On June 21, 2017, Sen. Christopher Coons (D-Del) introduced legislation that would limit patent validity challenges at the U.S. Patent and Trademark Office (“PTO”), and strengthen patent owners’ rights in court. The bill is named the Support Technology & Research for Our Nation’s Growth and Economic Resilience Act, or the “STRONGER Patents Act of 2017,” and would remove barriers for patent holders to enforce their patents.
According to the bill, “unintended consequences of the comprehensive 2011 reform of patent laws are continuing to become evident, including the strategic filing of post-grant review proceedings to depress stock prices and extort settlements, the filing of repetitive petitions for inter partes and post-grant reviews that have the effect of harassing patent owners, and the unnecessary duplication of work by the district courts of the United States and the Patent Trial and Appeal Board.” Further, according to the bill, “efforts by Congress to reform the patent system without careful scrutiny create a serious risk of making it more costly and difficult for legitimate innovators to protect their patents from infringement, thereby weakening United States companies and the United States economy.” This bill seeks to address those “unintended consequences” and to make it easier for “legitimate innovators to protect their patents from infringement.”
Currently, when a party is accused of patent infringement, the defendant has multiple means of challenging the validity of the asserted patent, including inter partes review (“IPR”) by the PTO’s Patent Trial and Appeals Board (“PTAB”). Patent owners have complained about the fairness of PTAB proceedings, which can delay litigation or even eliminate the patentee’s claims altogether if the asserted patent claims are held invalid. This bill would allegedly make it easier for patent owners to amend patent claims during a challenge. Under the bill, once a patentee asks to amend the challenged claims, the PTAB would be able to order an “expedited patentability report” from the PTO on the substitute claims.
The bill also seeks to make it more difficult for a challenger to prevail in an IPR. Currently, a party challenging the validity of patent claims in an IPR bears the burden of proving unpatentability by a “preponderance of the evidence,” meaning more likely than not. This bill seeks to heighten that burden to “clear and convincing evidence,” a significantly higher burden of proof currently applied by federal district courts and the International Trade Commission. Currently, because of the different standards of proof, court decisions and PTAB decisions are not binding on each other. See, e.g., Cuozzo Speed Techs., LLC v. Lee, –– U.S. ––, 136 S.Ct. 2131, 2146 (2016) (“As we have explained…, inter partes review imposes a different burden of proof on the challenger. These different evidentiary burdens mean that the possibility of inconsistent results is inherent to Congress'[s] regulatory design.”). This bill would change that, and mandate: “If the validity of a patent claim . . . is finally upheld by a court or the International Trade Commission, as applicable, the [PTAB] shall terminate the [IPR].”
The bill would also block challenges to patent claims that have already been reviewed, with the goal of limiting repetitive attacks on the same patent claims. The bill goes even further to designate anyone contributing to an IPR financially as a “real-party-in-interest,” and therefore barred from challenging the same patent in the future. This provision is meant to address complaints by patent owners that, after they have successfully defended an IPR by one party, they often face another IPR from related parties who did not participate in the first challenge.
The bill also includes language that would give the Federal Trade Commission more authority to pursue those patent holders who send abusive demand letters intended to intimidate small businesses into paying license fees. It also seeks to stop the diversion of the PTO’s current income to other government programs, thus bolstering the PTO’s resources.
The bill also seeks to restore the presumption that a patentee is entitled to an injunction when a patent is found to be valid and infringed. That presumption was previously abrogated by the U.S. Supreme Court in eBay Inc. v. MercExchange LLC, 547 U.S. 388 (2006).
Finally, the bill seeks to amend the current standards for certain categories of patent infringement, as codified at 35 U.S.C. § 271(b), (f) and (j). For example, Section 271(b) currently provides: “Whoever actively induces infringement of a patent shall be liable as an infringer.” The bill seeks to add the requirement “upon a showing that the accused infringer intended to cause the acts that constitute infringement, without regard to whether the accused infringer knew of the patent.” This is a lower standard for patent holders, as the current standard requires that a party accused of inducing infringement have actual knowledge of the patent. See Commil USA, LLC v. Cisco Sys., Inc., 135 S. Ct. 1920, 1926, 191 L. Ed. 2d 883 (2015) (“liability for inducing infringement attaches only if the defendant knew of the patent and that ‘the induced acts constitute patent infringement.’”).