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Patent Reform Bill Passes Senate – What Will Come To Pass?

Late on March 8th, the Senate almost unanimously passed S. 23, which was only introduced in January. (A copy of the bill is available at the end of this post.) I last commented on the features of this bill in a January 20th post, and since then, other commentators have raised specific issues that the Senators and organizations lobbying for passage do not appear to have considered in depth. With most of the litigation-oriented sections gone – due to recent or impending court decisions on the various points of law like damages, venue and willfulness – the primary features of the bill are designed to make it more difficult to obtain patents. Not only will patent applications be subject to third party submissions of prior art, but there will be a nine-month period for opposition following issuance, streamlined inter partes examination and a “supplemental examination process” to help applicants fix flawed patents.

Commentators have pointed to serious flaws in the first-to-file system. Inventors may receive a grace period for disclosures they originate, but, when earlier-filed  third party applications publish,  they will be applied against the later-filed claims using an obviousness standard, not the “novelty-only” standard applied in most other countries. And we prosecutors are learning that, post-KSR, the bar to leap to establish unobviousness is very high.

Commentators have also raised important questions about the nearly unlimited power of the Commissioner to set fees, but he is going to need it to provide the resources to implement all these new programs. Charging $4000 to accelerate examination – or a surcharge to delay it –  is not going to pay for the person power needed to power the PTO through these days of change. This is particularly true when the Office is attempting to accelerate the prosecution of applications in specific areas such as “green technology,” figuring out how to drive on the “prosecution highway”  and opening branch offices. (If you think that branch offices increase efficiency, ask departing Howrey partners).

There is almost certainly going to be more pressure on Examiners to dispose of applications by allowance, abandonment or appeal but doing the work necessary to get to allowance in two actions will require Examiners (and applicants) to do more work in the short-term, not less. Examiners compress restriction, permit – and encourage – more interviews, and encourage after-final amendments. In short, they should start discouraging the current practice of “a little less conversation and a little more action(s)” to paraphrase Elvis.

Perhaps the most important step the Office could take to discourage the flood of RCE’s it is drowning in, would be to re-define the power of the QAS’s (the old prosecution specialists) so they can require Examiners to allow claims, and to increase their numbers. Also, the pre-appeal conference was a good idea in principle, but the panels typically re-affirm the rejections or require the Examiner to re-open prosecution, simply prolonging the delays and costs. A modest proposal would be to permit the applicant’s attorney to be present and to be given some time for oral argument. This would cost the office nothing, and would almost certainly increase the allowance rate, or at least, increase the efficiency of further prosecution.

Now it’s on to the House of Representatives. Passage is far from certain, but perhaps it is not too late for “Change We Can Believe In!”

S 23

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