Senate Introduces STRONG Patents Act and Focused Patent Reform

Recently, Senators Chris Coons, Dick Durbin, and Mazie Hirono introduced an alternative patent reform legislation to the Innovation Act of 2015. This bill, known as the as Support Technology and Research for Our Nations Grown Patents Act (“STRONG Patents Act”), aims to strengthen the rights of patent holders.

According to Sen. Coons, “[t]he STRONG Patents Act includes targeted thoughtful reforms to combat abuse where it’s prevalent while ensuring our rich innovation ecosystem remains vibrant.” The goal is to “move past the false premise that the only way to deter ‘patent troll’ abuses is to enact sweeping reforms that weaken patent protections for everyone . . . . and [instead we aim] to narrowly target and deter abusive troll behavior while preserving the ability of legitimate patent holders to protect their innovation,” said Senator Durbin.

The key provisions of the bill are:

• Claim Construction during Post Grant Proceedings – The bill proposes that, in a post grant proceeding, each claim should be construed in a manner similar to district courts. Thus, a PTAB panel must construe each claim with “(i) the ordinary and customary meaning of the claim as understood by a person having ordinary skill in the art to which the claimed invention pertains; and (ii) the prosecution history pertaining to the patent” in an inter parties review and post-grant review. This provision would make it more difficult for the Patent Trial and Appeal Board to invalidate patents because the claims would no longer be given their broadest reasonable interpretations.
• Presumption of Validity – The bill proposes application of 35 U.S.C. § 282 to challenged patents in a post-grant proceeding. This would require a PTAB panel to presume challenged patents as being valid. Thus, it would increase the burden for petitioners to prove invalidity with clear and convincing evidence for issued claims and while maintaining the preponderance of evidence burden for amended claims.
• Amendment – The bill would permit patentees involved in inter partes review and post-grant review to amend their patents by: (1) cancelling any challenged patent claims or (2) propose a substitution of claims.
• Standing – The bill raises the standing requirement to file a petition. Under the bill, a person cannot file a petition for inter parties review or post-grant review “unless the person, or real party in interest or privy of the person, has been (1) sued for infringement of the patent; or (2) charged with infringement of the patent.”
• Discovery – Under the rules of discovery, the bill would also explicitly allow parties to discover real parties in interest, potential witnesses, and “what is otherwise necessary in the interest of justice.”
• Separate Judges – The bill would also prohibit a PTAB judge who participates in the decision to grant a post-grant proceedings petition from deciding the merits of the case.
• Form 18 – The bill eliminates Form 18 to the Federal Rules of Civil Procedure, which has been relied upon by some courts to set the standard for pleading patent infringement in federal court. Thus, the bill would seek to remove any perceived conflict between the standard set forth in Form 18 and what has been articulated by the Supreme Court in Twombly and Iqbal.
• Willful Infringement Damages – The bill proposes amending 35 U.S.C. § 284 with respect to damages to add an enhanced damages award (up to three times the determined court or jury determined damages) upon a showing, by a preponderance of the evidence, that the infringement has been willful or done in bad faith.
• “Rogue and Opaque” Demand Letters – The bill would also specify that bad-faith demand letters are unlawful when the sender knowingly, recklessly, or knows with high probability that the statements are false or misleading. Additionally, under Section 5 of Federal Trade Commission (“FTC”) Act, the FTC would have power to enforce the law with a maximum penalty of $5 million. These provisions grant FTC more authority to prosecute those who send fraudulent and/or misleading demand letters, and especially those who do so in bad faith.

Gibbons P.C. will continue to report any developments in the STRONG Patents Act.