If you read my blog often, you know I like patent law. It’s a fascinating, convoluted mess that’s become (fortunately or unfortunately) incredibly relevant for technology companies. Major areas of law rarely receive substantive overhauls, and even more rarely does an overhaul happen in an area of law that you have an intellectual interest in, so I feel lucky to be around studying Patent law at a major turning point. The zeitgeist of the patent world/blogosphere is rather unique right now – It’s like a new season in a sport or a television show; nobody knows exactly what to expect, there are lots of unanswered questions, and everybody has an opinion on how that last season went and what needs to change.
In my opinion, the last season of Patent Law:USA went just okay. Got a little out of hand there at the end, akin to a TV show that gets a bit away from the writers in the final few episodes – sort of like LOST season 2. Everything was going pretty well in the Patent law world until we got to the late 90s, when business methods patents and the internet sort of took us in directions we hadn’t contemplated originally in terms of intellectual property rights. “Prior patent + ‘on the internet’ = bad patent” was the rallying cry of a host of critics – but those critics likely don’t see much on the face of the new act to give them hope that the problem is solved. I for one am somewhere in the middle when it comes to opinions on the last season of Patent Law – I’m not an extremist who thinks we need to blow up the whole system, but there are definitely problems with patent trolls and with software patents in particular that I think need to be addressed, as they put an impossible burden on new companies and reduce the efficiency of capital flowing to useful ends.
Anyway, enough opining on our long lost Patent season (which, as it turns out, will have plenty of support in reruns… see below). We have a new patent act that takes effect in various stages anywhere from last friday to 18 months from now, and I want to cover some of the strange aspects of this reform:
There are now two different, substantive bodies of law on patents, and there will be for the next 25+ years
Every patent currently issued and every patent currently on file (except for those filed in the last 4ish days) is subject to the “old” patent law regime. Considering that the PTO takes quite a while to grant a patent, that there are provisional patents out there (many, many filed last thursday), and that you can file continuation patents and extensions, that “old” patent law we all know and love is far from dead – it will take 25 or more years for every patent issued and subject to the “old” laws to expire. That sounds like just a cute and potentially confusing nuance until you consider that major companies will likely hold patents under both regimes – and they will sue asserting patents from both regimes. Starting in 3-4 years once we see issued patents under the new regime, we may see litigation where completely different rules apply to different patents at issue in the same case. This could be extremely confusing for juries given some of the other substantive changes to the way things like prior art are handled, with some prior art able to invalidate earlier patents but not later patents, a result laypeople will find illogical.
Similarly, there are now four different types of reexam
I haven’t tracked the timing of various parts of the bill closely enough yet, so I’m not sure if there will every be a moment in time where all 4 types are potentially going on at the PTO, but in theory there are 4 types of reexam proceedings that can be initiated in the next year or so (the current ex parte and inter partes, and the new post grant review and new inter partes). Reexam is actually getting a huge substantive overhaul, the primary changes being that it now takes place like a mini-trial with discovery in front of a 3 judge panel with a one year timeframe. That timeframe might be a huge boon to defendants, who may be able to convince judges to stay a district court case more easily if they can guarantee that the PTO will finish the reexam in a year, when a district court is often just getting to the Markman hearing. Lot of “maybe” in there – the thrill of a new patent act – but it seems that reducing the timeframe for reexam should encourage defendants to explore that option more frequently, with courts likely more willing to stay a case in the meantime.
It’s hard to imagine anybody using the new Post-Grant Review form of reexam
The new reexam regime is split into two timeframes – if you apply for review within 9 months of issuance, you do the new Post-Grant Review process; otherwise, the new Inter Partes process. The standard is either lower or higher than the standard for inter partes depending on how you interpret the statute, and you have access to more prior art to invalidate the patent, but you also risk never being able to challenge the patent again – the loser of a PGR is estopped from asserting invalidity on effectively ANY ground. That’s a pretty big risk even for a challenger who has a slam dunk piece of prior art – even if you are 90% sure you’ll prevail in that review, why not wait and bring out the prior art in court? It will be interesting to track how firms and companies strategize around the new review process, but given the incredibly high stakes for losing a PGR and the relatively low stakes of a district court ruling, it seems unlikely that the PGR will become a popular choice. And remember, PGR is only available for 9 months following issuance of a patent, which is a rather narrow window considering the planning that needs to go into filing for the process.
That’s just a few of the interesting twists thrown into the system by the new Patent Act – haven’t even mentioned changes to the joinder rules, or the odd place obviousness may be in after switching to the first-to-file-or-publish system. Lot is still up in the air, there are lots of terms in the Act (which is pretty poorly drafted, actually) that will garner significant debate and eventually litigation, and the full scope of the changes probably won’t be appreciated for many years.
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