During the course of our work in the Senate, we have often found ourselves on opposite sides of controversial legislation. While we agree to disagree on some questions that come before the Senate Judiciary Committee, we have long been close partners on intellectual property issues. For several years, modernizing the patent system has been at the front and center of our mutual legislative agenda. Meaningful patent reform is crucial to America’s ability to maintain its competitive edge in the world, and now — after years of careful spadework — Congress has the chance to move forward.
The Patent Reform Act of 2007 (S.1145) is the product of years of deliberation and study within Congress and by many esteemed agencies and institutions, including dozens of hearings with the testimony of scores of witnesses, extensive and substantive mark-up sessions, and hundreds of meetings and discussions with countless stakeholders representing a sweeping array of interests in the patent system.
The Constitution specifically directed Congress to enact a patent law, and Congress has periodically modernized that law over the last two centuries. But the current law was last thoroughly updated more than 50 years ago, and much has changed since then. Think about this: The last time the patent system was significantly changed, the structure of DNA had not been discovered; gasoline was around 27 cents a gallon; and we had not yet sent a man to the moon. Our economy is no longer defined by assembly lines and brick-and-mortar production; we are living in the Information Age, and the products and processes that are being patented are changing as quickly as the times themselves. Unfortunately, Congress has neglected to modernize our patent system to keep pace with the boom in American innovation. Recent Supreme Court decisions have nudged things in the right direction, reflecting the growing sense that questionable patents are too easy to get and too hard to challenge. But the Court is constrained in its decisions by the laws on the books. It is time to dust off and refresh our patent laws.
If we are to maintain our position at the forefront of the global economy and continue to lead the world in innovation and production, we need an efficient and streamlined patent system that issues high-quality patents while limiting wheel spinning and counterproductive litigation. Our bipartisan reform bill is a solid step toward achieving these goals.
In 2003, the Federal Trade Commission reported that patents of questionable validity were inhibiting innovation and competition, harming consumers and businesses and our overall economy. The FTC further found that relying on court battles to challenge questionable patents was unduly costly and cumbersome. To address this problem, our bill would set up an administrative, post-grant review procedure. This would not only cut down on legal costs for the patent holder and the patent challenger, but it would also leave the issue to those best equipped to review patents — the experts at the U.S. Patent and Trademark Office.
We must also restore fairness to the rules that govern how courts determine damages when a patent is infringed. The threat of excessive damages is ruthlessly curtailing progress, and the loss of jobs and innovation is directly linked to litigation costs. But we must be careful to strike the right balance so that violating the intellectual property rights of others does not just become an acceptable cost of doing business. The goal of our reforms is to ensure that patent holders will be able to obtain appropriate compensation in case of infringement.
Under today’s rules, patent cases can be brought virtually anywhere in the country. Plaintiffs can “forum shop,” filing their lawsuits in jurisdictions that have virtually no relevance to the underlying case, but everything to do with where the plaintiff stands the best chance of winning the case. Our bill would prevent this gaming of the system by bringing the standards for selecting venues in line with mainstream jurisprudence.
Another provision to clarify and limit use of the so-called inequitable conduct defense would also bring balance to the patent system. This defense is used to assert that the patent in question was obtained improperly and is, therefore, invalid. It is frequently pled, and when it is misused, it needlessly drives up the cost of litigation.
Senate Majority Leader Harry Reid has committed to taking up S.1145 as early in the new year as possible, and we welcome the continued dialogue on how best to perfect it. Unfortunately, some would like to play political football with the bill to pursue other agendas. We are united in our view that these reforms are far too important to fall prey to such partisan tactics from either side.
As legislators, we know we are headed in the right direction when everyone is complaining that the entire bill is not going their way. We see this as a necessary, albeit somewhat difficult, part of the legislative process. But we welcome it. But at the end of day, we are confident that we will resolve the remaining issues in ways that should make everyone comfortable and will ensure final passage.
The Senate has a tremendous and historic opportunity — and a constitutional responsibility — to further strengthen our nation’s competitiveness through meaningful patent reform. Now is the time.
Sen. Patrick Leahy, Vermont Democrat, is chairman of the Senate Judiciary Committee. Sen. Orrin Hatch, Utah Republican, served as chairman from 1995 to 2001 and from 2003 to 2005.