Patent Law Reform: The Heat Is On
Reported by: Andrew Cohn, Wisconsin Alumni Research Foundation
and Michael Remington, Drinker Biddle & Reath LLP

Rewriting patent law has been on the legislative front burner of the 109th Congress (2005-2006). A bill introduced by Rep. Lamar Smith, R-Texas, (with co-sponsors who are all members of the House Judiciary Committee), H.R. 2795, the Patent Reform Act of 2005 been called the most sweeping patent law reform in the last fifty years.

Patent law reform was the subject of three days of hearings by the House Judiciary Subcommittee on Courts, the Internet and Intellectual Property, and three Senate Judiciary Subcommittee hearings Carl Gulbrandsen, Ph.D., representing the Wisconsin Alumni Research Foundation, testified at House and Senate hearings on June 9, 2005 and Charles Phelps, Ph.D., provost at the University of Rochester, representing four university associations (Association of American Universities, American Council on Education, Association of American Medical Colleges, and Council on Governmental Relations) testified at a Senate hearing on July 26, 2005. Previously, Richard Levin, Ph.D., president of Yale University, testified before the House and Senate on behalf of the National Research Council of the National Academies.

In their testimonies, Gulbrandsen and Phelps raised similar concerns about the following issues:

First Inventor to File
A first-to-file system was supported, but there were specific changes requested to accommodate university interests. Those proposed changes included:

• The continued opportunity to file provisional applications
• The 12-month grace period after publishing articles containing a disclosure of the invention during which a patent application could be filed without the publication becoming a bar to filing
• The provision of the current law requiring an applicant to sign an oath or declaration that he or she is an inventor of the claimed invention

CREATE Act
The provisions of the CREATE Act passed last year to foster university collaborations should remain unchanged.

Continuation Practice
The university representatives opposed limitations on the filing of continuation applications, because such changes would negatively impact the ability of universities to obtain patents, especially in the life sciences

Injunctions
Limits to injunctions would curtail the efforts of university start-up companies to secure funding and develop innovative products, because larger companies will have less incentive to respect the patent rights of such companies. Consequently, investors will have less incentive to fund start-ups.

18-Month Publication
Including all patents in the requirement for publication at 18 months is consistent with the academic mission of full disclosure and providing public access to information as soon as possible.

Prior User Rights
Prior user rights reward secrecy, encourage abuse, delay and uncertainty. They could cause patent holders additional litigation expense and perhaps forfeiture of exclusive rights and have been likened to compulsory licensing. The broad expansion of prior user rights detailed in this legislation to even include substantial preparation for use could do grave damage to university technology transfer efforts and severely impact the incentive to invest in research and development.

Subsequent Activities
In late July, Rep. Smith released an amendment in the nature of a substitute to H.R. 2795. Reaction to the Amendment by the biotechnology and pharmaceutical industries included expressed encouragement about the Amendment, while the information technology and financial services industries stated disappointment. A spokesman for Smith stressed that this latest draft is still subject to change and may also be considered at a hearing in September. [This means that it is early in the legislative process, and government relations staff still have an opportunity to express whether the Amendment should be supported or opposed.]

The Patent Reform Act of 2005 is emphasizing major differences in the positions of the computer hardware, software and financial services industries as compared with the biotechnology and pharmaceutical industries as well as independent inventors and many universities. According to news reports, the latest version of the bill does not satisfy the computer or financial services industry, so they are expected to push for changes to some of the provisions listed above, especially those designed to curb litigation abuses.

At this time, even with the Amendment, nothing in this bill that provides the U.S. Patent and Trademark Office with the resources that will be necessary to provide the additional services contained in the legislation, let alone reduce the time of pendency or improve the quality of examination. The Congress may, nonetheless, process separate legislation to ensure that the USPTO is well-funded.

H.R. 2795 will have an impact on academic technology transfer efforts to move university inventions from the laboratory bench to the marketplace.