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Anti-Inventor and Business Earmark Act of 2011 (“America Invents Act” or “patent reform”)

20 Sep

HR 1249 is now law, with many arguably innovation stifling features, including a downgrade to a first to file system for “harmonization”, inventor bypass provisions, the continuation by sell-out (“compromise”) of fee-diversion whereby PTO revenues are diverted to a “pool” for appropriation to other programs, numerous EARMARK provisions to giveaway taxpayer money to certain big contributors and lobbyists, such as $214M to one law firm, $1B to the drug Angiomax, and untold millions denied to Data Treasury as royalties from Wall Street .  Short-term political sound-bites (“a much-needed update“, “will unleash inventors“, ” will address the backlog“, “millions of jobs lie in wait for this“, “will end fee diversion” etc., etc.)  have been purchased on the back of American small inventors so that big businesses can stay big and small inventors can be crushed. Senator Cantwell (D-WA) said “This is not patent reform it is just a big business giveaway.” Some predict it will create jobs, but others suggest it will actually kill jobs.

The bill has 37 sections. An objective analysis indicates only Section 30 really favors small inventors, but it is a false statement of purpose.  The America Invents Act is more properly called the Anti-Inventor Big Business Earmark Act of 2011

So let’s go through this bill, section by section .  For purposes of scoring the winners and losers, we give +1 for a favorable change, +2 for a very favorable change, 0 for a neutral provision , -1 for a harmful change, and -2 for a very harmful change:

Sec. 1. Short title; table of contents. A misdescriptive title, as this has little to do with making America invent but rather seems to be concerned with distortion of the system in favor of big business and special interests [Bigs & Foreigners 0, Small Guys 0]

Sec. 2. Definitions. Aimed to define inventor in a different way from the “first and true” inventor meant by the founders so as to lay basis for claim that a first to file applicant is the kind of “inventor” meant by the founders.  It is really a false definition, but unsurprising as these are politicians adept at false statements. [Favors Bigs, but it is only a definition, so Bigs & Foreigners 0, Small Guys 0]

Sec. 3. First to file. (“FTF” provision) Amends federal patent law to abandon the first to invent system of the past 221 years by redefining the “effective filing date” of a claimed invention as the actual filing date of the patent or the application for patent containing a claim to the invention (thus replacing the current “first inventor to use” system with a “first inventor to file” system), except as specified. Requires the effective filing date for a claimed invention in an application for reissue or reissued patent to be determined by deeming the claim to the invention to have been contained in the patent for which reissue was sought. [Favors Bigs who have resources to file quickly, hurts small guys, and really hurts idiots who don’t know to file quickly so Bigs & Foreigners +1, Small Guys -1, Idiots-2] Establishes a one-year grace period (a prior art exception) for inventors to file an application after certain disclosures of the claimed invention by the inventor or another (e.g. a big business colleague) who obtained the subject matter from the inventor. [This big business provision will also help idiots who carelessly disclose, so also give them a point, Bigs & Foreigners +2, Small Guys -1, Idiots -1]. Revises provisions concerning novelty and nonobvious subject matter (commonly referred to as conditions for patentability) to introduce patent-killing quasi prior art, that are after date of invention but prior to filing date. Currently an inventor can swear behind and remove such quasi prior art by a “Rule 131 Declaration”, but those are eliminated to help big business kill small inventor patents. [Heavily favors the bigs so give them 2 points, and seriously damages the small inventor and idiots [Bigs & Foreigners 4, Small Guys -2, Idiots-2] Repeals provisions relating to inventions made abroad and statutory invention registration. [A big business objective, so Bigs & Foreigners +5, Small Guys -2, Idiots-2] Permits a civil “derivation” action by a patent owner against another patent owner claiming to have the same invention and who has an earlier effective filing date if the invention claimed by the earlier patent owner was derived from the inventor claimed in the patent owned by the person seeking relief. Requires such an action to be filed before the end of a specified one-year period, but does not provide for any discovery. [This is the resurrection, in part, of Section 5 of the original 1790 Patent Act, but without any means of getting the proof of derivation.  Since applications are not published until a year & a half, this needs to be 2.5 years, not 1, if it is really intended to have any substance, so it is completely ineffective to accomplish the objective, and extremely heavily favors big business and will hurt many, many small guys and hurt idiots – idiots will not have kept records needed to show derivation.  [A 2-pointer for Bigs & Foreigners +6, Small Guys -4, Idiots -4] Next, sets forth derived patent provisions. Replaces: (1) interference proceedings with derivation proceedings, and (2) the Board of Patent Appeals and Interferences with the Patent Trial and Appeal Board (the Board). [Derivation proceedings will be very costly, so only bigs can afford them. Favors the bigs, so Bigs & Foreigners +7, Small Guys -4, Idiots-4] Requires reports from: (1) the Small Business Administration (SBA) on the effects of eliminating the use of dates of invention in the patent application process, particularly on small businesses; and (2) the U.S. Patent and Trademark Office (USPTO) on the operation of prior user rights in selected countries in the industrialized world. [Strongly favors the bigs, so Bigs & Foreigners +8, Small Guys -4, Idiots+1]  Bigs are on a roll, so far, and small guys hurting.  Next, directs the Comptroller General (GAO) to submit a report on the consequences of litigation by non-practicing entities, or by patent assertion entities, related to patent claims under specified federal patent laws and regulations. Again, simply a report, but since it is GAO, it will arguably be relatively impartial.  This is designed to give Bigs ammunition to use to get legislation and court decisions against so-called “patent trolls”, but means that small guys and idiots may not have trolls around to buy their patents, even for pennies on the dollar. [Heavily pro-Bigs, so Bigs & Foreigners +9, Small Guys -5, Idiots-5] Next, to try to make the unconstitutional FTF provisions withstand constitutional challenge, expresses the sense of Congress that converting from a “first and true inventor ” to a “first inventor to file” patent system will: (1) provide inventors with greater certainty regarding the scope of protection [i.e. certainty that, if they are small, they will have no effective protection], and (2) promote international uniformity by “harmonizing” [“harmonizing” is a spin word to make a DOWNGRADE sound like a good thing – after all, don’t we all want “harmony”?] the U.S. patent registration system with systems [which no one denies are inferior] commonly used in other countries with whom the United States conducts trade. [Tries to use “sense of Congress”, an oxymoron, to combat language from Supreme Court (in the Florida Prepaid and Stanford v Roche cases) stating inventions are property and that inventions are owned by that single human who first invented, and thus possible unconstitutionality of awarding exclusive rights to a later claimant to the same property. Falsely implies that downgrading to the inferior systems of other countries is good for the US due to “uniformity” and “harmonization”. (Will we next have adoption of Sharia law for “uniformity and harmonization” with Islamic countries? That might be less of a downgrade than this.)  [A 2-pointer for the bigs, so Bigs & Foreigners +11, Small Guys -5, Idiots-5]

