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Nov 10 2005 - Fixing HR 2795.  The right things to do.

 

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Appendix to Patent Reform and its Implications for the Biotechnology Industry.

Reinvigorating Patent Quality:

Proposed Amendment to §100, 102, 103 and 112 of USC Title 35.

 

Prepared by K Karel Lambert, of Lambert & Associates

  

Issues Not Successfully Addressed by HR 2795, the “Patent Reform Act of 2005”

This discussion is written addressing patent practitioners.  Effort is made, however, to provide a stand-alone explanation in the text for the business persons and inventors who are most likely to be impacted by pending legislative changes to US patent laws.  More general patent reform information is provided elsewhere.[1]

The legislation offered to date has focused disproportionately on more risky elements of tort reform that may have unanticipated and unsettling outcomes by weakening the patent right.  In this vein, HR 2795 has drifted away from some of the key recommendations of the National Academy of Sciences (NAS) Report of 2004[2].

In an effort to strengthen patent quality, NAS strongly recommended revitalizing the non-obviousness standard (section 103 of USC Title 35).  Measures to eliminate “bad” patents are expected to resolve many freedom-to-operate issues that otherwise must be settled by litigation.  

Another problem arises not from existing law but from the legislation itself.  By eliminating the existing US requirement that inventors disclose “best mode”, there is a real risk that patent filings will fail to identify the best mode, either retaining it as a trade secret, or offering instead speculative constructive reduction to practice (a best guess as to how to make the invention actually work) in exchange for the patent right.  This potential problem is compounded by the “first-to-file” rule.  We face a dimunition of the American tradition of actual reduction to practice, and increased pressure on attorneys to file constructive reduction to practice as hastily, broadly, and as nondescriptly as allowable, letting the patent office, or the courts, sort out what is enabling, obvious and what is not.  All biotechnology players have decried the overreachingly broad patents and resulting litigation from the 1990s. 

The “copy claims” issue is also particularly problematic.  Broadly drafted patents, filed even before actual reduction to practice, allow inventors to use continuation filings to claim the discoveries of third parties as their own.  NAS concluded that this practice discourages innovation.  The business risk of entry into a hot new field is prohibitive if there is no reward for second place, and if independently developed innovations developed by second-place inventors will be scooped up by the first to file through the copy claims practice.     

It has been suggested that the Director regulate copy claims by establishing limits on their filing.  Under PCT practice, the patentee is allowed only a limited window to amend the claims.  However, the fact that “copy claim” misuse has been a problem particularly in the US is related not to an absence of a time limit on copy claim filing but rather to a stronger enforcement of enablement and support requirements by the European patent examination corps.  NAS recommended correcting misuses of the copy claim process but no measure has been adopted.   

In combination, these unaddressed problems are anti-innovative.  A system which places the first-to-file in such an overwhelmingly dominant position may promote the kind of “patent mills” we see in Europe.  These laboratories exist solely to generate royalties on patents and have no manufacturing intent.  They invent patents, not products, and are specially adapted to be the first to file on any new technology that can be harvested from the emerging scientific literature. 

Proposals made here address these timely issues.  Details of amendments to sections 100, 102, 103 and 112 are provided below that more cogently redefine patentability to counter the potential anti-innovative effect of patents, a major concern of NAS and the FTC[3]

Proposed are relatively conservative revisions to section 103 (obviousness) and section 112 (written description and enablement) that update statute with case law developed over the last 150 years.  The critical change, however, is in the definition of prior art, which has entangled efforts to redraft sections 102 and 103.  As discussed here for the first time, an opportunity has arrived to update the definition of prior art in its most modern sense as a “stand alone” definition in section 100 (“Definitions”).  These proposals are now discussed in more detail.  

First, section 112 of Title 35 has been wrung dry by the courts.  The problem of overreaching and overly broad patent claims is now a legislative problem.  The European system has always been less accommodating to broad and unsupported patent claims. US courts have reached similar conclusions, barring for example broad generic claims based on a single working example.   The US Congress must now act to ensure that the requirements of section 112 are clearly articulated as statutory bars against patentability if not met, not merely a set of guidelines for good patent practice.  The PTO must be more explicitly empowered to reject patent claims for insufficient and non-enabling support in the specification. 

Secondly, we have proposed a new way of defining prior art for purposes of the novelty and obviousness statutory bars to patentability.   Prior art is defined in section 100 of the code so that its use in other sections of the statute can be standardized and exceptions made on a section by section basis.  This seems a logical approach to what has been a troublesome problem for the drafters of HR 2795.  Each of three published committee prints contained extensive revisions of sections 102 and 103 because of insoluble problems in the drafting of a definition of prior art containing section-specific exceptions but globally applicable throughout the statute.

