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Provision would allow inventors a new way to challenge legality of issued patents

The Patent Reform Act of 2005, a sweeping set of proposed changes to U.S. patent law, aims to improve patent quality, reduce litigation costs and assimilate America with the rest of the world.

A provision that could accomplish all three is called post-grant opposition.

Common throughout Europe, post-grant opposition allows for the opportunity to challenge the issuance of a patent without the need for a court trial.

Under the proposal, anyone would have nine months after a patent is issued to raise concerns. In addition, there's another six-month window for the person being challenged to respond by questioning the validity of the patent he or she has supposedly infringed upon.

"Essentially it creates an alternative procedure for challenging the validity of an issued patent," said Jon Hangartner, an intellectual property attorney in the San Diego office of Sheppard, Mullin, Richter & Hampton LLP.

"Right now the only way to challenge a patent after issuance is through a re-examination proceeding or through a lawsuit. The lawsuit option is available only if someone asserts you infringed that patent, so that's limited."

This provision has received a mostly favorable reception in the patent world, according to Dr. John Wetherell, a professor of patent law at the University of California, San Diego and a partner with Pillsbury Winthrop Shaw Pittman LLP.

"The idea is examiners are human," he said. "They make mistakes and there are variations from examiner to examiner. It would allow the elimination of weak patents that create a commercial barrier but, if they went to court, they wouldn't hold up."

San Diego's Don Martens, a founding member of IP firm Knobbe, Martens, Olson & Bear LLP, agrees.

"It will have the effect of providing a mechanism for the elimination of patents that clearly should not have been issued," he said, adding, "Re-examination is not nearly as effective for challenging the validity of a patent as post-grant opposition will be."

While post-grant opposition is less expensive and time-consuming than taking a case to court, Hangartner doesn't think the new provision will cause an explosion of challenges.

"The potential for abuse of this process is relatively low," he said.

Post-grant opposition, however, could serve to deter so-called "patent trolls," a term given to companies or individuals who acquire a portfolio of patents with the sole intent of using them for litigation.

With no intention of using their patents for a commercially viable product, these trolls instead look for people who are infringing on their patents and use the patent as leverage to win settlements.

"The patent is a blunt instrument ... a big old stick you can whack people with," Hangartner said. "With the cost of defending against it so high, it often makes no sense for the alleged infringer to fight.

"To the extent the Reform Act makes it less expensive to defend an infringement claim, it will work against patent trolls."

IP attorney James Cleary, a principal with San Diego's Fish & Richardson PC, said some companies have turned patent trolling into an art form, making a handsome profit.

Not all patent trolls are motivated by money, however.

Several small-time inventors can collect a series of patents for the purpose of creating a new product, and the proposed changes could hurt them as well.

It's created some strange bedfellows, with venture capitalist and small inventors aligning in support of strong patent protection.

"There's a group of small inventors who need access to the courts," Hangartner said. "They want to preserve the ability to sue for infringement and not be overwhelmed by a wealthy opponent."

The bill, which is constantly being tweaked by legislators as they prepare for a vote either late this year or in 2006, also contains a provision redefining prior art.

Prior art is technology that exists at the time of the invention. Currently, it must be either something in a patent, in a printed publication, in public use or on sale.

The new statute seeks to narrow the "public use or on sale" provision to require it be publicly known, meaning it's reasonably and effectively accessible through it's use, sale or disclosure by other means.

"Simply having something on sale or in public use ... it began to get vague, especially when you talk about software," Cleary said. "You want prior art to be something that the public has a reasonable way to access."

He said the bill might encourage the disclosure of technology, so it can be protected as prior art.

"It eliminates secret prior art," KMOB's Martens said. "Amazingly, in our present system there is prior art that the public really doesn't know about and has no way of knowing about."

Martens said it could prevent someone from expending lots of money on an invention only to have that invention ruled invalid because it infringes on prior art he or she didn't know about.

"The definition of prior art is critically important in almost all patent cases," Sheppard Mullin's Hangartner said.

Prior art could still be difficult to define in the software industry, Wetherell said, "because unlike biotech, there's not a lot of written prior art. People just (experiment) and come up with a new software program."

Editor's note: This is the second in a three-part series looking at the Patent Reform Act of 2005. Tomorrow's story takes a look at the willfulness test, injunction standard and the elimination of best mode.

Related Article:

Bill proposes sweeping changes to patent law (Aug. 23, 2005)

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