Sec. 4. Inventor’s oath or declaration. (“Bypass Inventor”  or “BI” provision) Allows a person to whom an inventor has assigned (or is under an obligation to assign) an invention to make an application for patent without having to get an oath or declaration from the inventor. [There you go, big business wants to bypass employee inventors rather than have to negotiate with employees when stealing their inventions, so this means big business can just name whoever they like as inventor, thus avoiding disgruntled or ex-employees, and file on its own behalf for a false and not original lying dog inventor. Since derivation proceedings are toothless due to lack of discovery, this promises to be the death of University patent rights and the death of employee patent rights. Very strongly favors the Bigs, and is a big loss for small guys so much so that we feel compelled to give two points to Bigs and -2 to smalls. Idiots will, of course, sign employee agreements providing for this assignment and this bypass without reading them and be badly hurt by this bypass. [Bigs & Foreigners +13, Small Guys -7, Idiots -7] Wow, Bigs up by 20 after only 2 substantive sections!

Sec. 5. Defense to infringement based on prior commercial use.  (“Secret Prior User Defense” or “SPUD” provision) Modifies the earlier inventor to file defense to infringement by: (1) eliminating provisions that limited the defense to business methods, (2) applying the defense to commercial uses of the subject matter of a patent in the United States, (3) removing an existing definition of the applicable effective filing date, (4) specifying that the subject matter must be reduced to a practice and commercially used at least one year before the effective filing date, and (5) prohibiting such a defense for certain derived patents or disclosed inventions excepted from prior art when the commercialization date is less than a year before such disclosure. [ [EARMARK, a bailout for Big Software, which due to uncertainty on patentability of software, chose trade secrecy protection rather than patent protection.  Trade secrecy is why all the “shrink wrap”, ” click wrap” and other EULAs are routine now.  Having chosen trade secrecy rather than patents, Big Software was getting hammered by small inventors and small businesses that had invented and disclosed the same thing, as secret uses were not considered prior art since they are non-informing to the public.  This changes all that.  This earmark for MS, IBM and others, allows them to have their trade secret protection and yet use those secrets to defend against infringement claims.  In such suits, “protective orders” will allow them to continue to keep such secrets in secrecy. Big Software says this is fair because the patent disclosure which forms the basis of the patent does not disclose anything to big business that big business did not already know and the patent claims just something they had already doing secretly for more than a year.  Bigs want this provision to protect bigs against small inventors whether or not there is a FTF system. As for idiots, they will not know if big business really used the invention more than a year before, so Idiots will lose ability to enforce their patents against big business. This provision is perhaps the most pro-Big Business of all the provisions, so 2 more points, but a loss to small guys.  Bigs & Foreigners +15, Small Guys -9, Idiots-9]

