Order Code RL32996
CRS Report for Congress
Received through the CRS Web
Patent Reform: Innovation Issues
Updated July 16, 2005
Wendy H. Schacht
Specialist in Science and Technology
Resources, Science, and Industry Division
John R. Thomas
Visiting Scholar
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

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Patents Reform: Innovation Issues
Summary
Congressional interest in patent policy and possible patent reform has expanded
as the importance of intellectual property to innovation has increased. Patent
ownership is perceived as an incentive to the technological advancement that leads
to economic growth. However, growing interest in patents has been accompanied by
persistent concerns about the fairness and effectiveness of the current system. Several
recent studies, including those by the National Academy of Sciences and the Federal
Trade Commission, have recommended patent reform to address perceived
deficiencies in the operation of the patent regime. Other experts maintain that major
alterations in existing law are unnecessary and that the patent process can, and is,
adapting to technological progress.
The Patent Act of 2005, H.R. 2795, introduced in June 2005, would work
significant legal reforms to the patent system. Among the more notable of these
changes are a shift to a first-inventor-to-file priority system; substantive and
procedural modifications to the patent law doctrines of willful infringement and
inequitable conduct; and adoption of post-issuance opposition proceedings, prior user
rights, and pre-issuance publication of all pending applications. Several of these
proposals have been the subject of discussion within the patent community for many
years, but others are more novel propositions.
Pending legislation attempts to address several issues of concern including the
quality of issued patents, the expense and complexity of patent litigation,
harmonization of U.S. patent law with the laws of our leading trading partners,
potential abuses committed by patent speculators, and the special needs of individual
inventors, universities, and small firms with respect to the patent system. In addition,
although the existing patent statute in large measure applies the same basic rules to
different sorts of inventions, regardless of the technological field of that invention,
the patent system is widely believed to impact different industries in varying ways.
The provisions of H.R. 2795 would arguably work the most sweeping reforms
to the U.S. patent system since the nineteenth century. However, many of these
proposals, such as pre-issuance publication, prior user rights, and oppositions, have
already been implemented in U.S. law to a more limited extent. These and other
reforms, such as the first-inventor-to-file priority system and elimination of the best
mode requirement, also reflect the decades-old patent practices of Europe, Japan, and
our other leading trading partners.
Other knowledgeable observers are nonetheless concerned that certain of these
proposals would weaken the patent right, thereby diminishing needed incentives for
innovation. Some also believe that changes of this magnitude, occurring at the same
time, do not present the most prudent course for the patent system. Patent reform
therefore confronts Congress with difficult legal, practical, and policy issues, but also
with apparent possibilities for altering and possibly improving the legal regime that
has long been recognized as an engine of innovation within the U.S. economy.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Patents and Innovation Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The Mechanics of the Patent System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Innovation Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Current Issues and Concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Patent Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Litigation Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
International Harmonization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Potential Abuses of Patent Speculators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
The Role of Individuals, Universities and Small Entities . . . . . . . . . . . . . . 10
Different Roles for Patents in Distinct Industries . . . . . . . . . . . . . . . . . . . . 12
Proposed Legislative Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
First Inventor to File . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Grace Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Elimination of Sections 102(c), (d) and (f) . . . . . . . . . . . . . . . . . . . . . . . . . 18
Assignee Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Elimination of the Best Mode Requirement . . . . . . . . . . . . . . . . . . . . . . . . 21
Inequitable Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Publication of Pending Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Pre-Issuance Submissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Continuation Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Prior User Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Injunctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Limitation Upon Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Willful Infringement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Post-Issuance Opposition Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Concluding Observations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
This report was funded in part by a grant from the John D. and Catherine T.
MacArthur Foundation