Thirdly, by specifically creating an exclusion for non-published patent applications under the obviousness bar to patentability (§103), we level the playing field in closely matched inventor’s contests, raise a barrier to misuse of copy claims, and promulgate a motivation to disclose that counterbalances elimination of the best mode requirement.  The legislative history of section 103 supports this, law from the bench aside.

In European practice, patent applications are not prior art for purposes of obviousness (inventive step) until their date of publication.  The inflated shadow cast by the first-to-file must have limits. Those inventions which were not conceived by the first-to-file should not be surrendered to that one patentee by all others through the copy claim process.  This is an anticompetitive effect of current US law if there ever was one, and only Congress has the power to rectify it.   In a survey of the biotechnology industry, more than 30% of CEOs characterized the problem of 3d party patents as a major hurdle to market entry.  Our proposal is intended to create niche positions for more players,  reduce the likelihood of a monopoly over future research for a single player, and reward excellence over haste.  In this proposal, it is assumed that all patent applications are routinely subject to publication at 18 months post filing. 

Furthermore, we are particularly concerned that with repeal of the best mode provision of section 112, the quality of patent applications may deteriorate, and inventors may seek to withhold more valuable variants on the invention as trade secrets.  An incentive is necessary to encourage inventors to fully disclose their inventions.  The following simple fix may suffice.  By legislating that patent applications do not become part of the prior art until their date of publication (rather than their date of filing), then for 18 months following the first filing, other inventors (unbeknownst to each other) are not barred from claiming non-obvious improvements to the basic invention.  The patent office may grant claims not only to the first-to-file, but also to any second inventors whose claims contain any added inventive step not explicitly anticipated by the first to file.  An exception in §103 for unpublished patent applications puts more pressure on the first-to-file to make a complete and enabling disclosure. Any inventor seeking to be first-to-file must be forthcoming in their filing, disclosing all known modes of practicing an invention, for fear that second-place inventors may be granted narrower claims to more commercially viable versions of the basic invention. 

This simple fix provides the lacking motivation to make a thorough and enabling disclosure up front, while still discarding the potential for subjective and difficult disputes engendered by the existing best mode requirement.   Without this motivation, the legislative effect, when combined with “first-to-file”, may result in a system in which the most successful strategy is to hastily file broad patent applications containing the bare minimum of technical information. 

The following is offered as an amendment to the current language of HR 2795.  It is hoped that its introduction here will lead to a recognition of the need for a clear, modern, stand-alone definition of prior art, updated standards of enablement and written description, and a head on discussion of the problem of copy claims in US patent practice.

Biotechnology as an industry will benefit from a patent system that promotes both innovation and strong intellectual property ownership.  When combined with changes in the way intellectual property is treated for tax purposes (vis a vis Ireland), these changes can be expected to dramatically grow the value of the patent system as an engine for economic growth.

 

Amendments to Title 35 to read as follows:

 Add Section 100(j), reciting:

“§100(j). Definition of Prior Art.— The term ‘prior art’ reflects the state of the art as it exists prior to the effective filing date of the claimed invention; and,

(1)    takes within its meaning everything reasonably, effectively and permanently accessible to the public, by means of written description, use, sale, teaching, or as commonly known, including publications, media, patents, and patent applications, without geographic restriction, prior to that date, except as noted in subsections (2)-(4) of this section;

(2)    patents and patent applications shall be deemed within the prior art as of their effective date of filing, unless otherwise exempted by this statute;

(3)    ephemeral electronic publications or other impermanent records are not deemed within the prior art for purpose of this statute unless a dated and permanent record is made of their contents prior to the effective filing date of the claimed invention in a form as set forth by the Director; and

(4)    notwithstanding subsection 100(j)(3), oral teachings or traditions are within the prior art if a credible witness or witnesses familiar with them prior to the effective filing date of the claimed invention subsequently declare their contents in a permanent form as set forth by the Director.

 

Amend Section 102 as follows:

“§102. Conditions for patentability; novelty and loss of right to patent.—A patent for a claimed invention may not be obtained if the claimed invention was described in the prior art, unless the prior art descriptions are—

(a)  dated no more than one year prior to the effective filing date of the claimed invention; and,

(b)  are shown to derive from the inventor or a joint inventor or from others who obtained the subject matter described, either directly or indirectly, from the inventor or a joint inventor.

