The Senate Judiciary Committee Executive Meeting on the Patent Reform bill presently working its way through the Senate just ended, at approximately 10:30 am. Last week, on Thursday, March 26, 2009, Senator Arlen Specter announced that compromise was close, and that changes to the patent bill would be “very significant.” It would appear as if Senator Specter was not just blowing smoke. This morning Senator Leahy, Senator Specter and Senator Feinstein all agreed that an agreement is very close on all the contentious issues, including patent damages, willful damages, inequitable conduct, best mode, post-grant review, interlocutory appeals and venue. The changes to the patent reform legislation sound extremely significant, and it would seem that patent reform is going to happen and very soon.

Although the agreements were discussed, the specific language has not been announced as yet, but will be forthcoming. Senator Leahy explained that the Senators and their staff are still working over the exact language that will be put in place prior to the next meeting, which will take place on Thursday, April 2, 2009. The language is apparently going to be circulated prior to the next Executive Meeting on Thursday, April 2, 2009, so that the stakeholders can have an opportunity to be heard regarding the changes.

Here are some of the changes that seem to be agreed to by Senators Leahy, Specter and Feinstein:

Senators Specter and Feinstein each explained that the patent damages provisions of the legislation will include a “gatekeeper” provision that will allow parties to submit summary judgment motions on damages, but will not change the existing law. The existing law of damages will be codified.

Senator Specter explained that the best mode requirement will be maintained, but failure to disclose the best mode will not be grounds for invalidating patent claims. If what Senator Specter said relevant to best mode is accurate, this would be a significant departure from current patent law.

According to Senator Specter, universities receiving money under Bayh-Dole will allow universities to keep more royalties.

According to Senator Kyl, who admitted to not having seen any draft language but basing his statements on discussions with staff and other Senators, the post-grant review provisions agreed to by Senators Specter, Leahy and Feinsteing reverts to House language of 2007 on post-grant review, and would require the petitioner to raise only “an interesting question” regarding the patent, rather than a substantial new question of patentability. Senator Kyl further explained that the “interesting question” would not need to be enough to suggest an error in granting the claim in order to institute post-grant review. Senator Kyl said that in discussions with the Patent Office they are quite worried about this because they would have no ability to administer such a review, and would be overwhelmed because virtually every petition would have to be granted.

Senator Kyl also expressed concern that the patent reform legislation that is about to leave the Judiciary Committee does nothing to address problems within the system, namely the real and systemic problems within the Patent Office. He said he was concerned by this because with such sweeping changes to the patent system Congress will likely not take up patent reform any time soon after passage of this bill, and there remains substantial problems facing the Patent Office and the patent system. It is hard to argue with Senator Kyl on this point. I have written in the past that as sweeping as these changes to the patent laws may be, patent reform is simply ignoring the 800 pound gorilla in the room. The Patent Office is dysfunctional and overwhelmed, and it is terrible to think that there will be patent reform without making the patent system any better. Sadly, Senator Kyl is correct.

I agree with Senator Kyl when he says that passage of this patent reform legislation will not solve any problems, and could make the patent system worse in the long run. This is not to suggest that I don’t like any of the reform ideas. I will, like everyone else, need to see the actual language before offering any real or constructive criticism or support. Nevertheless, with so many changes to the patent laws, particularly adding onerous post-grant review to the Patent Office plate, will only make the Patent Office more overwhelmed. This is likely to accelerate the number of rules packages aimed at pushing off work onto applicants, which will have severe consequences for the patent system as a whole, the US economy and innovation. If patent reform also addressed the problems facing the Patent Office, and the problems within the Patent Office, this could be the point in time that we look back on years later as the turning point for the US economy and innovation. Unfortunately, punting on systemic issues facing the Patent Office does not help, and will make things worse.