Sec. 6. Post-grant review proceedings. Limits the filing of petitions for post-grant review to the one-year period beginning after the grant of patent or issuance of a reissue patent. Requires any petition for inter partes review to be filed after the later of: (1) one year after the grant or reissue, or (2) the date of termination of a post-grant review. Thus provides for sequential challenges, estimated likely to delay enforcement by up to 10 years [Favors the bigs, as these are sophisticated limits that small guys not familiar with the patent system cannot be expected to understand, but which the patent attorneys on staff at the Bigs will know in use to crush small guys. Idiots will not know of these proceedings or will not use them within the required 1 year deadline, so will be badly hurt. [Bigs & Foreigners +16, Small Guys -9, Idiots-11] Prohibits the USPTO Director (defined as the Under Secretary of Commerce for Intellectual Property and USPTO Director) from authorizing: (1) inter partes review unless the petition shows a reasonable likelihood that the petitioner would prevail with respect to at least one of the challenged claims; or (2) post-grant review unless information in the petition, if not rebutted, would demonstrate that it is more likely than not that at least one of the challenged claims is unpatentable, or unless such petition raises a novel or unsettled legal question important to other patents or applications. [Makes the proceedings complicated in order to favor the bigs and eliminate idiots from the game, so Bigs & Foreigners +17, Small Guys -9, Idiots-12] Disallows: (1) post-grant review and inter partes review if the petitioner (or real party in interest, or privy) has filed a related civil action before filing the petition, and (2) inter partes review if the petition is filed more than one year after the petitioner is served with a complaint alleging infringement. Prohibits the petitioner from asserting claims in certain proceedings before the USPTO and International Trade Commission (ITC) and in specified civil actions if such claims were raised or reasonably could have been raised in the respective reviews that result in a final Board decision. [Another sophisticated and complex provision, which as such, hurts idiots and favors the bigs, since the small guys cannot be expected to know of this while the Biggs will use it, so Bigs & Foreigners +18, Small Guys -9, Idiots-13] Allows any person, at any time, to cite to the USPTO: (1) prior art bearing on the patentability of a claim, and (2) statements of the patent owner filed in a proceeding before a federal court or the USPTO in which the patent owner took a position on the scope of any claim of a particular patent. Requires, on written request of the person citing prior art or written statements, that that person’s identity be kept confidential. [A real shot in the gut to small business, independent inventors and Universities, allowing virtually unlimited numbers of ANONYMOUS challenges both before and after allowance of the patent. Big business can afford this, but it’s no surprise that small guys cannot. Big business will love this provision and it will be the death of patent enforcement by underfunded small inventors and Universities. Idiots will not know to use this complex procedure and will get clobbered by it. This is a 2-point killer to the small guys and idiots, but worth another two points for the Bigs. Bigs & Foreigners +20, Small Guys -11, Idiots-15]

Sec. 7. Patent Trial and Appeal Board. A housekeeping provision to update provisions referring to names of predecessors of current PTAB. So now we will have TTAB for TMs and PTAB for patents. But goes on, setting forth the Board’s required composition and duties. Allows appeals to the U.S. Court of Appeals for the Federal Circuit (CAFC) from specified Board decisions, including examinations, reexaminations, post-grant and inter partes reviews, and derivation proceedings. [If you are a big business, you want the proceedings to be appealable so that they can go on endlessly at great expense while delaying any award of patent damages and thus bury the small guy in expenses with no income, so Bigs & Foreigners +21, Small Guys -12, Idiots-16]. Directs the USPTO to make public data available on the length of time between the institution of, and issuance of a final written decision for, each post-grant and inter partes review. [Favors the bigs, as this is toothless, only a report not any requirement for action, so Bigs & Foreigners +22, Small Guys -12, Idiots-16]

Sec. 8. Preissuance submissions by third parties.  Allows a person who is not the patent owner to request to cancel as unpatentable one or more claims of patent by filing a petition with the U.S. Patent and Trademark Office (USPTO) to institute: (1) post-grant review on any ground that could be raised under specified provisions relating to invalidity of the patent or any claim, and (2) inter partes review (replaces inter partes reexamination procedures) on specified novelty and nonobvious subject matter grounds based on prior art consisting of patents and printed publications. Allows any third party to submit any publication of potential relevance to a patent application . [Guess who’s going to be submitting such stuff! Not the small guy. Favors the bigs, who can afford to defend these proceedings and not the small guys who cannot afford these proceedings, so Bigs & Foreigners +23, Small Guys -13, Idiots-17]

Sec. 9. Venue. [partially gutted.] This was initially a Big Business provision aiming to get suits out of pro-patent venues, but those provisions were eliminated by Congressmen representing those pro-patent venue areas, such as Lamar Smith and the Eastern District of Texas. So now it just provides that since the PTO is in Alexandria, VA, appeals go to the currently fast-moving USDC-VA-E, rather than USDC-DC.  That is, it changes appeals of USPTO decisions from USDC-DC to USDC-VA-E.  [This is not neutral in effect.  It is designed to slow down the rocket docket in the USDC-VA-E by dumping additional patent cases on it. This superficially seems logical since the USPTO has for decades been located across the Potomac in Virginia (first Arlington, VA and now Alexandria, VA) rather than in DC itself and the USDC-VA-E has recognized expertise in patents, is generally pro-patent and has a fast docket.  So, PTO Appeals are likely to get resolved quicker and more expertly.  However, this is a nefarious provision which is (a) an EARMARK for the big Arlington and Alexandria patent firms like Oblon. Spivak et al;  Burns, Doane;  and Orrick et al and a mild loss to Sughrue, Mion and other large DC patent firms that routinely got the appeals to the USDC-DC and (b) an added burden on the USDC-VA-E which infringers hope will clog its docket and slow down the handling of patent infringement cases due to the added number of appeals from USPTO decisions. Biggs & Foreigners +24, Small Guys -13, Idiots-17]

