On June 25, 2020, United States Representative Thomas Massie (a Republican representing Kentucky’s District Four) introduced in the United States House of Representatives a bill titled “Restoring America’s Leadership in Innovation Act of 2020” (also referred to as H.R. 7366).
If enacted into law, H.R. 7366 would repeal the “first-to-file” system under the America Invents Act and revert the filing system back to the “first-to-invent” system which was in place before the signing of the America Invents Act on September 16, 2011. Under the “first-to-invent” system described in H.R. 7366, a person will be entitled to a patent where the inventor is first to conceive of the invention and diligently reduces the invention to practice.
According to the bill’s author, the justification for the proposed change in the United States patent filing system is that restoring the one-year grace period before the first and true inventor must file a patent application on an invention will promote the progress of science and useful arts by enabling inventors once again to disclose inventions in order to attract investment, complete research and development on the invention, test, improve, and perfect the invention so as to improve the invention and the quality of the patent application.
H.R. 7366 would also repeal inter partes review and post-grant review proceedings, but would preserve ex parte reexamination proceedings. The justification provided by the author of the bill for this proposed change is that inter partes review and post-grant review proceedings introduced by the America Invents Act have harmed the progress of science and the useful arts by subjecting inventors to serial challenges to patents. Moreover, the bill’s author asserts that inter partes review and post-grant review proceedings invalidate patents at an unreasonably high rate. According to the bill author, patent rights should be protected from unfair adjudication at the Patent and Trademark Office and duly issued patents should be adjudicated in a judicial proceeding.
The bill would also abolish the Patent Trial and Appeal Board and establish in its place an entity titled Board of Patent Appeals and Interferences. The Director, the Deputy Director, the Commissioner for Patents, the Commissioner for Trademarks, and administrative patent judges will constitute the Board. The administrative patent judges will be persons of compete legal knowledge and scientific ability who are appointed by the Secretary of Commerce, in consultation with the Director. The bill indicates that it is the sense of Congress that, unless otherwise in the context of an ex parte reexamination, the Board of Patent Appeals and Interferences will not be used to invalidate an already issued patent. According to the bill’s author, the changes described will protect the rights of patent owners who have been granted a patent and ensure a fair, fully adjudicated proceeding to invalidate an issued patent.
The bill would eliminate fee diversion and full funding of the United States Patent and Trademark Office. The bill would establish in the Treasure a revolving fund to be known as the “United States Patent and Trademark Office Innovation Promotion Fund.”
The bill proposes that Section 101 of title 35 of the United States Code would read as follows:
§ 101. Inventions patentable
“(a) In General.—Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.
“(b) Exception.—A claimed invention is ineligible patent subject matter under subsection (a) if the claimed invention as a whole, as understood by a person having ordinary skill in the art, exists in nature independently of and prior to any human activity, or exists solely in the human mind.
“(c) Eligibility Standard.—The eligibility of a claimed invention under subsections (a) and (b) shall be determined without regard as to the requirements or conditions of sections 102, 103, and 112 of this title, or the claimed invention’s inventive concept.”
The bill indicates that it is the sense of Congress that the Supreme Court’s recent jurisprudence concerning subject matter patentability has harmed the progress of science and the useful arts. It is also the sense of Congress that the United States patent system must protect and encourage research and development in such scientific disciplines as would promote the progress of science and the useful arts by securing for limited times to inventors the exclusive rights to their discoveries and provide scientists in the life sciences, computer sciences, and other disciplines, with certainty that their discoveries and inventions are entitled to patent protection.
Further, the amendment to Section 101 effectively abrogates Alice Corp. v. CLS Bank International, 134 S. Ct. 2347 (2014) and its predecessors to ensure that life sciences discoveries, computer software, and similar inventions and discoveries are patentable, and that those patents are enforceable.
The bill amends Section 102 of title 35 regarding conditions for patentability and novelty.
The bill would amend title 35 by adding a new section that restores patents as a property right. The amendment stems from the sense of Congress that the recent jurisprudence of the United States Supreme Court, including Impression Products, Inc. v. Lexmark International, Inc., have harmed the progress of science and the useful arts by limiting the ability of patent owners to exclude unlicensed customers from their supply chains. Moreover, the bill provides that meaningful patent rights must permit patent owners to freely assign their rights in whole, or in part, and to ensure that successors, heirs, or assigns of a patent owner, or their assigns, are duly bound by restrictions or exclusions set by patent owners on the use of their property.
H.R. 7366 would end the automatic publication of patent applications. In particular, each application for a patent will be published, in accordance with procedures determined by the Director, only upon the request of the patent applicant, and no information concerning a patent application will be available to the public unless and until a patent issues. The bill’s author has asserted that it is the sense of Congress that automatic publication of patent application after 18 months has harmed the progress of science and the useful arts by creating “prior art” by operation of law that prevents a patent owner from applying for a patent on the same invention if a patent does not issue. Moreover, automatic publication of patent applications encourages early disclosure of claimed inventions and subjects innovative inventions and discoveries reduced to practice in the United States to theft or appropriation by foreign competitors.
H.R. 7366 proposes amending Section 282(a) of title 35 to provide that in any judicial or administrative proceeding conducted in any court or Federal agency or of any State, a patent issued under this title will be presumed valid. Further, the bill provides that in any proceeding in which the validity of a patent is at issue, the burden of establishing invalidity of a patent or any claim thereof rests on the party asserting the invalidity by clear and convincing evidence.
In an action involving a patent where the validity of the patent has been challenged, the patent term shall be tolled from the time the validity of the patent is challenged to the time of resolution of the validity issue by the court. The patent term shall resume once the validity challenge is resolved. The court may award damages to the patent owner in a case in which another party brought a validity claim against the patent in bad faith.
Upon a finding of infringement of a patent, the court shall presume that further infringement of the patent would cause the patent owner irreparable harm. This presumption may be overcome only by a showing of clear and convincing evidence by the infringing party that the patent owner would not be irreparably harmed by further infringement of the patent. The patent owner is not required to make or sell a product covered by the patent to show irreparable harm. A ‘patent owner’ means the owner of the patent or an exclusive licensee of the patent.”.
Lastly, H.R. 7366 would repeal Section 15 of the Leahy-Smith America Invents Act which provides that invalidity of the patent or any claim in suit for failure to comply with any requirement of section 112, except that the failure to disclose the best mode shall not be a basis on which any claim of a patent may be canceled or held invalid or otherwise unenforceable.
The bill was co-sponsored by Representative Tom McClintock (a Republican, representing California’s District Four) and Representative Paul Gosar (a Republican, representing Arizona’s District Four).
The bill has been referred to the United States House Committee on the Judiciary.