However, the witnesses generally lauded the PTO and its director, David J. Kappos, for transparency in the justifications for various rules and in fee-setting philosophy, blunting much of the criticism of specific proposals.
A significant source of debate for both the legislators and the witnesses was the AIA's program allowing challenges to “covered business method” patents. Critics and proponents continued to disagree over which patents qualify as CBMs, and which are exempted as “technological inventions”--a category that the PTO is charged with defining.
The possibility of a further technical amendment to the patent reform legislation preoccupied several members of the panel.
Smith was effusive in praising Kappos during his introduction. “Without Director Kappos' steady hand, expertise, and support, we would not have enacted the America Invents Act,” Smith said.
Kappos was the sole witness on the first panel. His testimony addressed the AIA provisions that the agency has implemented to date, most notably “Track One” prioritized examination. He also gave details about the feedback to notices of proposed rule making by the PTO since the bill was enacted, citing “hundreds of comments” received from the patent community and that are currently being reviewed by the office.
“We have received excellent input on rules ranging from post-grant opposition to inter partes review to oath and declaration,” Kappos said in his written testimony, “enabling us to make many substantive improvements to our proposed rules provisions across the board, and produce rules that will best meet the needs of America's innovation community.”
The witnesses praised Kappos and the PTO for the AIA implementation efforts to date.
Williams thanked Kappos and his team “for the commendable job they have done in the initial rounds of rule-making,” and Armitage applauded “the candor, transparency and completeness of USPTO communications with the user community.”
Representatives of the Intellectual Property Owners Association and the American Intellectual Property Law Association told BNA after the session that they were disappointed that there was effectively no discussion of the PTO's planned implementation of the AIA's patent review procedures--a topic that drew criticism from the IP groups a month earlier.
Instead, Williams focused his testimony on Section 18 of the AIA, which allows a challenge to a covered business method patents, and the committee definitely seemed more interested in that provision.
The key issue to Williams was the PTO's ability to reject a CBM challenge because the patent challenged fits the definition of a “technological innovation.” Williams wanted the PTO to further clarify that the patent owner should have the burden of sowing that the exception applies and that the challenger need not be threatened with litigation before having the ability to file a petition.
However, Rep. John Conyers Jr. (D-Mich.), ranking minority member on the committee, called the provision--which was introduced late in the patent reform debate by Sen. Charles E. Schumer (D-N.Y.)--“special interest legislation.” Conyers questioned the constitutionality of the provision.
Rep. Maxine M. Waters (D-Calif.) failed in her attempt to delete the provision from the bill just before the House vote, and she clearly wanted the provision to be limited now as well. She questioned the “basic unfairness” of retroactively invalidating patents.
The clear impetus of the February meeting was to gauge whether a “technical amendment” to the AIA is necessary to address another concern--the fact that the AIA's version of prior user rights differs from similar statutes in other countries.
At the end of the February hearing, though, it appeared that those interested in changes to the AIA's prior user rights provision would be willing to wait until the PTO's 2015 report to Congress on the implementation of the AIA. Kappos agreed at the time that the 2015 report could include an analysis of the economic impact of prior user rights under the AIA.
However, the potential for a technical amendment this year has apparently not died.
Rep. F. James Sensenbrenner Jr. (R-Wis.), instead of directing his remarks to Kappos after the director's testimony, turned to the leadership of the committee--Smith and Conyers--and said, “Don't play 'I've got a secret' with the changes you're proposing.”
Apparently assuming a technical amendment was in the works, Sensenbrenner added, “Keep it technical and only keep it technical.”
Smith seemed perturbed by the challenge from his colleague. “Let me assure you there is no technical bill and everyone will be made aware of it when there is,” he said.
However, after the second panel gave their introductory testimony, Smith asked Armitage whether any “technical fixes” were necessary.
Armitage contended that the bill's drafters actually erred in recording what the interested parties had agreed to in one part of the post-grant review proceeding.
The AIA's new Section 325(d) of the Patent Act estops a PGR challenger from further litigation “with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that post-grant review.” Armitage asserted that everyone had agreed that it should have been limited to grounds raised.
In another discussion initiated by Rep. Michael Quigley (D-Ill.), it seemed clear that some of the committee, including Smith, were surprised that the AIA does not allow the PTO to give discounts on post-grant challenges to small entities and the micro-entities.
Williams mentioned adding that change as part of any technical amendment in response to Smith's questioning.
After the hearing was adjourned, an aide to the committee told BNA that the chances that the House would act quickly on a technical amendment were slim, but that the Senate seemed to be moving in that direction.
By Tony Dutra
Testimony at http://judiciary.house.gov/hearings/Hearings%202012/hear_05162012.html
Armitage is a member of this journal's advisory board.
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