Sec. 10. Fee setting authority. Authorizes the Director, for a six-year period and subject to conditions, to set or adjust by rule any fee established, authorized, or charged by the USPTO under specified federal patent and trademark laws. Requires the Director to notify Congress of (and publish in the Federal Register) certain proposed fee changes. [Let’s see, the director of the patent and trademark office is the former patent manager for IBM, so guess who these  will be slanted towards. While he naturally claims he will be neutral, the 60-day list 5 of the 6 first actions by the PTO are to raise fees and the reduced “micro-entity fees” have been put on hold. The best director IBM can influence takes as his first steps under this bill to start raising fees to squeeze out small businesses and to delay implementation of reduced fees. Well, we know where he stands.  Bigs & Foreigners +25, Small Guys -14, Idiots-18]

Sec. 11. Fees for patent services. Defines the term “micro entity” as a certifying applicant who: (1) qualifies as a small entity as defined in regulations issued by the Director; (2) has not been named as an inventor on more than four previously filed patent applications, as specified; and (3) has gross income below a designated level without having transferred ownership interest in the application to an entity with gross income exceeding such limit. [Note: The PTO has postponed implementation of microentity fees in order to determine who qualifies, even though this section spell it out.] Authorizes the Director to impose income, annual filing, and other micro entity qualification limits under provisions related to public institutions of higher education [i.e. to delay implementation forever while “determining” what should be “imposed” on micro-entities to make such fees seldom if ever available]. Supposed to be enacted immediately, but the Director has used this authority to delay implementation indefinitely while regulations are developed.  [As I told you, these are the strict limitations by which big business makes the micro-entity fees seldom applicable to anyone dealing with patents with any frequency. Favors the bigs, so Bigs & Foreigners 26, Small Guys -14, Idiots-18] Establishes a $400 fee for original patent applications filed non-electronically, to punish any idiots who do so. [In 1790 this fee was $4 so it is now 10,000% higher, in 1970 it was still under $40 , and  since punishing idiots and making patents expensive favors big business and hurts the poor small guy, big fees are made statutory in this big business bill. Favors the bigs and is a loss for small guys, so Bigs & Foreigners 27, Small Guys -15, Idiots-20] Sets forth fees for filing, excess claims, examination, issue, disclaimer, appeal, revival, extension, maintenance, patent search, small entity, national fees (for certain international applications), and other specified fees to further punish idiots. [Oh yes, big business likes a multitude of these and so does the patent office. The more expensive we can make patents, the harder on the small guy and the more impossible for idiots. That’s why it’s in this big business bill. Bigs & Foreigners +26, Small Guys-16, Idiots -21]

Sec. 12. Supplemental examination. Establishes supplemental examinations to consider, reconsider, and correct information. Requires the Director to order reexamination if a substantial new question of patentability is raised by at least one item of information in the request. [As long as we are slanting this Act toward big business, why not have yet another expensive procedure for small inventors to navigate and which big business will be able to use to drive up expenses? However, idiots are winners as this allows them to perhaps correct failures to submit relevant art. Bigs & Foreigners +27, Small Guys -16, Idiots-20]

Sec. 13. Funding agreements. Decreases the percentage of certain invention-related royalties and income that must be paid to the federal government and correspondingly increases the percentage that must be given to small business firms when a nonprofit organization has a funding agreement with the government for the operation of a government-owned, contractor-operated facility. (An existing provision defines the term “funding agreement” as a contract, grant, or cooperative agreement entered into between a federal agency and any contractor for the performance of experimental, developmental, or research work funded in whole or in part by the federal government.) [EARMARK for Lockheed Martin, Halliburton, Boeing, Northrup Grumman, General Dynamics, Alliant Techsystems and other big defense contractors. Favors the bigs who are the only ones that ever operate a GOCO plant, but adds an insignificant token teaser for small business so they can disingenuously say it favors small business. Bigs & Foreigners +28, Small Guys -16, Idiots-20]

Sec. 14. Tax strategies deemed within the prior art. [EARMARK] Deems any strategy for reducing, avoiding, or deferring tax liability insufficient to differentiate a claimed invention from the prior art when evaluating specified conditions of patentability. Do we really want to discourage development of such programs as TurboTax, which millions of Americans use to save taxes and simplify filing? Of course not, so this is just a stupid provision by a patent ignorant senator. If the patent system is desirable to encourage new inventions, why would we want to discourage such inventions just because they relate to tax strategies? Both big business and small business should be opposing this provision, as what stupid special interest will be protected next by excluding that interest from patent protection? Also, while perhaps not unconstitutional, as article 1, section 8, clause 8 of the Constitution is a permissive provision, carving out such special interests provisions greatly supports foreign governments in carving out whatever special interest they may have, such as software or pharmaceuticals that America might want to protect. What a folly!  [ An idiotic provision, an Earmark for Wall Street that hurts everyone else, including big business, so give another one to the “Idiots” and make it now Bigs & Foreigners +27, Small Guys -16, Idiots-19]

