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San Francisco�The National Academy of Sciences last week became the latest government agency to lay out a blueprint for improving the patent system. The NAS’ 140-page document calls for the U.S. Patent and Trademark Office (PTO) to harmonize its procedures with those in Europe and Japan. Specifically, NAS wants to award patents on a “first-to-file” basis rather than on the existing “first-to-invent” method. It also calls on Congress to exempt noncommercial scientific research from patent infringement liability. The NAS report echoes several of the recommendations made by the Federal Trade Commission (FTC) in its October 2003 report on patent reform. Both agencies addressed the surge in patent applications-and litigation-over the last 20 years and offer recommendations to ease the burden on the system. Both agencies call for a procedure to allow third parties to challenge patents for a limited period after they issue. The agencies would also make it more difficult to obtain a judgment of “willful infringement.” Finally, both would boost resources allocated to the PTO. Going one step further The NAS goes a step further with regard to willful infringement. The report proposes that willful infringement be removed entirely since it depends on litigating a party’s state of mind, which gives rise to high discovery costs. For the same reason, the NAS would do away or modify the doctrines of “best mode”-looking at the inventor’s take on the best way to implement the invention-and “inequitable conduct”-penalizing applicants for misleading the patent office. Former PTO Director Q. Todd Dickinson, who was one of the reviewers of the NAS document in its earlier drafts, said that removing inequitable conduct could generate a fair amount of controversy. “Certainly there is a belief that the inequitable conduct defense is used too frequently,” Dickinson said. But he added, “I can’t believe they meant to do away with that entirely.” The NAS report also hinted that the U.S. Court of Appeals for the Federal Circuit should try living in the real world. “We recommend some modest steps to ensure that the Federal Circuit, despite its specialization, has broader exposure to legal and economic analysis in all areas of innovation-related law and to the impact of its decisions on the lower courts and on the patent office.” The report says that the Federal Circuit, which handles all patent appeals, should encourage people to submit briefs that draw upon other judicial decisions and legal scholarship on the patent system and the economics of patents. It also recommends that appointments to the Federal Circuit bench should be broadened to include people with backgrounds in antitrust or finance law or economics. The report further encourages the Federal Circuit to invite regional judges to sit on its panels, and recommends that regional circuits invite Federal Circuit judges to sit by designation.It’s uncertain whether any of the proposals will actually be implemented. Most of them require congressional backing, and Congress historically has been very slow to adopt new patent legislation. A 1999 law that overhauled the patent system-the American Inventors Protection Act-took about five years to clear the House and Senate. The NAS report was scheduled for release on April 22 to coincide with a conference on patent reform sponsored by the NAS, FTC and several university groups. At a press conference earlier this month, attendees asked what the prospects were for carrying out the FTC’s recommendations. “The challenge will be changing the interests of people in Washington,” said Mark Myers, co-chairman of the NAS study and a retired senior vice president of Xerox Corp. Senior FTC policy analyst Susan DeSanti added that Representative Lamar Smith, R-Texas, chairman of the House Judiciary Subcommittee on Courts, the Internet and Intellectual Property, has said he was interested in holding hearings on patent quality, though none has yet been scheduled.

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