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Patent Reform: Innovation Issues
Introduction
Congressional interest in patent reform has increased as the patent system
becomes more significant to U.S. industry. There is broad agreement that more
patents are sought and enforced then ever before; that the attention paid to patents in
business transactions and corporate boardrooms has dramatically increased; and that
the commercial and social significance of patent grants, licenses, judgments, and
settlements is at an all-time high.1 As the United States becomes even more of a
high-technology, knowledge-based economy, the importance of patents may grow
even further in the future.
Increasing interest in patents has been accompanied by persistent concerns about
the fairness and effectiveness of the current system. Several recent studies, including
those by the National Academy of Sciences and the Federal Trade Commission, have
recommended patent reform to address perceived deficiencies in the operation of the
patent regime.2 Other experts maintain that major alterations in existing law are
unnecessary and that the patent process can, and is, adapting to technological
progress.
In June 2005, legislation was introduced that attempts to respond to current
concerns about the functioning of the patent process. The Patent Act of 2005, H.R.
2795, proposes significant legal reforms to the patent system, including a shift to a
first-inventor-to-file priority system; substantive and procedural modifications to the
patent law doctrines of willful infringement and inequitable conduct; and adoption
of post-issuance opposition proceedings, prior user rights, and pre-issuance
publication of all pending applications. Several of these proposals have been the
subject of discussion within the patent community for many years, but others are
more novel propositions.
This report provides an overview of current patent reform issues. It begins by
offering a summary of the structure of the current patent system and the role of
1 Statistics from the United States Patent and Trademark Office (USPTO) support this
account. In 1980, the USPTO received 104,329 utility patent applications; by 2003, this
number had grown to 342,441 applications. During the same time period, the number of
U.S. patents granted on an annual basis grew from 61,810 to 169,028. U.S. Patent and
Trademark Office, U.S. Patent Statistics, Calendar Years 1863 - 2003 [available at
[http://www.uspto.gov]].
2 National Research Council, National Academy of Sciences, A Patent System for the 21st
Century, [Washington, National Academies Press, 2004] and Federal Trade Commission,
To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy,
October 2003, available at [http://www.ftc.gov].

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patents in innovation policy. The report then reviews some of the broader issues and
concerns, including patent quality, the high costs of patent litigation, international
harmonization, and speculation in patents, that have motivated H.R. 2795’s diverse
reform proposals. The specific components of this legislation are then identified and
reviewed in greater detail.
Patents and Innovation Policy
The Mechanics of the Patent System
The patent system is grounded in Article I, Section 8, Clause 8 of the U.S.
Constitution, which states that “The Congress Shall Have Power . . . To promote the
Progress of Science and useful Arts, by securing for limited Times to Authors and
Inventors the exclusive Right to their respective Writings and Discoveries . . . .” As
mandated by the Patent Act of 1952,3 U.S. patent rights do not arise automatically.
Inventors must prepare and submit applications to the U.S. Patent and Trademark
Office (USPTO) if they wish to obtain patent protection.4 USPTO officials known
as examiners then assess whether the application merits the award of a patent.5 The
patent acquisition process is commonly known as “prosecution.”6
In deciding whether to approve a patent application, a USPTO examiner will
consider whether the submitted application fully discloses and distinctly claims the
invention.7 In addition, the application must disclose the “best mode,” or preferred
way, that the applicant knows to practice the invention.8 The examiner will also
determine whether the invention itself fulfills certain substantive standards set by the
patent statute. To be patentable, an invention must be useful, novel and nonobvious.
The requirement of usefulness, or utility, is satisfied if the invention is operable and
provides a tangible benefit.9 To be judged novel, the invention must not be fully
anticipated by a prior patent, publication or other knowledge within the public
domain.10 A nonobvious invention must not have been readily within the ordinary
skills of a competent artisan at the time the invention was made.11
If the USPTO allows the patent to issue, the patent proprietor obtains the right
to exclude others from making, using, selling, offering to sell or importing into the
3 P.L. 82-593, 66 Stat. 792 (codified at Title 35 United States Code).
4 35 U.S.C. § 111.
5 35 U.S.C. § 131.
6 John R. Thomas, “On Preparatory Texts and Proprietary Technologies: The Place of
Prosecution Histories in Patent Claim Interpretation,” 47 UCLA Law Review (1999), 183.
7 35 U.S.C. § 112.
8 Ibid.
9 35 U.S.C. § 101.
10 35 U.S.C. § 102.
11 35 U.S.C. § 103.