Sec. 15. Best mode requirement. Prohibits using a failure to disclose the best mode as a basis on which any claim of a patent may be canceled or held invalid or otherwise unenforceable. This encourages filing of sloppy, half-baked applications and allows Bigs & Foreigners to hide the really good stuff so that they get the patent but don’t really have to disclose their best commercial embodiments. [This is both idiotic and favors the bigs, particularly foreigners, who do not have best mode requirements in their native country. Also favors big business so that they can get patent and yet hide the good stuff so that nobody can effectively compete. In fact, this is so pro-big business that it also deserves two points. It also favors Idiots who fail to put in their best mode through ignorance so we give Idiots another point. It is a wash for the small guy, as it removes a sophisticated trap when rushing to file sloppy applications to be first to file, but the small guy generally only has one or two modes and must usually disclose them anyway to meet enablement requirements.  It is a big win for idiots who don’t know to put in their best mode when drafting patent applications. [Bigs & Foreigners +29, Small Guys -16, Idiots-17]

Sec. 16. Marking.  Attempts to defeat false marking qui tam suits, which is a burgeoning business for contingent fee firms by gutting the plethora (literally thousands) of new qui tam false marking suits which resulted from the CAFC saying damages are $500 per mismarked item rather than $500 per case. If one patent covers the item there is no longer legal “false marking”, even though there is factually false marking. Allows virtual markings (markings that direct the public to a freely-accessible Internet address where a patented article is associated with its patent number) to provide public notice that an article is patented. Requires the Director, within three years, to report to Congress on the ability of the public to obtain information from such virtual marking and related legal issues. [In order to avoid liability for mis-marking and the current multitude of qui-tam suits, big business wants to just refer people to a probably non-informative website that can be easily maintained where all of their patent numbers will be listed, probably without any description of what they relate to, in lieu of patent notices.  So what will the reference look like? Probably something like “May be protected by one or more US patents. See www.hiddenpatentreferences.com.” And, what will the webpage look like? Probably something like “Our products may be covered by one or more of the following patents 1,234,567; 1,234,568, 1,234,569, etc. and others pending or yet to be issued, including published patent applications number xx-xxx,xxx; xx-xxx,xxy; xx-xxx,xxz, etc. and others yet to be published.”  That will conveniently force everyone to review every one of the claims of every one of the patents to know if anything is actually covered. For someone like IBM, that would mean merely searching 73,014 patents with a total of about 2 million claims to find out if one of them covers the product. Unless this spells out with specificity on the web notice for each patent number what products are claimed to be covered, so that they can actually be searched in a reasonable time, patent marking will become totally useless when applied to big business. On the other hand, small business listings,which will have only a very few patents, this will make a website available where big business can go quickly and check out patents. So while sounding great, this is a deceptive provision that so strongly favors the bigs, that we have to give them two more points. It also favors Idiots who are too stupid to correct their patent markings, so Bigs & Foreigners +30, Small Guys -14, Idiots+3] Revises provisions addressing false marking actions to: (1) prohibit anyone other than the United States from suing for the applicable penalty, and (2) allow only a person who has suffered a competitive injury to file a civil action for recovery of damages adequate to compensate for the injury. (Current law allows any person to sue for a penalty of $500 for every such offense, in which event one-half is awarded to the person and one-half to the United States.) [Big business wants to put an end to these “qui-tam marking suits”, so that big business can fraudulently leave patent markings without any reasonable exposure to liability for misleading the public, and present a read any reasonable recovery for the damages caused by false patent marking. Bigs & Foreigners +31, Small Guys -14, Idiots+ 3] Exempts from false marking liability activity engaged in: (1) during the three-year period beginning after the patent expires, or (2) after that three-year period if the word “expired” is placed before the patent identification on either the article or its virtual marking. [Big business wants another nail in the coffin of patent marking suits, by allowing themselves three years of deliberate faults marking. Big business should know when it’s patents are expiring and schedule the adjustment of their markings appropriately in view of such expirations to avoid misleading the public. This provision would actually allow the idiotic self-contradictory marking “covered by expired patent number x,xxx,xxx; x,xxx,xxy; and x,xxx,xxz”   Nothing is covered by an expired patent, so this is a deliberately faults and misleading statement. Of course big business wants this to avoid liability for such false and misleading statements, but is the public really better served by such a fraud? since there are two escape provisions for big business in this item, we give two more points to big business. Since this destroys about a 1000 lawsuits filed by small guys, it is a loss for them. And, of course, idiots are helped because they can screw up patent notices and not be held accountable any longer  Bigs & Foreigners +31, Small Guys -17 Idiots -15]

