infringement. Equity dictates that the precise moment each of those events attains legal significance should be the same. In other words, the moment at which an alleged infringer has a reasonable apprehension of suit should be the same moment an allegation of infringement is made, which should coincide with a party's receipt of notice such to incur liability for treble damages.

Today we will explore the best and most appropriate ways to realign these interests. Taking action on those important initiatives is not the magic bullet that will cure the PTO of all that ails it. There are many additional areas, unity of invention, internal harmonization, and the unique concerns of industries, such as the biotech and financial services industries to name a few.

And we shouldn't forget our commitment to follow through with the antidiversion measure, which we, through bipartisan support, voted out of full Committee favorably. I encourage all people interested in that to get active in anticipation of the bill reaching the House floor after the recess.

Time and again we see that innovation is key to the future health of our economy. Patent quality is key to continued innovation, and I think our Subcommittee remains dedicated to achieving this goal.

Mr. Chairman, thank you for your willingness to schedule this hearing, and I should point out that Mr. Boucher, who has been instrumental in investigating, developing these concepts from the beginning, also has a high interest in figuring out ways to improve patent quality.

Mr. SMITH. Thank you, Mr. Berman.

Our first witness is Charles Van Horn, a partner at Finnegan, Henderson, Farabow, Garrett & Dunner. Mr. Van Horn joined the firm after a 31-year career in the U.S. Patent and Trademark Office. Mr. Van Horn received his B.S. From Lehigh University, his JD from the Washington College of Law, and his MBA from Lehigh University.

Our next witness is Mark Kesslen, the Managing Director and Associate General Counsel at J.P. Morgan Chase and Company. He is a registered patent attorney who also serves as the cochair of the BITS Patent Issues Working Group, an organization that develops and evaluates patent policies for the financial services industry. Mr. Kesslen graduated from Tufts University with a Bachelor of Science Degree in electrical engineering. He received his law degree from the Case Western Reserve University School of Law.

Our next witness is David Simon, who is Chief Patent Counsel at Intel Corporation. Mr. Simon manages all patent generation and analysis for Intel. He directly supervises 80 employees and is responsible for filing numerous patent applications on behalf of the corporations.

Mr. Simon received undergraduate degrees in electrical engineering and political science from MIT, and his JD from the Georgetown University Law Center.

Our final witness is John Thomas, Professor of Law at the Georgetown Law Center, where he specializes in intellectual property licensing, international intellectual property law and patents. Professor Thomas has served as an instructor at the U.S. PTO Patent Academy since 1997 and is a visiting scholar with the Congressional Research Service since December 1999.

Professor Thomas holds a BS in computer engineering from Carnegie Mellon and a JD from the Michigan School of Law and an LLM from George Washington University. Welcome to you all. We have your complete statements, and without objection they will be made a part of the record. And just a reminder, we hope you will keep your statements to 5 minutes.

And we will proceed. Mr. Van Horn, we will begin with you.

Thank you.



Mr. VAN HORN. Thank you, Mr. Chairman. I am pleased to have the opportunity to present the views of the American Intellectual Property Law Association on patent quality improvement. AIPLA welcomes the Subcommittee's efforts to explore ways to improve patent quality.

Today's hearing focuses on six possible initiatives to enhance patent quality. Although we do not embrace all of the concepts presented in the draft bill, we do appreciate the Subcommittee's efforts to improve the patent system and the opportunity to engage in this dialogue.

First, we are sympathetic to the motivation underlying the proposal to permit any party to submit prior art during the examination process for consideration by a patent examiner. However, the limited benefits of permitting these pre-grant submissions of prior art, we believe, are far outweighed by the problems it could create for applicants and the burdens it would place on the PTO. In addition to the additional workload and complications that it would create for an already overloaded examining staff, it is not difficult to imagine strategies that would unfairly delay the grant of the patent, and possibly even unjustly extend the patent term because of delays in the PTO.