 

Amend Section 103 as follows:

“§103. Conditions for patentability; obviousness and loss of right to patent.—

(a)  A patent for a claimed invention may not be obtained although the claimed invention is not described in the prior art, if the differences between the subject matter of the claimed invention sought to be patented and the prior art as a whole are such that the subject matter would have been obvious prior to the effective filing date of the claimed invention to a person having ordinary skill in the art to which said subject matter pertains; unless the prior art descriptions are—

(1)    shown to derive from the inventor or a joint inventor or from others who obtained the subject matter described either directly or indirectly from the inventor or a joint inventor; or,

(2)    unpublished patent applications; or,

(3)    COMMON ASSIGNMENT EXCEPTION.—patents or patent applications, the whole of which and the claimed invention, not later than the effective filing date of the claimed invention, were owned by the same entity or subject to an obligation of assignment to the same entity; or,

(4)    JOINT RESEARCH AGREEMENT EXCEPTION.—(A) patents or patent applications, the whole of which and the claimed invention, not later than the effective filing date of the claimed invention, were—

(i) made by or on behalf of parties to a joint research agreement that was in effect on or before the effective filing date of the claimed invention;

(ii) made as a result of activities undertaken within the scope of the joint research agreement; and

(iii) the application for patent for the claimed invention discloses or is amended to disclose the names of the parties to the joint research agreement.

(B) For purposes of subparagraph (A), the term “joint research agreement” means a written contract, grant, or cooperative agreement entered into by two or more persons or entities for the performance of experimental, developmental, or research work in the field of the claimed invention.

 (b)  Patentability shall not be negatived by the manner in which the invention was made.

 

Amend section 112 as follows:

“§112. Conditions for Patentability; Specification; Claims; and Loss of Right to Patent.—

 (a) IN GENERAL – The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, or the invention shall not be patentable.

(b) CONCLUSION – The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention as conceived on the effective date of filing and supported in the specification.

(c) FORM – A claim may be written in independent or, if the nature of the case admits, in dependent or multiple dependent form.

(d) REFERENCE IN DEPENDENT FORMS – Subject to subsection (e), a claim in dependent form shall contain a reference to a claim previously set forth and then specify a further limitation of the subject matter claimed. A claim in dependent form shall be construed to incorporate by reference all the limitations of the claim to which it refers.

(e) REFERENCE IN MULTIPLE DEPENDENT FORM – A claim in multiple dependent form shall contain a reference, in the alternative only, to more than one claim previously set forth and then specify a further limitation of the subject matter claimed. A multiple dependent claim shall not serve as a basis for any other multiple dependent claim. A multiple dependent claim shall be construed to incorporate by reference all the limitations of the particular claim in relation to which it is being considered.

(f) ELEMENT IN CLAIM FOR A COMBINATION – An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.

 © KLambert 2005 – Grant of permission to copy, reproduce or prepare derivative works made without reservation.


 

 

About the Author


 

The author, K Karel Lambert, is the principal and of Lambert & Associates and is a member of the WBBA’s Patent Legislative Advisory Committee.  Lambert joined the patent bar in 2002 after a career as a scientist, engineer and inventor in academia and industry.  He was the principal inventor (product and process) on two commercialized products from start-up to market [Tocosol®, and Optison®].  Tocosol has been funded by Schering AG in a deal estimated at $160M (SNUS/NASDAQ).  Optison is marketed worldwide by Amersham Imaging.  Lambert also helped discover and investigate two human genes, lead a chemical synthesis team, designed clinical diagnostics and medical devices, and now specializes in intellectual property issues in selected technology areas.  His patent services practice draws on experience in Architecture, Chemical Engineering, Laboratory Clinical Pathology, Nutraceuticals, Pharmaceuticals, Molecular Biology and Microbiology.  Lambert is a registered Patent Agent, and is fully licensed with the US Patent and Trademark Office.  A CV is posted at www.4ipt.com/KKL-Vita.htm.  For more information on patent law reform, click on www.4ipt.com , http://Patentlaw.typepad.com/, and www.Promotetheprogress.com

 


 

[2]   A Patent System for the 21st Century.  2004. (Stephen A. Merrill, Richard C. Levin, and Mark B. Myers, Eds), Committee on Intellectual Property Rights in the Knowledge-Based Economy, National Research Council, National Academies Press, Washington DC.  [http://www.nap.edu/openbook/0309089107/html]

[3]   To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy A Report by the Federal Trade Commission. 2003. US Govt Printing Office. http://www.ftc.gov/os/2003/10/innovationrpt.pdf