Reforms That Codify, Promote Progress, and are Useful.

A lot of ink went for naught in analysis of the Leahy-Hatch 2007 patent reform bill.  Now though, a House version has moved to the floor for vote.  Patent litigators should favor Sections 10 and 11 in the “Amendment in the Nature of a Substitute to H.R. 1908” put forth by Hon. Messrs. Berman, Smith, Conyers and Coble.

Section 10 permits, but does not grant a right to, an interlocutory appeal of claim construction rulings.  The Leahy bill stayed the case upon the filing of these appeals.  The Berman bill grants the district judge “discretion whether to approve” the appeal request, and “if so, to stay proceedings” during the interlocutory appeal.  This revision, IMO, accords control properly to the district judges, rather than forcing an appeal and a stay after every Markman ruling.  Too often, patent reform proposals try to divest the district judges of control, and push everything back to the patent office or up to the CAFC.

Section 11 in the Berman bill adds back in a provision on inequitable conduct that I have been pushing for since 2004. (note to link below).  It codifies the essential aspects of the defense, rather than leave it all to any one court’s efforts to divine all that represents CAFC panels’ decisions on materiality, intent, balancing, and exceptions thereto.  The Leahy bill had no provision on inequitable conduct. 

The Berman bill codifies that the defense (1) must be pleaded with particularity, and (2) proven by clear and convincing evidence.  It defines the two elements of proof, a “material” omission or submission, and intent to deceive.  Materiality is that which a “reasonable patent examiner would consider important in deciding whether to allow” the application.  That excludes technical omissions like an inventor’s address or mistakes about small entity status.  Information that is “cumulative to information already in the record” is outside the definition of material information. 

One excellent aspect of the intent definition is that the proof must be evidence “beyond materiality of the information” omitted or submitted.  This prevents the defense from collapsing into the one issue of materiality.  Further, the proofs must evince “conscious or deliberate behavior” and that keeps a negligence case from being twisted into an intentional wrong.  These definitions, by the lack of mention, hopefully take away the “balancing” test created by the CAFC, along with the “discretion” to invalidate aspect.  The Berman bill recognizes that patents related to one “found enforceable …may also be held to be unenforceable.”  Again, this puts the proper authority with a district court, which “may” extend the determination of unenforceability to related applications.  Other proposals were wide of the mark, either limiting unenforceability to only one or more claims, or requiring that all patents in the family be deemed unenforceable.

It had been hoped that a patent reform bill would “define the contours” of the defense, and provide a “blueprint for district judges” so that inequitable conduct was handled uniformly by our courts.   That hope for codification, as expressed in my comments at an FTC Town Hall (link below, at pgs. 102 – 105), never got much traction until this amended H.R. 1908.  Finally.