Patent Law Practice Center

Architect of America Invents Act announces retirement from House

Longtime Texas Representative Lamar Smith (R-TX), chairman of the House Committee on Science, Space, & Technology, will be retiring from his duties on Capitol Hill and will not seek reelection for another term of service. Smith, a former Chairman of the House Judiciary Committee and powerful member of the Republican leadership, will leave a void. His retirement marks the end of a 30-year tenure of public service and will immediately create a leadership void on the House committee responsible for overseeing our nation’s science and space policies.

Smith was first sworn into office at the U.S. House of Representatives in 1987 and has served the 21st congressional district of Texas, which includes areas of Austin and San Antonio and parts of the Texas Hill Country, since that time. During his time in Congress, Smith has been involved with the sponsorship of legislation related to technology including the Stop Online Piracy Act (SOPA) and the STEM Education Act of 2014. Many readers of this blog will recall that Smith was an original co-sponsor to the Leahy-Smith America Invents Act (AIA) of 2011, along with Democratic Representative Patrick Leahy (D-VT). That piece of legislation created the Patent Trial and Appeal Board (PTAB), an Article I executive branch tribunal which is being challenged on constitutional grounds before the U.S. Supreme Court in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC.

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An interview with Congressman Thomas Massie

“I can tell you, every day Congress is in session, there are lobbyists here trying to weaken the patent system,” Congressman Thomas Massie explained to me when I interviewed him on June 28, 2017.

In Massie’s words, those companies that come to Capitol Hill and lobby to weaken the patent system want to get into new fields, but the problem is they didn’t invent in those fields, so they face problems. Patent problems. A lot of those companies want to become automobile manufacturers, or cell phone manufacturers, or they want to write software for operating systems, but they didn’t invent in those areas and they don’t own the patents that have historically been the touchstone of innovation ownership. “They’d love to just come in and start playing in those fields and start using their size and scale as an advantage, and to them, patents look like a hindrance,” Massie explained. “They are here in Congress looking to weaken patents and they are not just interested in weakening patents issued in the future, they are looking to weaken all patents.”

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115th Congress: Meet the Key Republicans on IP Reform

On January 3, 2017, the 115th Congress officially convened. In the Senate, it will be the Senate Judiciary Committee where any action relating to intellectual property reform will play out during the 115th Congress. In the House of Representatives, it will be the House Judiciary Committee that will be the body of primary importance insofar as any intellectual property reforms are concerned. Unlike the Senate, in the House, the front line action will take place in subcommittee, specifically the Subcommittee on Courts, Intellectual Property, and the Internet will take the lead for the full House Judiciary Committee.

Unlike in previous years, we enter 2017 without much support for a fresh round of patent reform, but at least some patent reform measures are sure to be introduced during the 115th Congress. In fact, just recently Congressman Bob Goodlatte, who is once again Chair of the House Judiciary Committee, put forth his legislative agenda which included patent litigation reform. Senator Chris Coons (D-DE) is also talking about it being time for Congress to amend 35 U.S.C. 101.

Senator Chuck Grassley (R-IA), pictured left, will once again be chair of the Senate Judiciary Committee. Grassley is a strong supporter of the development of wind, solar, biodiesel, biomass and ethanol as a sustainable, domestic, renewable energy source, which is not surprising since he comes from the heart of America’s farmland. Grassley is a pragmatic politician. In April 2014, when large entities were pushing hard for the latest round of patent reform to pass, Grassley pumped the breaks, acknowledging that there were significant differences of opinion on the need for additional reform. “Sometimes it takes more time than we’d like, but, the end result is a better product. I’m willing to sacrifice a little time to develop a bipartisan bill that we can all support.”  Grassley’s pragmatic approach slowed things down during the 113th Congress, but Grassley introduced the PATENT Act in the 114th Congress. Throughout the 114th Congress, Grassley’s staff was aggressively searching for stories about small businesses being abused by patent trolls, which he could use to give patent reform momentum. Such momentum never materialized, despite the fact that the PATENT Act was able to pass the Judiciary Committee. It is believed that Grassley remains supportive of patent reforms that most inventors would deem unacceptable. (more…)

Hulk Hogan victory over Gawker shows problems with a bond requirement

A Florida jury recently awarded $115 million to former professional wrestler turned reality TV star Hulk Hogan.  As you might expect, Gawker immediately announced they would appeal. Unfortunately for Gawker, thanks to Florida law, they could be required to post a bond of up to $50 million for the privilege of appealing this decision. Posting a bond that large, Gawker argues, would imperil their ability to defend themselves and mount an appeal. Indeed, this verdict could destroy Gawker altogether.

