Us Legal Updates

Intellectual Property Law- Patents - 2007 Reform Act

Introduction

The 2007 Patent Reform Act (“the Act”) is likely to herald a fundamental shift in the US patent regime. In April of 2007, the Act was introduced in both houses of Congress. If passed, the legislation will dramatically change how patents are obtained, enforced and challenged under US law. Important aspects of the Act include:

§        Changing the patent system to first-to-file

§        Restricting districts in which parties can file patent infringement suits

§        The creation of a post-grant review procedure which allows parties to challenge the validity of issued patents.

First-to-file patent system

The proposed act will change US patent law from a first-to-invent to a first-to-file system. It is interesting to note that the US is currently the only country in the world operating under a first-to-invent system. The current system gives priority to the application claiming the earliest invention date. The new legislation brings the US in line with nearly every other foreign country by requiring inventors to file patents early and more often in order to obtain patent protection.

Venue Restraints

Prior to the Act, parties claiming for infringement of their patents had a number of choices of venue in which to bring their claims. In 1988, Congress amended the general venue rule to hold that the circuit courts of the United States shall have jurisdiction for the infringement of patent rights in any district in which the defendant, whether a person, partnership or corporation, shall have personal jurisdiction.

It should be noted that personal jurisdiction in the United States is either specific or general. A defendant is subject to general jurisdiction of the forum State when they have continuous and systematic contact with that State. A defendant is subject to specific jurisdiction when they have had minimal but purposeful contact with the forum State as to reasonably expect to be summoned to court as a result of those contacts.

Here, a single sale of an infringing product within the forum State will justify bringing a defendant to court. Therefore, having a website which allows customers to purchase infringing products online may justify jurisdiction within every State. The fact that this choice existed meant that parties claiming for patent infringement could look at a number of different forum States in which they could bring their claim. They would then select the most advantageous. The Act seeks to remedy the free market for patent filings. The amendment states that venue would only be available where the defendant’s principal place of business is located or in the state of incorporation. Accordingly, the claimant’s choice of venue would be restricted.

Post-Grant Review Procedure

The Act also proposes a way in which the validity of newly issued patents can be challenged. The post-grant review proceeding allows anyone to challenge a patent within twelve months of it being issued. The challenger must outline in writing the basis on which the challenge is being brought and include any relevant supporting evidence (For example: Prior art). If sufficient evidence can be shown, the Patent and Trademark Office will initiate the post-grant proceeding. The patent owner has a chance to respond to the cancellation petition through affidavits and declarations. This proceeding is intended to provide a faster, more cost effective method of challenging patents, rather than resorting to litigation.

Conclusion

The Act, in the event it is passed, will pose many new changes for persons seeking and contesting patents. It will however require timely filing, careful selection when initiating infringement suits, and meticulous drafting of patent claims to overcome challenges to patents validity.

Patent Reform Act of 2007, H.R. 1908, 110th Cong. (2007), available at http://www.rules.house.gov/110/text/110_hr1908.pdf

For further information please contact: k.gilbert@rtcoopers.com

© RT COOPERS, 2008. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.

 

 

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