Sec. 17. Advice of counsel. Bars using an accused infringer’s failure to obtain the advice of counsel to prove that any infringement was willful or induced. [Reports are that Microsoft is instructing its engineers to simply not look for conflicting patents.  This provision is put in to protect that practice, so it is understandable why they and other big businesses who do likewise, would want this provision.  It allows them to avoid punitive damages for deliberately ignoring patents. Even though that is willful, this statute would make such willful activity legally not willful. When slanting a bill so heavily toward big business, why let semantics get in the way? Ugggh…  Also, this is a win for idiots who are too stupid to seek advice of counsel before infringing a patent. This takes away one main ground for punitive damages, which are sometimes vital to small business suits, so we give a double minus to small guys. Bigs & Foreigners +33, Small Guys -19, Idiots -13]

Sec. 18. Transitional program for covered business method patents. [EARMARK] Requires the Director to establish, with specified standards and procedures, a ten-year transitional post-grant review proceeding for reviewing the validity of covered business-method patents (claiming a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except technological inventions). [In simple terms, Wall Street can avoid paying royalties to one particular company, Data Treasury, for such patents.] However since big business is also getting hammered for stealing business method inventions after failing to get the Supreme Court to invalidate all business method patents, this includes the word “other” to help Bigs to kill other similar patents with post-grant review or court challenges. Enacting this big business provision will single out small business patents on business methods for invalidation by introducing yet another expensive and complex proceeding for small businesses to wade through in order to enforce their patents, even after having to wade through all the other onerous provisions that this bill would add. What big business is really trying to do here is move patent litigation into a long, expensive, and complex administrative series of proceedings so that small business can never really get around to enforcing small business patents. [Not satisfied with merely knocking out future business method patents, big business has added this provision to call into question every previous business method patent and require that they be re-examined. So if you are a small business, you can look forward to thousands of dollars of additional expense. If you have several business method patents, make that many thousands of dollars. Not a problem for big business with multimillion dollar patent enforcement budgets, but a huge problem for the small guys. This is bad for idiots who do not know how to avoid business method claims when drafting patent applications. Bigs & Foreigners +35, Small Guys-21, Idiots-14]

Sec. 19. Jurisdiction and procedural matters.  Aims to stop joinder of multiple infringers of a patent in a single case, which is good for judicial economy and good for small businesses who cannot afford suits all over the country, but bad for patent infringers. Provides that allegations  that several defendant have each infringed the same patents are now insufficient for joinder. State courts tend to favor small local businesses so the act amends the federal judicial code to deny state courts jurisdiction over legal actions relating to patents, plant variety protection, or copyrights. To help big business stay out of state courts, the Act grants the CAFC exclusive jurisdiction of appeals relating to patents or plant variety protection. Adds procedural provisions regarding joinder of accused infringers in patent cases. Will hurt any idiots who choose multiple joinders. [ Strongly favor big companies, so Bigs & Foreigners +37, Small Guys-21, Idiots-15] Provides for the removal to a U.S. district court of legal actions involving patents, plant variety protection, or copyrights, and for the remand of unrelated matters. [While we are killing the small guy on utility patents, why not also add plant patents and copyrights and “unrelated matters.”? This bill just gets more and more slanted the further you read. Bigs & Foreigners +38, Small Guys -21, Idiots-15] Requires the CAFC to transfer any appeal concerning designs and unfair competition to the court of appeals for the regional circuit embracing the district from which the appeal has been taken. [Since the CAFC is known to be favorably disposed to enforcement of designs and unfair competition claims, big business would like to move those out of the CAFC into more favorable local forums, such as those downtown courts next to their big business skyscrapers. Bigs & Foreigners+39, Small Guys-21, Idiots-15]

Sec. 20. Technical amendments. Neutral.  These were actually technical amendments and not sneaky tricks. [Bigs & Foreigners+39, Small Guys-21, Idiots-15]

Sec. 21. Travel expenses and payment of administrative judges. Permits the USPTO to pay subsistence and travel-related expenses of persons attending certain USPTO-conducted intellectual property programs who are not federal employees. Authorizes the Director to fix a basic pay rate below a certain level for administrative patent and trademark judges appointed under specified provisions. [Although a minor provision, this provision would allow payment of speaker fees and higher pay for administrative patent and trademark judges. This is one of the few good provisions of the bill and seems to be fairly neutral. Still Bigs & Foreigners+39, Small Guys-21, Idiots-15]

Sec. 22. Patent and Trademark Office funding.  Establishes the USPTO Public Enterprise Fund (replaces the Appropriation Account) as a revolving fund available to the Director without fiscal year limitation. Requires all fees paid to the Director and all appropriations for defraying the costs of USPTO activities to be credited to the Fund. Requires fees charged or established by the Director to be collected by the Director and available to carry out USPTO activities until expended. Directs fees from specified sources to be deposited in the Fund, recorded as offsetting receipts, and available to cover appropriate expenses. [This is the fund that would be set up as a means to capture all PTO revenue and expenses and make a ready fund available for easy diversion by congressional money grabbers eager to fund earmarks in totally unrelated areas by making inventors pay for them. This is an idiotic provision that will obviously run up patent fees and hurt American inventors of all sizes. So, we have to give another point to the idiots. This actually hurts everone, so Bigs & Foreigners +38, Small Guys-22, Idiots -16] Requires the Director to submit an annual report to Congress including: (1) the USPTO’s operating plan, expenses, and staff levels; (2) long term modernization plans and related progress updates; and (3) the results of an annual independent audit of the USPTO’s financial statements required by this section. Requires the Director to annually: (1) notify Congress of its spending plan, and (2) submit to the President a business-type budget as prescribed by regulation for the federal budget. [This annual report is obviously designed to make the PTO budget subject to annual appropriation so that PTO fees can be diverted to earmarks. That hurts everyone. Bigs & Foreigners+37, Small Guys-23, Idiots-17]