Second, we do not believe that a mandatory preliminary search requirement would guarantee information that is appreciably better or more complete than is presently available through examiner searches, coupled with the requirements of rule 56. In addition to failing to provide any guidance regarding the scope of such a search that will be made in each application, a very troubling aspect of this proposal is its significant potential to increase the costs of enforcing a patent.

Third, the draft legislation would amend the current law regarding inter partes reexamination procedures to remove an estoppel provision, and would expand the grounds upon which an assertion of invalidity could be made to include any requirement under section 112 of title 35.

We believe that the current estoppel provision provides an appropriate balance between the interests of the public and the interests of the patentees. The proposal to expand the grounds for reexamination to include any requirement under section 112 we believe goes too far. We do not support including the best mode requirement of section 112, because of the analytical difficulties this issue presents and the relative inexperience of the PTO examining staff in addressing this issue.

Finally, the remaining paragraphs of section 112 deal primarily with the form of the claim and claim construction principles that do not constitute, in our judgment, an appropriate basis for challenge in an inter partes reexamination proceeding.

Fourth, another provision of the draft legislation would add five specific factors that a court should consider in determining whether to grant a preliminary injunction against the person marketing a product alleged to infringe a patent. AIPLA believes that given the well developed judicial doctrines regarding the equitable factors, a court should and does take into account in determining whether to grant a preliminary injunction, amending the current statute to include these five factors is unnecessary at best, and could be detrimental to the proper functioning of the patent system.

Finally, AIPLA is concerned that the declaratory relief proposal could have an unsettling effect in the law in relation to patents. We see no justification to modify the current law regarding when declaratory action judgment actions can be brought, especially where the proposed modifications may make it more difficult to bring such actions. On the other hand, we do believe some useful changes can be made in the present state of the law regarding willful infringement.

AIPLA is concerned about the disruptive effect that claims of willful infringement can have on the functioning of the patent system. They not only add unnecessarily to the costs of litigation, but provide a drag on innovation as companies are wary to improve upon or invent around patented inventions for fear of being subjected to claims of willful infringement and the possibility of treble damages.

AIPLA is working with our sister organizations to address changes we believe are needed in this area, and hopes to be able to share our ideas with the Subcommittee in the very near future. This Subcommittee has made a very excellent start to enhance patent quality by proposing legislation that would fully fund the PTO, and we will do everything in our power to support this initiative and others that are likely to enhance patent quality.

Thank you, Mr. Chairman.
[The prepared statement of Mr. Van Horn follows:)

Mr. Chairman:

I am pleased to have the opportunity to present the views of the American Intellectual Property Law Association (AIPLA) on “Patent Quality Improvement.” AIPLA welcomes the Subcommittee's efforts to explore ways to improve patent quality, goal number one.

AIPLA is a national bar association of more than 14,000 members engaged in private and corporate practice, in government service, and in the academic community. AIPLA represents a wide and diverse spectrum of individuals, companies and institutions involved directly or indirectly in the practice of patent, trademark, copy, right, and unfair competition law, as well as other fields of law affecting intellectual property. Our members represent both owners and users of intellectual property.

BACKGROUND At the Oversight Hearing which the Subcommittee held on April 11, 2002 on “The U.S. Patent and Trademark Office: Operations and Fiscal Year 2003 Budget,” AIPLA testified that achieving a strong and effective Patent and Trademark Office would require focusing on three critical objectives: quality, timeliness and improved electronic filing and processing capabilities. These objectives were stated in H.R. 2047, the “Patent and Trademark Office Authorization Act of 2002.” This legislation calls for the Director to develop a five-year strategic plan that would

“(1) enhance patent and trademark quality; (2) reduce patent and trademark pendency; and (3) develop and implement an effective electronic system for use by the Patent

and Trademark Office and the public for all aspects of the patent and

trademark processes. . It is not by accident that AIPLA and other user organizations list quality as the first objective. Quality of the patents granted by the USPTO must be at the fore

« iepriekšējāTurpināt »