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The U.S. Congress may soon be turning its attention to proposed changes in patent laws. But the most controversial recommendations announced recently by the Federal Trade Commission are not likely to be taken up any time soon. In fact, if history is any guide, it may take several years for major patent legislation to make its way through Congress. “The implementation of any patent legislation is very, very slow,” says Margaret Boulware, who heads the intellectual property department at Jenkens & Gilchrist’s Houston office and is a former chair of the U.S. Patent and Trademark Office’s patent advisory committee. “It’s not impact legislation like [bills relating to] 9-11. It’s going to be a slower history than the FTC would expect.” The FTC issued a 315-page report in late October that includes 10 recommendations on how to improve patent quality through legislation or regulatory measures. While most expect Congress to maintain its glacial pace on the more controversial proposals, some patent practitioners think that a few pieces of the FTC program could be implemented within a year or so. One pending measure, which would increase funding for the PTO, was approved over the summer by the House Judiciary Committee. Q. Todd Dickinson, a former PTO chairman, says several of the FTC’s recommendations are included in the patent office’s 21st Century Strategic Plan, including a procedure for further review of patents after they have been granted. Other proposals would refine provisions of a 1999 law that overhauled the patent system. That law, the American Inventors Protection Act, took about five years to make it through Capitol Hill. One provision required patent applications to be published 18 months after filing if an application was pending in a foreign country. The FTC report calls for extending that notification to applications that are pending solely in the United States. Another FTC proposal, which would limit the award of treble damages for willful infringement, is already being addressed by the Federal Circuit U.S. Court of Appeals. The court is reviewing its previous policy that effectively requires parties to waive attorney-client privilege to defend against claims of willful infringement. Herbert Wamsley, executive director of the Intellectual Property Owners Association in Washington, D.C., says issues such as PTO funding, post-grant review procedures, publication of patent applications and willful infringement reform could be tackled immediately by Congress. “I hope they could be passed before the end of 2004,” says Wamsley. The FTC’s most significant and controversial proposal calls for legislation to ease the burden of proof required to invalidate a patent from a “clear and convincing evidence” standard to a “preponderance of the evidence.” Many patent practitioners say that idea is likely to touch off a vigorous debate in Congress. “That would be perceived by the patent community as a hot-button issue, and I think there would be a big, old bloody fight over that,” says Mark Janis, an intellectual property professor at the University of Iowa College of Law. Janis says a similar battle took place 20 years ago when legislation creating the Federal Circuit was enacted. The court, which handles all patent appeals, was intended to bring uniformity to patent law. And one area at issue was the presumption of a patent’s validity. “The subtext of the past debate was that people wanted a strong application of the presumption of validity,” says Janis. “That was a problem in the 1960s, 1970s and early 1980s.” Changing the burden of proof in patent dispuates “would quite definitely change the dynamic of how patent litigation is done and how negotiations are done,” says Michael Barclay, a partner at Wilson Sonsini Goodrich & Rosati in Palo Alto, California. “It is the most interesting recommendation and will probably be the most controversial.” The patent bar is clearly divided on the issue. Norman Beamer, a partner in Fish & Neave’s Palo Alto office, believes that changing the burden of proof “is not the right thing to do” and would not likely be adopted by Congress since it goes against an entrenched standard. “People, whenever confronted with a patent, tend to say that’s obvious or that’s been done before,” says Beamer. “People can’t really prove it. That’s why there is a clear-and-convincing standard. If a patent is invalid you have to have proof to back it up.” But the FTC, in its report, points to the limited resources of patent examiners as a reason for its recommendation that would make it easier to challenge patents in court. With about 300,000 patent applications flooding into the PTO each year, patent examiners have “from eight to 25 hours to read and understand each application, search for prior art, evaluate patentability, communicate with the applicant, work out necessary revisions and reach and write up conclusions,” the FTC says in its report. Given these constraints, along with presumptions and procedures that favor the granting of a patent application, “we believe the ‘clear and convincing evidence’ burden can undermine the ability of the court system to weed out questionable patents,” says the report. Another FTC recommendation calls for legislation to create a new procedure that would allow further review of patents after they have been granted. The agency is also calling on the PTO to consider possible harm to competition before extending the scope of things that can be patented. Mark Lemley, who teaches IP law at the University of California’s Boalt Hall School of Law in Berkeley, says the FTC report tracks what scholars, policymakers and researchers are saying must be done to change the system. “We need a cheaper way to attack the validity of a patent,” says Lemley. The presumption of validity shouldn’t be as easy as it is “given how easy it is to get a patent.” Dickinson, for his part, says he’s pleased by and large with the report, and is particularly encouraged by the recognition that the PTO needs enough funding to ensure patent quality. “There is a little under appreciation” by the FTC for the applications that don’t get allowed, he says, adding that more than 80 percent of business method patents are rejected. Dickinson, a partner at Howrey Simon Arnold & White, also questions the FTC’s statement that it would ask the Patent and Trademark director to reexamine questionable patents that raise competitive concerns. “Director-ordered re-exams can only happen on prior art” evidence, he says. “Anti-competition is not grounds for re-examination.”

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