Sec. 23. Satellite offices. [EARMARK]  Requires the Director, within a three-year period using specified criteria, to establish at least three U.S. satellite offices for the USPTO and submit a related report to Congress. [The first such office has been designated for Detroit, Michigan. This is a good provision that should make the PTO more accessible to those not located in the weird world of Washington, DC and environs. It should help big business, small business, and idiots alike, so give everyone a point. Bigs & Foreigners +38, Small Guys-22, Idiots -16]

Sec. 24. Designation of Detroit satellite office. [EARMARK] (Sec. 24) Designates the satellite office to be located in Detroit, Michigan, as the “Elijah J. McCoy United States Patent and Trademark Office.” [This was added to “buy” the votes of Michigan Senators and Representatives.  So the Detroit office becomes an earmark for certain politicians to claim in their next election. Assuming that Elijah J. McCoy is a deserving fellow, and recognizing this office has to be located somewhere and Detroit has suffered due to collapse of the American car manufacturers, this Earmark would seem to be neutral. Still Bigs & Foreigners +38, Small Guys-22, Idiots -16]

Sec. 25. Priority examination for important technologies. Authorizes the USPTO to establish regulations providing, at the request of the applicant, prioritized examination of applications for products, processes, or technologies important to the economy or national competitiveness without recovering the aggregate extra cost of providing such prioritization. [Guess who will be getting these priority designations? It’s unlikely the small guy or any idiot will even know they exist, let alone want to pay lobbyists and attorneys to effectively make such a request. This is a 2 pointer that heavily favors big business or rich people in order to allow them to jump the priority of their applications over those of the small guys.  This was the first provision implemented by the PTO, so we know where the PTO is placing its priority – on IBM and others rich applicants. [This onerous provision makes the backlog disproportionately affect small guys. The PTO and IBM can slow down small guys and speed up big business applications and the PTO can say it is attacking the backlog, even though it will just be the big business backlog that is reduced. Now big business is back on its roll with a huge win. Bigs & Foreigners+40, Small Guys -24, Idiots -18]

Sec. 26. Study on implementation. The IBM manager of the Patent Office will conduct a 4 year study of the Act’s effectiveness on US competitiveness.  [So that IBM can use it to push for more “reforms” like in this Act.  Since Big Business, particularly IBM, controls the Director and the Director is doing the study, this is a win for Bigs and a loss for small guys. Bigs & Foreigners +41, Small Guys-25, Idiots-19]

Sec. 27. Study on genetic testing. [EARMARK] This is intended to funnel money to a particular company, picking them as a winner, and to study how to undermine another particular company, picking it as a loser.  This was added to the bill at the last minute by lobbyists. It helps bigs by showing you can get money by lobbying and hurts idiots who do not know how to manipulate the corrupt system we have. [A big business giveaway to pick winners and losers. Bigs & Foreigners +42, Small Guys-25, Idiots-20]

Sec. 28. Patent Ombudsman Program for small business concerns. Big business has no need for an ombudsman because they can hire patent attorneys to work the system.  So, to avoid this having any significant effect, big business wrote this to require the Director to establish a Patent Ombudsman Program using available resources. This was done knowing few such funds will be made available by the Big Business director of the PTO. [Although the Ombudsman has thus far proven just a token and not anything of substantial benefit to small inventors, this is presumably more favorable to small inventors than big business, so we finally get another point for the small guy. This will have little effect on idiots who do not know how to use the program. Bigs & Foreigners +42, Small Guys-24, Idiots -20]

Sec. 29. Establishment of methods for studying the diversity of applicants. [EARMARK] This is an idiotic provision, requiring a study of the effect on diversity of this Act, presumably done by Big Business, and not allowing any action to be taken. [ Bigs & Foreigners +42, Small Guys-24, Idiots-20]

Sec. 30. Sense of Congress. “Sense of Congress” is an oxymoron. This is a hypocritical provision that says small inventors are important to Congress and Congress is out to help small inventors. This statement is a lie since the rest of the bill is entirely pro-big business and is designed to help big business crush small inventors.  However, this provision must be considered favorable to smalls because it can be quoted in challenges to the rest of the bill. [Bigs+42, Smalls-23, Idiots-20]

Sec. 31. USPTO study on international patent protections for small businesses. Requires the Director, within four years, to submit a report to Congress assessing federal patent policies, the implementation of this Act, competitiveness of U.S. markets, and access to capital for investment by small businesses. [Well, this only requires a report which can be, and with competent big business lobbying will be, ignored. Noticed that the report is to be provided by the Director. Again, we point out the fact that the Director of the PTO is the former Director of the IBM patent program. Perhaps the Leopard can really change its spots, but there is at least a reasonable doubt that such will occur. In fact, the report could be damaging to small business if it is slanted to favor big business, as we think the much more lightly outcome will be. So, we have to call this neutral and give no points. Still Bigs+42, Smalls-23, Idiots-20]

