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Patent Reform Act of 2009 back before Senate Judiciary Committee today to consider compromise

April 02, 2009
Post by Blog Staff

Today at 10:00 Eastern time the Senate Judiciary Committee will hold an executive business meeting to discuss the Patent Reform Act of 2009. The committee will consider some proposed amendments that represent a compromise on several key issues that have been points of contention over the course of the past several years when patent reform has been on the legislative agenda. Among these is the issues of damages, with the compromise version substantially softening the limits on infringement damages that have been dealbreakers in past versions of patent reform legislation.

A webcast of the meeting is available online at this link.

Update (1:45pm): Several amendments were considered at the meeting, with a total of three being adopted either at the meeting or before. The bill has passed out of committee and has been referred to the full Senate. No word on when, if ever, the bill will come up for a vote in the Senate; the Patent Reform Act of 2007 passed the Judiciary Committee easily but was never voted on in the full Senate.

Here are the amendments that were considered and their status:

More detail after the jump.

The original damages provision reads (section 4):

§ 284. Damages

(a) IN GENERAL.—

Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court, subject to the provisions of this section.

The "subject to the provisions of this section" language tied damages to one of (1) the entire market value of the product, but only if the patented feature was the predominant source of demand for the infringing product, (2) royalties previously agreed to by the patentee, or (3) the value of the contribution of the patented invention over the prior art.

The revised damages provision reads (starting on page 1, emphasis added):

§ 284. Damages

(a) IN GENERAL.—

(1) COMPENSATORY DAMAGES AUTHORIZED.—

Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reason able royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court. In determining damages, the court will direct the jury to consider any relevant factors or methodologies, under applicable law, based on the evidence presented.

This modification should substantially remove most of the problems with the previous damages provisions, assuming that courts are free to consider the traditional Georgia-Pacific factors for calculation of a reasonable royalty.

The interlocutory appeal of claim construction orders section is also rewritten, and now provides for interlocutory appeal:

(3) of a final order or decree of a district court determining construction of a patent claim in a civil action for patent infringement under section 271 of title 35, if the district court finds that there is a sufficient evidentiary record and an immediate appeal from the order (A) may materially advance the ultimate termination of the litigation, or (B) will likely control the outcome of the case, unless such certification is clearly erroneous.

This will likely reduce the number of interlocutory appeals of claim construction that would be permitted.

Modifications are also proposed to reexaminations (removing public use and public sale from grounds for reexamination), best mode (removing it as a basis for invalidity), and venue (implementing a convenience test to determine whether a case should be transferred).

The committee previously held its first hearings on the Patent Reform Act on March 10, where it heard testimony from:

Steven R. Appleton (testimony)
Chairman and CEO
Micron Technology, Inc.
Boise, ID

Philip S. Johnson (testimony)
Chief Intellectual Property Counsel
Johnson & Johnson
New Brunswick, NJ

David J. Kappos (testimony)
Vice President and Assistant General Counsel
Intellectual Property Law and Strategy
International Business Machines Corporation
Armonk, NY

Taraneh Maghame (testimony)
Vice President
Tessera, Inc.
San Jose, CA

Herbert C. Wamsley (testimony)
Executive Director
Intellectual Property Owners Association
Washington, DC

Mark A. Lemley (testimony)
William H. Neukom Professor of Law
Stanford Law School
Stanford, CA

Further coverage:


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