Understanding the implications of the Patent Reform Act of 2007

Abstract

The Patent Reform Act of 2007 is touted as the most significant modification to the Patent Statute in the past 50 years. Its impetus, in theory, is to respond to the "broken" patent system, and its goals are to improve patent quality and the patent application process, provide alternatives to litigation for disputes regarding validity and make the U.S. patent system more consistent with patent systems throughout the world. While these are lofty and well-intentioned aspirations, current versions of the bill fail to solve most of these problems and in most instances, the provisions adversely affect other areas of patent law and the patent system itself. A version of the bill passed through the House of Representatives in 2007, and modifications to that version are currently being debated by the Senate. The provisions in the bill, which touch upon many aspects of patent law, include both obvious changes that are clear from the literal language in the proposed statutes and more subtle changes that require certain context to understand their repercussions. This article discusses some of the major highlights of the Patent Act, provides background on the legal issues and offers guidance as to how these changes may impact your company and what you can do. Those highlights include: changing priority claims from a first to invent to a first to file with the Patent Office system affecting the definition of "prior art" and "inventor;" modifications in the calculations of a damages award in patent cases when damages are based on a royalty of the infringer's profits; creating a new standard for willful infringement that may result in the possibility of enhanced damages being awarded by a court; creating a new, more complex and potentially abusive post grant review process available for the public to challenge issued patents; modifying the locations in the United States where a patent infringement action may be brought; allowing for appeals of rulings articulating the scope of a patent; requiring patent applicants to provide a prior art search report with their patent applications; and creating a new test for inequitable conduct: a breach of the duty of candor imposed on those prosecuting a patent before the Patent Office.