The Senate Introduces Pro-Patentee Legislation with the STRONG Patents Act

On March 3, 2015, Senators Chris Coons (D-DE), Dick Durbin (D-IL) and Mazie Hirono (D-HI) submitted The Support Technology and Research for Our Nations Growth Patents Act (“STRONG Patents Act”). As Senator Coons recently said, “[the STRONG Patents Act] would make it harder for firms to be targeted with frivolous patent lawsuits, level the playing field between small inventors and large companies, and ensure the U.S. Patent and Trademark Office has the resources it needs to ensure patent quality.”

With the aim of strengthening the patent system while simultaneously combatting abuse, the Strong Patents Act has garnered support from a number of major organizations and large research university groups, including the Association of American Universities, the Association of Public and Land-grant universities, the Innovation Alliance, and the Biotechnology Industry Organization (BIO).

The STRONG Patents Act appears to be a stark deviation from the Innovation Act recently brought forward by Congressman Rob Goodlatte (R-VA). Rather than making patent litigation more burdensome for plaintiffs as the Innovation Act proposes, the STRONG Patents act appears to overwhelmingly support the interests of innovators and patent owners. Discussed below are some of the main provisions and reforms introduced by the act.

Pleading Standards in Post Grant Administrative Proceedings:

If the STRONG patents act passes, patent claims challenged in post grant administrative proceedings would be presumed valid. As such, the burden would be on the challenger to prove the claims invalid by clear and convincing evidence. Further, the Patent Trial and Appeal Board (“PTAB”) would no longer interpret claims based on the broadest reasonable interpretation. Instead, the PTAB would construe the claims under the “ordinary and customary meaning” as they would in litigation in Federal District. Since claims would no longer be given the broadest reasonable interpretation, the changes in pleading standards make it more difficult for the PTAB to invalidate patent claims.

Fraudulent and/or Misleading Demand Letters:

The STRONG patents act also grants the Federal Trade Commission (“FTC”) permission to go after those would send communications in bad faith, focusing on firms that abuse startups rather than inventing anything themselves. Under these provisions, those accused of sending communications in bad faith would no longer be able to rely on omissions or mistakes made in good faith as an affirmative defense. Further, the FTC would be authorized to enforce a maximum penalty of 5 million dollars.

Eliminate USPTO Fee Diversion:

In order to ensure that patent examiners have both adequate training and funding, the STRONG Patents act proposes eliminating USPTO fee diversion and gives the PTO the ability to access and spend the fees it collects without regard to fiscal year limitations.

Post-Issuance Review Proceedings:

The STRONG patents act introduces a few changes to post-issuance review proceedings. Standing to file post-issuance review will be limited to only entities charged with infringement. In order to prevent anonymous petitions, the patentee will be allowed to discover the real party in interest associated with the filing of either a reexamination or post-issuance review. Further, in response to a post-issuance review petition, the patentee will be allowed to submit supporting evidence and will be allowed to amend the claims if “reasonable”. The STRONG patents act also prohibits PTAB judges who participate in the decision to grant a post-grant review petition from then hearing the same case on the merits.

Amending Divided Infringement Requirements:

The STRONG patents act proposes adding 35 U.S.C. 271(j) to the statute governing infringement of a patent. This new section specifically states, “It shall not be a requirement that the steps of the patented process be practiced by a single entity”.

Amending The Punitive Damages provision:

The act also proposes authorizing district courts to award enhanced treble damaus-senate-sealges at their discretion if “by a preponderance of the evidence” the infringement was demonstrated to be “willful or in bad faith.”

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