Counsel to Counsel - January 2008 - (Page 31) “People who have patents don’t like this provision because there’s a good chance if you apportion damages, you’ve made it cheaper to infringe rather than obtain a license,” says Comtois. “You want your corporate representative at the congressional hearings, not waiting on the sidelines.” 4. The Standard for Willful Infringement A defendant in a patent infringement case has a duty of due care to determine whether he is infringing as per the existing framework. If the infringer is found to have willfully infringed the patent, a trial court may increase damages up to three times the amount found or assessed. It can also award attorneys’ fees. The Senate bill sets a higher standard for willful infringement and enhanced damages. It would require a showing of objective recklessness. “Under this provision, it will be harder to win treble damages,” says Gould. 2. Submission of Relevant Documents During Prosecution Now the patent applicant has a duty of candor to disclose to the examiner any “prior art,” relevant knowledge that has occurred prior to the invention. The proposed legislation allows third parties to offer information to the patent examiner, such as patents and published applications. “With more information, the hope is that the examiners will make better decisions,” says Comtois. Yet the provision could lead to further delays in granting patents. Every year, the patent office receives over 460,000 patent applications, far more than its staff can handle. The software industry feels the effects of this backlog more than others. “By the time a patent is granted, the patented innovation usually has been surpassed,” says Gould. “As a result, the opportunity to get a return on the investment is greatly reduced.” On the other hand, says Gould, this provision could deter patent trolls. “If you’re a victim of a troll, you could go to the patent office under this provision and show why the patent shouldn’t be granted.” more.” While the Senate bill has a recently added provision that would stop the redirection of PTO funds, it is controversial. “It’s contentious, but only among lawmakers. Everyone who pays the fees thinks the revenue should stay with the PTO.” While there are significant differences between the House and Senate bills, and it will take a while to reconcile the two, now is the time to act. “This is an ideal time to meet with your senators and congressional representatives,” says Gould. “You want your corporate representative at the congressional hearings, not waiting on the sidelines.” 5. First-to-File System This provision for awarding patents would put the United States in sync with the rest of the world. Most other countries have a first-to-file system: Whoever files first wins. Existing U.S. patent law is unique: When two patent applications are filed for the same invention by different inventors, the first to invent is awarded the patent. While the first-to-file system is simpler, Gould cautions, “this provision favors the larger corporations that have patent departments that file applications quickly.” Duane Morris’ Intellectual Property attorneys assist clients in leveraging their IP rights in the marketplace and managing their IP portfolios. These attorneys prepare and file U.S. patent applications in all subject matters and disciplines, and render validity and infringement opinions. Additionally, they secure and maintain patent protection globally as well as vigorously litigate patent, trademark, copyright and trade secret. Article Participants: Lewis F. Gould Jr. Of Counsel LFGould@duanemorris.com Peer Review Rated Mark Charles Comtois Partner MCComtois@duanemorris.com 3. Post-Grant Review Both bills propose a new post-patent grant review process. A third party would be allowed to challenge a patent within a year of the issuance or whenever a third party feels it has a risk of substantial harm due to a threat of an assertion of patent infringement. “This provision creates a lot of uncertainty for the patent holder,” says Comtois. “Clients want certainty, not a system that changes year after year.” Now Is the Time to Act What’s not being seriously considered in either bill is an increase in the patent office’s budget. Gould finds that surprising. “The patent office charges fees for everything it does,” he says. “It collects significant revenue, yet much of it goes to the general fund. That money should stay with the PTO to hire more examiners and pay them martindale.com/c2c JANUARY 2008 31 http://www.martindale.com/c2c
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