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One issue in the original legislation that has led to some divisiveness among industries is the provision that would eliminate a patent holder's right to stop unlicensed groups from practicing his or her inventions, known as injunctive relief. Under current law, if someone is found to be infringing a valid and enforceable patent, the courts can issue an injunction to stop that individual from practicing that invention. The proposed provision would eliminate the injunction and instead put in place a system whereby the infringer would be forced to pay a compulsory licensing fee to continue practicing the invention. COURTESY OF SNELL & WILMER Hauff The proposal as laid out in Smith's original legislation was favored by software and information technology companies, which don't want their products held off the market because of potential patent infringement cases. Pharmaceutical and biotechnology companies, on the other hand, strongly oppose this change because these companies rely on the exclusivity rights that a patent affords as they work to develop and market new drugs. In addition to pharmaceutical and biotech companies, universities also oppose this proposal. "As a practical matter, universities do not manufacture; they simply license and sometimes sell their patented product or spin off companies," explains Michael Kirk, executive director of the American Intellectual Property Law Association (AIPLA), an Arlington, Va.-based national bar association. "It would have hit them particularly hard not to have the normal injunctive rights that they now have under current law," he notes. "Most companies are already in a mode of protecting their inventions not only in the U.S., but abroad. These companies are therefore already operating in a first- to-file system." PHOTO BY DAVID HANSON Kirk FOR THESE GROUPS, according to Kirk, removing the injunctive relief is in essence "destroying the whole meaning of exclusivity of the patent grant." He notes that this measure is absent from the draft substitute bill, and if the latter measure is adopted, that omission would make it more likely to gain broad support. The other contentious issue deals with the details of the establishment of an opposition process to question the validity of a patent after it has been issued in a nonlitigation context, where a lesser degree of evidence would be required as compared with a court proceeding. The legislation sets up an initial challenge window for nine months following the patent issue date--something that is consistent with European and other patent systems--and a second window that allows for challenging the patent in a nonlitigation setting at any time during the lifetime of the patent. It's this second window, or second bite, that has garnered protests. The general idea behind this opposition process is to "limit mistakes made by the U.S. Patent & Trademark Office (PTO) and to allow the public to come in within nine months to a year after the patent grant to correct such mistakes," Kirk explains. But with the second window, which allows an infringer to challenge the validity of a patent for a six-month period after he or she has received notification of the infringement, patent holders can never fully rely on their patents. Having this second window was "more in tune with allowing for mistakes to be corrected later in the life of the patent, which really transforms the post-grant process into more of what one might call a revocation procedure," Kirk notes. "This would be a vehicle to attack a patent throughout its life with an easy and low standard of burden of proof," he says. Kirk also questions how such a system would be assimilated into the PTO's current activities. "The office is struggling with reexamination, and the impact of a post-grant opposition system would be more a complex proceeding," Kirk says, adding his concerns about whether PTO has the staff and resources to take on such a complex system |
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