What's Hot In Patent Law?

This year has proven to be a memorable year in patent law with far-reaching implications. From the long-anticipated enactment of patent reform legislation, signed into law by President Obama only last week, to a number of significant Supreme Court and important Federal Circuit en banc decisions, this year had it all. Also, the Supreme Court has granted certiorari and the Federal Circuit has granted petitions for rehearing en banc, previewing important decisions still to come.

Enactment of Patent Reform Legislation ("America Invents Act")

After many years, patent reform has finally arrived with President Obama's signing of the Leahy-Smith America Invents Act on September 16, 2011. While several controversial measures did not make it into the final bill (including hotly debated legislation addressing patent law damages), the Act does contain several important provisions that may have far-reaching implications both in the PTO and the courts. We will be addressing these in greater detail in upcoming IP Education programs scheduled for October 26 & 27, 2011.

Some of the Act's key provisions include:

Effective Immediately:

False Patent Marking – the Act potentially eliminates false patent marking actions from district court dockets by removing the qui tam provision. Now, only the United States and persons who have suffered a competitive injury may recover damages for false patent marking; Joinder – the Act precludes patent holders from joining multiple defendants in a single action solely because they are alleged to have infringed the same patent; and Best Mode Defense – eliminated. Also of note:

First to File – the Act adopts a "first to file" approach whereby the "effective filing date" of a patent application is the actual filing date / this eliminates the ability to "swear behind" references; The Act includes important sections addressing Post-Grant Review Proceedings and Inter Partes Review Proceedings; and Failure To Obtain Advice of Counsel – can no longer be used to prove that the accused infringer willfully infringed the patent or intended to induce infringement of the patent. What's not in the America Invents Act? Earlier versions of the Patent Reform Act included a number of provisions that are not a part of the "America Invents Act." The following previously proposed provisions, among others, did not make it in the version of the bill that was enacted.

Damages – Early versions included a "valuation calculation" provision that required the court to "conduct an analysis to ensure that a reasonable royalty is applied only to the portion of economic value of the infringing product or process properly attributable to the claimed invention's specific contribution over the prior art." Willfulness –Early versions included restrictions on willfulness findings, requiring clear and convincing evidence that the infringer acted with "objective recklessness" (meaning the infringer (1) performed infringing acts after receiving adequate notice from the patentee, (2) intentionally copied the invention with knowledge it was patented, or (3) after having been found by a court to have infringed that patent, the infringer engaged in conduct that was not colorably different from the conduct previously found to have infringed the patent, and which resulted in a separate finding of infringement of the same patent). These restrictions also stated that a court may not find that an infringer willfully infringed for any period of time during which the infringer had an informed good faith belief that the patent was invalid or unenforceable, or would not be infringed by the conduct later shown to constitute infringement of the patent. Early versions also placed limitations on pleading willfulness: "Before the date on which a court determines that the patent in suit is not invalid, is enforceable, and has been infringed by the infringer, a patentee may not plead and a court may not determine that an infringer has willfully infringed a patent. The court's determination of an infringer's willfulness shall be made without a jury.'' The only portion of the willfulness provision later enacted, albeit in somewhat different form, is regarding opinion of counsel. The 2009 version of the bill stated: "The decision of the infringer not to present evidence of advice of counsel is not relevant to a determination of willful infringement...." Forum shopping Early versions of the bill also contained a provision regarding patent litigation venue, specifying that venue is proper only where defendant is incorporated, has its principal place of business, or is permanently located and has committed substantial acts of infringement, or where the plaintiff resides if the plaintiff is a nonprofit or individual inventor, and requiring transfer where it would not cause undue hardship to plaintiff. The Year's Notable Supreme Court And Federal Circuit Patent Decisions

1. SUPREME COURT CASES

   1. UPHOLDING THE CLEAR AND CONVINCING STANDARD FOR INVALIDITY CHALLENGES: Microsoft Corp. v. i4i Ltd. Partnership, 131 S. Ct. 2238 (decided June 09, 2011)

      In an 8-0 decision, the Supreme Court affirmed that invalidity must be established by clear and convincing evidence, based on the presumption of validity written into the Patent Act. The decision put an end to speculation that that the Supreme Court might lower the evidentiary standard for invalidity to a preponderance of the evidence standard to combat the issuance of "bad" patents by the Patent and Trademark Office (PTO). The opinion left open questions about how juries should be instructed if prior art before the jury was not before the PTO.

   2. AFFIRMING THE FEDERAL CIRCUIT'S FINDING OF INDUCED INFRINGEMENT, BUT UNDER A NEW STANDARD: Global‐Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060 (decided May 31, 2011)

      In an 8-1 ruling, the Supreme Court examined the intent standard for inducement and affirmed the result in the Federal Circuit, finding that Global‐Tech infringed by inducement. The Supreme Court ruled that induced infringement under § 271(b) requires knowledge that the induced acts constitute patent infringement. The Supreme Court applied a more stringent intent standard than the Federal Circuit, requiring "willful...