Patent Reform Act of 2007


The Patent Reform Act of 2007 was a bill introduced in the 110th United States Congress to introduce changes in United States patent law. Democratic Congressman Howard Berman introduced the House of Representatives bill on April 18, 2007. Democratic Party Senator Patrick Leahy introduced the Senate bill on April 18, 2007. The bill passed the house but died in the Senate.
The bills broadly resembled the proposed Patent Reform Act of 2005 which would have enacted many of the proposals recommended by a 2003 report by the Federal Trade Commission and a 2004 report by the National Academy of Sciences. Similar acts were introduced as the Patent Reform Act of 2009 in the 111th Congress and as the America Invents Act in the 112th.

Proposed changes in U.S. patent law

In certain respects, H.R. 1908 and S. 1145 would have made American patent law more similar to patent laws of many other countries. H.R. 1908 proposed the following changes in U.S. patent law:

Switch from first to invent to first to file

In 2007, the United States was the only country in the world that gave priority to the application that claims the earliest invention date, regardless of which application arrives first. The first-to-invent system is thought to benefit small inventors, who may be less experienced with the patent application system. Critics of the first-to-file system also contend it would create a "race to the mailbox," and would result in sloppier, last-minute patent applications. However, the first-to-invent system requires the United States Patent and Trademark Office to undertake lengthy and complicated "interference" proceedings to try to determine who invented something first when claims conflict. The first-to-file system, supporters contend, would inject much-needed certainty into the patent application process. Finally, because every other country is on a first-to-file system, supporters claim that the majority of patent applicants and attorneys are already operating on a first-to-file basis.

Damages

The version of the bill that passed the House contained dramatic changes to the way damages are determined when a court determines that an accused infringer has indeed infringed.
The bill specifically limited royalty recovery to the "economic value properly attributable to patent's specific contributions over the prior art,"—that is, the inventive portion of the claim, as opposed to the whole claim. The bill additionally required a detailed record to be created of the basis for determining damages, presumably for use during appeal procedures, and finally, the bill created new limitations on when the whole market value of an infringing product was used as the royalty base.

Other proposed provisions

The bill would also have made the following changes:
The House version of the bill passed; the Senate version failed to pass in the 110th Congress. On September 4, 2007 the United States House Committee on the Judiciary reported the bill H.R. 1908, as amended, with the recommendation that it be passed by the House. The House passed the bill by a vote of 220-175 on September 7, 2007. It was favored among Democrats and disfavored among Republicans. The Senate Committee on the Judiciary marked up the bill on June 16, 2007 and ordered the bill reported. The report, S. Rpt. 110-259, was issued on January 24, 2008. The bill stalled and Senate Majority Leader Harry Reid removed it from consideration.

Reactions and lobbying

Yongshun Cheng, former Deputy Director of the IP Division of the Beijing High People's Court, has criticized the bill as being hypocritical. He asserts that the US should not be weakening the rights of US patent holders at the same time it is pressuring the Chinese government to strengthen the rights of Chinese patent holders.
The Indian Pharmaceutical Alliance has pointed out that the provisions of the bill which allow for the validity of a US patent to be challenged shortly after the patent issues, could favor Indian generic drug manufacturers by lowering the cost and legal risks associated with challenging drug patents of questionable validity.