Right blend of protections

It has been more than 50 years since the nation’s patent laws were significantly updated, and in that time, the form of American innovation that creates jobs and drives our economy has changed. It is well past time that Congress modernize our patent laws.

The United States Patent and Trademark Office (PTO) is becoming overloaded as a result of changes in innovation. The dramatic increase in patent applications since Congress last updated the patent laws in 1952 is putting a tremendous strain on the office, and the resulting backlog of applications and long pendency rates create impediments for inventors. It also results in too many low-quality patents being issued that are too easy to obtain and too costly to challenge. Low-quality patents are a burden on the system and impede our economic growth and technological progress. Congress should not delay in addressing these issues.

Since the debate over how to modernize our patent system began in earnest in the 109th Congress, the Supreme Court has reversed the Federal Circuit in five important cases, and has recently agreed to hear a sixth. The Court’s decisions reflect the concerns heard in Congress and have moved the law in a positive direction, more closely aligned with the text of the statutes. Its decisions will improve patent quality, make the determination of patent infringement in court more efficient, and improve the law of remedies. And we have not heard the last word from the Supreme Court on these issues.

But many of the changes that are needed in the antiquated patent system must be made by Congress. Enacting the Patent Reform Act of 2009 is the first step.

The United States is the only industrialized nation that uses a subjective, first-to-invent system rather than an objective, first-to-file system for determining who is entitled to a patent on an invention when more than one application claiming the same invention is filed. As business and competition become more global, patent applicants are increasingly filing patent applications in other countries to protect their inventions. Both systems have advantages, and the Patent Reform Act draws on the best features of both in creating a first-inventor-to-file system. This new system provides the efficiencies of the first-to-file system, while ensuring that a person will not be able to obtain a patent for an invention that person did not actually invent.

The Patent Reform Act also provides a more efficient and usable process to challenge the validity of patents that should not have issued. Currently, a patent may be challenged in court or through a reexamination process at the PTO. The former is expensive and inefficient; the latter has structural problems that make it cumbersome and rarely used. The Patent Reform Act addresses impediments to using administrative proceedings, which will weed out bad patents and provide more confidence in the strength of those patents that remain.

Importantly, the Patent Reform Act provides procedural protections in damages calculations. The current damage statute is vague, and juries are too often given too little guidance in determining a reasonable royalty. The Act will require courts to provide better direction to juries, which will improve the consistency of awards and establish a more complete record for appeal. This change represents a positive step forward, while issues surrounding the substantive law of damages continue to play out in the courts.

Ultimately, improving our patent system requires the work of all three branches of government. The Supreme Court has been, and will continue to be, involved, and Congress can make many of the needed statutory fixes this year. But we should be under no illusion that the actions of Congress and the courts will be sufficient. Patent quality begins at the PTO.

Today, the PTO has a significant backlog and faces serious challenges as a result of the difficult economic environment. Those on all sides of the patent reform debate want to ensure that the PTO has the resources and leadership it needs to operate effectively. I look forward to working with David Kappos, President Obama’s nominee to head the PTO, on these important issues.

Patent reform is ultimately about economic development. It is about jobs, it is about innovation, and it is about consumers. All benefit under a patent system that reduces unnecessary costs, removes inefficiencies, and holds true to the vision of our Founders that Congress should establish a national policy that promotes the progress of science and the useful arts.

If we are to maintain our position at the forefront of the world’s economy, if we are to continue to lead the world in innovation and production, and if we are to continue to benefit from the ideas of the most creative citizens, then we must have a patent system that produces high-quality patents, that limits counterproductive litigation over those patents, and that makes the entire system more streamlined and efficient.

Reforming our patent system will stimulate the American economy through structural changes, rather than taxpayer dollars. At a time when we are taking significant steps to restore and revitalize our economy, Congress should do its part and pass the Patent Reform Act without delay.

Leahy is the chairman of the
Senate Judiciary Committee and co-author of the Patent Reform Act of 2009.