Tuesday, October 1, 2013, by Daniel Parisi
A tornado of patent reform proposals are currently being considered in Congress which pose risks of premature action and dangerous infringement on traditional judicial authority. Congress should take its time and not get swept away. In a keynote speech on September 17, 2013, Honorable Federal Circuit Judge O’Malley warned attendees of the Intellectual Property Owners Association annual meeting that Congress is currently proposing patent reforms that would micromanage litigation and create detailed procedural rules in matters traditionally decided by judges.
Patent reform proposals are falling from the sky including Rep. Goodlatte’s Patent Discussion Draft, Sen. Cornyn’s Patent Abuse Reduction Act, and Reps. Jeffries and Farenthold’s Patent Litigation and Innovation Act. Venable LLP has created a chart with detailed coverage. The patent activist group, the American Hotel and Lodging Association, whose members have been the target of infringement lawsuits, provides another excellent chart.
A tornado of patent reform proposals are currently being considered in Congress which pose risks of premature action and dangerous infringement on traditional judicial authority.
Reform may be premature. These proposals are all in addition to the America Invents Act, passed on September 16, 2011, which overhauled the U.S. patent system switching from a first-to-invent to a first-inventor-to-file system. Major provisions of this act took effect only recently on September 16, 2012, and March 16, 2013. The ink is barely dry and the new procedures such as post-grant review, inter partes review, and covered business method review have only been available for a short period. It is too early to count results. Yet the tornado swirls.
The patent reform proposals come perilously close to infringing on an independent judiciary. The proposals single out patent litigation and create detailed procedural rules governing pleadings, discovery, bonds, sanctions, attorney’s fees, joinder, and other similar matters. These matters are usually governed by the Federal Rules of Civil Procedure and managed by judges based on the merits of individual cases.
Procedural rules are normally created by a rules committee that carefully evaluates proposals and adopts rules under the Rules Enabling Act. Congress delegated rulemaking authority to the Supreme Court to achieve the benefits of long-term rule stability, rules based on judicial experience, and decisions made free from the pressures of elections, lobbyists, and special interest groups.
Judge O’Malley noted that it can be hard being the judiciary with the executive and legislative branches around. “A senior senator — who shall remain nameless — appeared on CNN back in January, looked at the camera, and said: We have three branches of government. We have the executive; we have the House; and we have the Senate. (Laughter).” This gaffe recounted by Judge O’Malley says a lot about the potential for overreach. Judge O’Malley identifies the slippery slope. If Congress inserts its heavy hand into the courtroom regarding procedural matters in patent litigation, what area of law is next?
Intellectual property owners and Congress are understandably concerned about abusive litigation practices and the cost of discovery and trials. However, procedural matters often require judicial discretion in individual cases to reach proper and just results. The initial results of the America Invents Act are not even counted yet. Congress should take its time and make sure that its intervention and new procedural rules are truly needed.