Without getting into the substance of the Hogan vs. Gawker lawsuit, the issue of posting bonds to appeal is quite relevant in the ongoing debate over patent reform. While the philosophy behind a bond requirement makes some sense, in practice there are serious issues with prohibiting a party from appealing a decision unless they can post a ridiculously expensive bond.

The issue of bonds has been an important matter for innovators. The bond requirement has been promoted by Senator Orrin Hatch (R-UT), for example, as a way to curb abusive patent litigation by forcing those who have lost to reasonably assure the victorious party that the losing party can cover any resulting losses to the appellee before they can appeal.  VCs, universities and others object to the bond requirement and related measures that would enable defendants to get “real parties in interest” to shift fees, arguing that the real motivation is simply to make it financially impossible to ever assert a patent in the first place.

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House Judiciary Nixes CBM Extension

On Thursday, June 11, 2015, the House Judiciary Committee held a hearing for the purpose of marking up “the Innovation Act.”

One of the issues that took up a significant amount of time during the first half of the hearing was an amendment submitted by Congressman Darrell Issa regarding a proposed extension of covered business method (“CBM”) review. Those familiar with the America Invents Act (AIA) will undoubtedly recall that CBM reviews were ushered in as one of the three new post grant proceedings that could be used to challenge issues U.S. patents. The program was conceived to be temporary, and is scheduled to sunset on September 16, 2020. Issa’s amendment would have postponed the termination date of the program until December 31, 2026.

Unlike inter partes review (“IPR”), a petition for a CBM may NOT be filed unless the real party-in-interest or privy has been sued for infringement of the patent or has been charged with infringement under that patent. “Charged with infringement” means “a real and substantial controversy regarding infringement of a covered business method patent such that the petitioner would have standing to bring a declaratory judgment action in Federal court.” 37 CFR 42.302(a). Additionally, unlike with IPR, a CBM proceeding can raise issues surrounding both patent eligibility under 35 U.S.C. 101 and sufficiency of disclosure under 35 U.S.C. 112.

Issa stated during the hearing that, at the time Congress passed the AIA, the idea was to create CBM review for a trial period and the program would be extended if successful. Issa is mistaken. The complete name of the process even has the word “transitional” in the title. The entire purpose of CBM review was to allow for challenges to certain financial business method patents in a post grant proceeding that could raise patent eligibility and sufficiency of disclosure. Those issues are off the table in IPR. They can be raised in Post Grant Review (PGR), but PGR is only available to challenge patents that were examined under the first-to-file provisions of the AIA. Thus, Congress wanted to allow for a form of PGR for financial business method patents granted under pre-AIA first-to-invent rules.  Thus, there is a time limit to the useful period of this special variety of post grant review.

“We should be ending [CBM] rather than extending it,” Congressman John Conyers (D-MI) stated in response.

Congressman Collins (R-GA) also explained that he cannot support extending CBM, saying that “a property right should be a property right.” Collins also expressed confusion regarding why this matter is pressing at the moment, saying: “I am confused as to why we are considering the extension of a program that is scheduled to sunset in 2020. Why are we debating this here today… do we really know how CBM will affect our economy… we should be having this debate in 2020.” Ultimately, Collins urged his colleagues to oppose this “premature amendment.”

Congresswoman Suzan DelBene (D-WA) echoed the comments of Collins, but also took issue with earlier comments of those in support of the amendment who said that there was no evidence that CBM has been inappropriately expanded beyond financial services patents. DelBene pointed out that there have, indeed, been instances where the Patent Trial and Appeal Board (PTAB) has been accused of expansively interpreting its own jurisdiction beyond what Congress envisioned when the AIA was passed.

The amendment to extend CBM was defeated by a vote of 18-13. At least for now, it is not in the House bill. If and when the bill gets considered on the floor of the House, extension of CBM could resurface in one way or another.