Sec. 32. Pro bono program. Directs the Director to support intellectual property law associations in establishing pro bono programs to assist financially under-resourced independent inventors and small businesses. [This is a token gesture without much substance. Intellectual property law associations, which really means the AIPLA, the IP section of the ABA, and the IP sections of the various state bar associations, are predominantly populated by corporate patent attorneys who represent big business. Corporate patent attorneys are notoriously reticent to do pro bono work since it does not serve to advance their corporate careers to spend time helping small inventors. The author of these comments was a corporate patent attorney for 20 years in a Patent Department of 13 patent attorneys, and not only did none of us do any pro bono work, we were all told specifically not to volunteer, because it might take away from our corporate duties and that would be bad for our careers. Still, this has to be said to be more favorable to small business than big business because it now would put a Congressional mandate to help independent inventors and small businesses who are financially under-resourced. Idiots need pro bono assistance to correct their mistakes, so this is good for idiots. Bigs+42, Smalls-23, Idiots-19]

Sec. 33. Limitation on issuance of patents. Prohibits new patents on human organisms. An idiotic provision that will generate all sorts of litigation as to what is a “human organism.”  Is it a human clone, a body part clone, a stem cell, or what? Who knows who wins, so we can’t really award any points to anyone. Bigs+43, Smalls-23, Idiots-19]

Sec. 34. Study of patent litigation. [EARMARK] The GAO is tasked with producing a report in one year saying how bad patent litigation by non-practicing entities (“patent trolls”) has become so that Big Business can get Congress to try to limit non-practicing entities’ rights to try to help big business infringe with impunity any patents owned by such “non-practicing entities”.  This is designed to give IBM, MS, Apple, etc. data at taxpayer expense with which to attack small inventor patents being asserted by NPEs like Acacia, Intellectual Ventures, GPC, etc.  [This is strictly a big business section, and particularly a Big Software and telecom giant EARMARK seeking to pick NPEs (and hence small guys and idiots) as losers and Big Business as winners. Bigs+44, Smalls-24, Idiots-20]].

Sec. 35. Effective date.  Provides that the Act will go into effect in one year, except as specifically noted, such as raising fees to squeeze out smalls.[ A neutral provision, so the points are still Bigs+44, Smalls-24, Idiots-20]

Sec. 36. Budgetary effects. Jibberish reference to “pay-as-you-go”. [Bigs+44, Smalls-23, Idiots-20]

Sec. 37. Calculation of 60-day period for application of patent term extension. [EARMARK] This is a shameful last minute EARMARK snuck in by parliamentary hanky-panky (the author of this Act, Lamar Smith, opposed this provision but Democrats passed it.) This provision is specifically designed to save the Wilmer Hale law firm from a $214M malpractice payment for missing the 60-day application period for patent term extension.  Sen. Sessions proposed an amendment to strip out this earmark, but  the best Senators money can buy left it in so as to be able to more easily pass the other bad provisions they wanted. Result, taxpayers will spend about a Billion dollars extra on the medicine Angiomax in order to bail out Wilmer Hale.  So what this section shows is that if you give Senators enough money they will let you rob taxpayers.[Favor big business, so Bigs+45, Smalls-24, Idiots-21]

OMG the total is Big business+45, Small Business-24, Idiots-21.  So, an objective thorough review of the legislation suggests it is a disgraceful act, clearly designed to distort the patent system to help big business and hurt small business and hurt those “idiots” who are not sufficiently aware of its provisions to use them.  The act basically takes existing rights away from small business and idiots and gives those rights to big business.

So there you have it, this bill scores out to be so heavily slanted towards big business as to really be unconscionable. Do you favor big business like Microsoft and IBM this heavily? Do you want taxpayer money given away as EARMARKS to specific companies, such as a billion dollars to The Medicines Company for Angiomax? This is not a surprising result from the best Congress money can buy and its signing is not surprising from a short-term focused Presidents needing something, anything, to get passed so he can claim it will create jobs.

 

BRUCE BURDICK, Owner & Founder, The Burdick Law Firm, Alton, Illinois (near St. Louis, MO)

Registered Patent Attorney since 1974, IP counsel to small inventors and small business for the last 17 years (1994-present)

Formerly Senior Patent Counsel for Olin Corporation (WINCHESTER® arms & ammunition and Olin HTH® pool chemicals) for 20 years (1974-1994)

President & Founder, The Great Midwest Inventors Club (St. Louis, MO)

Member, The Inventors Association of St. Louis

Past Secretary and Past Acting President, Illinois Innovators & Inventors Association (Edwardsville, IL)

Member of the State Bars of Texas, Illinois & Missouri

Licensed, US Court of Federal Claims & US Court of Appeals for the Federal Circuit

Publisher of the www.burdlaw.com intellectual property portal and burdlaw IP blog

 

 
 

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