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United States the patented invention.12 Those who engage in these acts without the
permission of the patentee during the term of the patent can be held liable for
infringement. Adjudicated infringers may be enjoined from further infringing acts.13
The patent statute also provides for the award of damages “adequate to compensate
for the infringement, but in no event less than a reasonable royalty for the use made
of the invention by the infringer.”14
The maximum term of patent protection is ordinarily set at 20 years from the
date the application is filed.15 At the end of that period, others may employ that
invention without regard to the expired patent.
Patent rights are not self-enforcing. Patentees who wish to compel others to
observe their rights must commence enforcement proceedings, which most
commonly consist of litigation in the federal courts. Although issued patents enjoy
a presumption of validity, accused infringers may assert that a patent is invalid or
unenforceable on a number of grounds.16 The U.S. Court of Appeals for the Federal
Circuit (Federal Circuit) possesses national jurisdiction over most patent appeals
from the district courts.17 The U.S. Supreme Court enjoys discretionary authority to
review cases decided by the Court of Appeals for the Federal Circuit.18
Innovation Policy
Patent ownership is perceived to be an incentive to innovation, the basis for the
technological advancement that contributes to economic growth. It is through the
commercialization and use of new products and processes that productivity gains are
made and the scope and quality of goods and services are expanded. Award of a
patent is intended to stimulate the investment necessary to develop an idea and bring
it to the marketplace embodied in a product or process. Patent title provides the
recipient with a limited-time monopoly over the use of his discovery in exchange for
the public dissemination of information contained in the patent application. This is
intended to permit the inventor to receive a return on the expenditure of resources
leading to the discovery but does not guarantee that the patent will generate
commercial benefits. The requirement for publication of the patent is expected to
stimulate additional innovation and other creative means to meet similar and
expanded demands in the marketplace.
12 35 U.S.C. § 271(a).
13 35 U.S.C. § 283.
14 35 U.S.C. § 284.
15 35 U.S.C. § 154(a)(2). Although patent term is based upon the filing date, the patentee
gains no enforceable legal rights until the USPTO allows the application to issue as a
granted patent. A number of Patent Act provisions may modify the basic 20-year term,
including examination delays at the USPTO and delays in obtaining marketing approval for
the patented invention from other federal agencies.
16 35 U.S.C. § 282.
17 28 U.S.C. § 1295(a)(1).
18 28 U.S.C. § 1254(1).

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Innovation produces new knowledge. One characteristic of this knowledge is
that it is a “public good,” a good that is not consumed when it is used. This “public
good” concept underlies the U.S. patent system. Absent a patent system, “free riders”
could easily duplicate and exploit the inventions of others. Further, because they
incurred no cost to develop and perfect the technology involved, copyists could
undersell the original inventor. The resulting inability of inventors to capitalize on
their inventions would lead to an environment where too few inventions are made.19
The patent system corrects this market failure problem by providing innovators with
an exclusive interest in their inventions, thereby allowing them to capture its
marketplace value.
The regime of patents purportedly serves other goals as well. The patent system
encourages the disclosure of products and processes, for each issued patent must
include a description sufficient to enable skilled artisans to practice the patented
invention.20 At the close of the patent’s twenty-year term,21 others may practice the
claimed invention without regard to the expired patent. In this manner the patent
system ultimately contributes to the growth of the public domain.
Even during their term, issued patents may also encourage others to “invent
around” the patentee’s proprietary interest. A patentee may point the way to new
products, markets, economies of production and even entire industries. Others can
build upon the disclosure of a patent instrument to produce their own technologies
that fall outside the exclusive rights associated with the patent.22
The patent system has also been identified as a facilitator of markets. Absent
patent rights, an inventor may have scant tangible assets to sell or license. In
addition, an inventor might otherwise be unable to police the conduct of a contracting
party. Any technology or know-how that has been disclosed to a prospective licensee
might be appropriated without compensation to the inventor. The availability of
patent protection decreases the ability of contracting parties to engage in
opportunistic behavior. By lowering such transaction costs, the patent system may
make technology-based transactions more feasible.23
Through these mechanisms, the patent system can act in more socially desirable
ways than its chief legal alternative, trade secret protection. Trade secrecy guards
against the improper appropriation of valuable, commercially useful and secret
information. In contrast to patenting, trade secret protection does not result in the
disclosure of publicly valuable information. That is because an enterprise must take
reasonable measures to keep secret the information for which trade secret protection
is sought. Taking the steps necessary to maintain secrecy, such as implementing
19See Rebecca S. Eisenberg, “Patents and the Progress of Science: Exclusive Rights and
Experimental Use,” 56 University of Chicago Law Review 1017 (1989).
20 35 U.S.C. § 112.
21 35 U.S.C. § 154.
22 Eisenberg, supra, at 1017.
23 Robert P. Merges, “Intellectual Property and the Costs of Commercial Exchange: A
Review Essay,” 93 Michigan Law Review (1995), 1570.

