Calling On Congress to “Rally” The Patent System

According to a report from the Center for the Protection of Intellectual Property, Kentucky Congressman Thomas Massie has introduced the Restoring America’s Leadership in Innovation Act of 2018 (possibly RALI–pronounced “rally”?). H.R. 6264 will reportedly abolish the patent-killing PTAB, confirm patent eligibility of critical innovations called into question after Alice, and reverse the reasoning in Oil States to restore property rights status to patents. A few of the highlights, according to the CPIP’s article, include the following:

  • Section 3 (the first substantive section), returns the United States to a first to invent patent system. As noted by CPIP Founder Adam Mossoff, giving patents to the first inventor rewards the intellectual labor that results in the invention. This conception of patents as private property rights protecting the innovator’s creation is arguably required by the Patent Clause of the Constitution, and thus, this Act will bring patent laws back within constitutional limits. Conversely, a first to file system merely rewards those who can win a race to the Patent Office.
  • Section 4 abolishes Inter Partes Review (IPR) and Post-Grant Review (PGR). In addition to covered business method review, which was created with a sunset provision, these procedures allow the Patent Office to cancel at patent it has previously issued. Numerous scholars have identified the substantial harms caused by the PTAB. The problems have been so extensive that other legislationfocused on trying to fix these procedures has been introduced. This bill goes the necessary next step. Because these procedures fundamentally undermine the status of patents as private property, the bill eliminates IPR and PGR entirely.

  • Section 6 eliminates fee diversion and provides for full funding of the USPTO. Innovators and the public alike count on the USPTO to perform timely, quality examinations of patent applications in the first instance. Ensuring that adequate resources are available for this purpose is essential, particularly given that applicants pay fees to the USPTO for precisely this purpose.
  • Section 7 confirms the patentability of scientific discoveries and software. Although not explicitly stated, it will also allow for the patentability of medical diagnostics and innovative pharmaceuticals, which have been threatened by broad interpretations of Mayo and Myriad. The legislation largely adopts the language of recent proposals by the Intellectual Property Owners Association and American Intellectual Property Lawyers Association. It explicitly states that it “effectively abrogates” Alice and related Supreme Court opinions on patent eligibility. This is a change advocated by many scholars, including those at CPIP and elsewhere, and will restore the United States to the “gold standard” of patent systems.

  • Section 9 reestablishes the previously long-held status of patents as a property right. The Constitution secures a patent as a property right and many scholars have noted the important implications of treating patents as property. This section not only states that a patent is a property right, but confirms that a patent may only be revoked in a judicial proceeding, which has substantial benefits, unless the patent owner consents to another procedure. This reverses the broad reasoning in Oil States. The parts of this section returning to patent owners the right to control their property also largely overturn Impression Products v. Lexmark International, now allowing patent owners to exclude unlicensed users from their supply chains.

Read the full summary.

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