The Patent Reform Act of 2007 has been awaiting a vote on the floor of the Senate for sometime now. Public interest groups have been hoping there will be a vote sometime this fall. The House passed a similar version of the bill on September 7th of this year. There has been too much discussion and deliberation about patent reform for this bill not to come to the Senate floor. The FTC came out with its recommendations for patent reform in 2003 and the National Academies came out with their report in 2004. Many provisions of this Patent Reform bill and its previous iteration are based on recommendations in these reports.
When the bill is considered for a vote, public interest groups only hope that some of its reform provisions don’t get watered down in effectiveness. As it stands a few key provisions in the Senate bill are more pro-reform than the House bill.
The apportionment of damages provision of the Senate bill for one is definitely better than the House bill. In a previous post, I discussed the importance of apportioning damages in patent infringement lawsuits, so that damages reflect the value of the patent infringed and are not grossly excessive. While the House bill does contain a provision for apportionment, it would place a burden on the defendant to prove the need for apportionment. In contrast, the Senate bill treats apportionment as a default. A court would have to apportion damages if the patent owner failed to prove that his patent was the predominant reason for the market demand of the infringing product. For apportionment of damages to be effective, apportionment should be the threshold determination.
The post-grant review provision of the Senate bill would provide a greater chance to weed out bad patents than the provision in the House bill. The House bill would limit the time within which an issued patent can be challenged to one year from the date of the issue. The Senate bill would allow review even after this first year if the patent holder threatened to sue or if the patent caused significant economic harm to a competitor. Prof. Mark Lemely of Stanford Law School notes that the economic value of many patents cannot be ascertained within the first year of the grant. Thus, they are neither likely to be asserted within the first year nor are competitors likely to know if a patent will harm them economically. Therefore, to be effective, a post-grant review period should not be limited to the first year after a patent is issued.
When the Senate considers the Patent Reform Act, we hope that these provisions do not get watered down.