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physical security measures, also imposes costs that may ultimately be unproductive
for society.24
The patent system has long been subject to criticism, however. Some observers
have asserted that the patent system is unnecessary due to market forces that already
suffice to create an optimal level of innovation. The desire to obtain a lead time
advantage over competitors, as well as the recognition that technologically backward
firms lose out to their rivals, may well provide sufficient inducement to invent
without the need for further incentives.25 Other commentators believe that the patent
system encourages industry concentration and presents a barrier to entry in some
markets.26 Still other observers believe that the patent system too frequently attracts
speculators who prefer to acquire and enforce patents rather than engage in socially
productive activity.27
When analyzing the validity of these competing views, it is important to note
the lack of rigorous analytical methods available for studying the effect of the patent
law upon the U.S. economy as a whole. The relationship between innovation and
patent rights remains poorly understood. As a result, current economic and policy
tools do not allow us to calibrate the patent system precisely in order to produce an
optimal level of investment in innovation. Thus, each of the arguments for and
against the patent system remains open to challenge by those who are unpersuaded
by their internal logic.
Current Issues and Concerns
Pending legislation proposes a number of changes to diverse aspects of the
patent system. Although these reforms are undoubtedly motivated by a range of
concerns, a discrete number of issues have been the subject of persistent discussion
in the patent community over a period of many years. Among these issues are
concern for the quality of issued patents, the expense and complexity of patent
litigation, harmonization of U.S. patent law with the laws of our leading trading
partners, potential abuses committed by patent speculators, and the special needs of
individual inventors, universities, and small firms with respect to the patent system.
In addition, although the patent statute in large measure applies the same basic rules
to different sorts of inventions, regardless of the technological field of that invention,
the patent system is widely believed to impact different industries in varying ways.28
As a result, different industries can be expected to espouse different views of certain
24 David D. Friedman et al., “Some Economics of Trade Secret Law,” 5 Journal of
Economic Perspectives (1991), 61.
25 See Frederic M. Sherer, Industrial Market Structure and Economic Performance (1970),
384-87.
26 See John R. Thomas, “Collusion and Collective Action in the Patent System: A Proposal
for Patent Bounties,” University of Illinois Law Review (2001), 305.
27 Ibid.
28 See Dan L. Burk & Mark A. Lemley, “Is Patent Law Technology-Specific?,” 17 Berkeley
Technology Law Journal (2002), 1155.

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patent reform proposals. Before turning to a more specific analysis of individual
legislative proposals, this report reviews the proposed legislation’s broader themes
with regard to these issues and concerns.
Patent Quality
Government, industry, academia and the patent bar alike have long insisted that
the USPTO approve only those patent applications that describe and claim a
patentable advance.29 Because they meet all the requirements imposed by the patent
laws, quality patents may be dependably enforced in court and employed as a
technology transfer tool. Such patents are said to confirm private rights by making
their proprietary uses, and therefore their value, more predictable. Quality patents
also may clarify the extent that others may approach the protected invention without
infringing. These traits in turn should strengthen the incentives of private actors to
engage in value-maximizing activities such as innovation or commercial
transactions.30
In contrast, poor patent quality is said to hold deleterious consequences. Large
numbers of inappropriately granted patents may negatively impact entrepreneurs. For
example, innovative firms may be approached by an individual with a low quality
patent that appears to cover the product they are marketing. The innovative firm may
recognize that the cost of challenging a patent even of dubious validity may be
considerable. Therefore, the firm may choose to make payments under licensing
arrangements, or perhaps decide not to market its product at all, rather than contest
the patent proprietor’s claims.31
Poor patent quality may also encourage opportunistic behavior. Perhaps
attracted by large damages awards and a potentially porous USPTO, rent-seeking
entrepreneurs may be attracted to form speculative patent acquisition and
enforcement ventures. Industry participants may also be forced to expend
considerable sums on patent acquisition and enforcement.32 The net results would
be reduced rates of innovation, decreased patent-based transactions, and higher prices
for goods and services.
Although low patent quality appears to affect both investors and competitors of
a patentee, patent proprietors themselves may also be negatively impacted. Patent
29 CRS Report RL31281, Patent Quality and Public Policy: Issues for Innovative Firms in
Domestic Markets, by John R. Thomas.
30 See Joseph Farrell & Robert P. Merges, “Incentives to Challenge and Defend Patents:
Why Litigation Won’t Reliably Fix Patent Office Errors and Why Administrative Patent
Review Might Help,” 19 Berkeley Technology Law Journal (2004), 943.
31 See Bronwyn H. Hall & Dietmar Harhoff, “Post-Grant Reviews in the U.S. Patent System
— Design Choices and Expected Impact,” 19 Berkeley Technology Law Journal (2004),
989.
32 See Robert P. Merges, “As Many As Six Impossible Patents Before Breakfast: Property
Rights for Business Concepts and Patent System Reform,” 14 Berkeley Technology Law
Journal (1999), 577.

