SAN JOSE, Calif. – Competing interests squared off in a hearing Wednesday (March 30) in the U.S. House of Representatives over details of a House version of a patent reform bill. The Senate passed its own version of patent reform bill (S.23) in a 95-to-5 vote on March 8.
The House bill (H.R. 1249) maintained much of the Senate bill, including popular measures to let the overburdened patent office set and retain all its fees. However, controversy flared over changes, particularly on prior use rights and post-grant reviews.
The Coalition for Patent Fairness--a group of mainly Silicon Valley giants including Apple, Cisco, Google, Intel, Hewlett-Packard and Oracle—said it will oppose the bill unless the House makes two changes.
The group wants anyone who commercializes a technology prior to a patent being granted to have prior use rights to it. Currently prior use only exists for business methods.
In addition, the coalition asked the House to loosen restrictions on a so-called inter partes review at the patent office "to weed out junk patents," said Mark Chandler, general counsel for Cisco in prepared testimony. The changes include extended the time to request a re-exam, letting accused infringers make the requests and ending supplemental patent exams where applicants can present new information.
John Vaughn, executive vice president of the Association of American Universities was among several who opposed such changes, calling for lawmakers to maintain a high threshold for inter partes reviews. In addition, even though universities are exempt from the prior use provision in the House bill, Vaughn opposed the measure.
"Many companies to which universities license their patents mingle university patents with their own patents in developing new products," Vaughn said in a prepared statement. "The commercial prospects for those products would be at risk with the expansion of prior-user rights, even with a university carve-out," he said.
The Innovation Alliance—a group including companies with significant technology licensing business such as Tessera, Qualcomm and Dolby--also opposed extended prior use rights and loosening provisions around the inter partes reviews.
"We believe a higher threshold is needed to enable the
patent office to manage the increased workload of the new administrative review
system fairly and efficiently by screening out meritless or unsubstantiated
petitions," said Brian Pomper, executive director of the Innovation Alliance.
In a separate statement Representative Mike Michaud (D., Maine) also opposed the extension of
prior use rights and the loosening of inter partes exam requirements. The
re-exam changes "allow infringers to challenge patents more
easily," he said.
In his testimony before the House, patent office director David
Kappos said expanded post-grant reviews in the House and Senate bills would not
overburden the patent office. In part, that's because the bills also call for
letting the agency for the first time set and keep all its own fees.
All sides backed the expanded funding for the patent office
which is coping with a historic backlog of nearly 800,000 applications.
"China intends to roughly double the number of patent examiners to 9,000 within the next four years" giving it more examiners than the U.S., said Steven W. Miller, general counsel for intellectual property at Proctor and Gamble in his testimony.
Kappos also argued in favor of the bill's shift from a first-to-invent to a first-to-file system to bring the U.S. into harmony with other major patent offices. Independent inventors have said the provision would harm them and advantage big corporations.
"In the last seven years, only one independent inventor’s filing out of more than three million total patent filings would have received a different outcome under the first-inventor-to-file system," said Kappos in his testimony
Under the current system, proceedings to dispute who was first to invent a technology can cost $500,000 and more if there is an appeal, Kappos said.
The draft bill sits with a committee and has not yet been formally introduced in to the full House for debate.