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owners may make managerial decisions, such as whether to build production
facilities or sell a product, based upon their expectation of exclusive rights in a
particular invention. If their patent is declared invalid by the USPTO or a court, the
patentee will be stripped of exclusive rights without compensation. The issuance of
large numbers of invalid patents would increase the possibility that the investment-
backed expectations of patentees would be disappointed.33
The notion that high patent quality is socially desirable has been challenged,
however. Some commentators believe that market forces will efficiently assign
patent rights no matter what their quality. Others observe that few issued patents are
the subject of litigation and further estimate that only a minority of patents are
licensed or sold. Because many patented inventions are not used in a way that calls
their validity into question, some observers maintain, society may be better off
making a detailed review into the patentability of an invention only in those few
cases where that invention is of commercial significance.34
Proposed legislation bears upon the patent quality issue. In particular, H.R.
2795 would allow for increased public participation in USPTO decisionmaking
through a pre-issuance submission procedure. This bill would also allow for post-
issuance opposition proceedings, which would potentially allow interested parties to
“weed out” invalid patents before they are the subject of licensing or infringement
litigation.
Litigation Costs
Patent enforcement is often expensive. The complex legal and technological
issues, extensive discovery proceedings, expert witnesses, and specially qualified
attorneys associated with patent trials can lead to high costs.35 One study published
in 2000 concluded that the average cost of patent enforcement was $1.2 million.36
These expenses appear to be increasing, with one more recent commentator
describing an “industry rule of thumb” whereby “any patent infringement lawsuit will
easily cost $1.5 million in legal fees alone to defend.”37 Higher stakes litigation is
even more costly: For patent suits involving damages claims of more than $25
million, expenses reportedly increase to $4 million per side.38
33 See Craig Allen Nard, “Certainty, Fence Building and the Useful Arts,” 74 Indiana Law
Journal (1999), 759.
34 Mark A. Lemley, “Rational Ignorance at the Patent Office,” 95 Northwestern University
Law Review (2001), 1495.
35 Steven J. Elleman, “Problems in Patent Litigation: Mandatory Mediation May Provide
Settlement and Solutions,” 12 Ohio State Journal on Dispute Resolution (1997), 759.
36 Dee Gill, “Defending Your Rights: Protecting Intellectual Property is Expensive,” Wall
Street Journal (25 Sep. 2000), 6.
37 Mark H. Webbink, “A New Paradigm for Intellectual Property Rights in Software,” 2005
Duke Law and Technology Review (May 1, 2005), 15.
38 See Sarah Lai Stirland, “Will Congress Stop High-Tech Trolls?,” National Journal (Feb.
26, 2005), 612.

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For innovative firms that are not infrequently charged with patent infringement,
or that bring claims of patent infringement themselves, the annual expenses
associated with patent litigation can be very dear. The Microsoft Corporation
reportedly defends an average of 35 to 40 patent lawsuits annually at a cost of almost
$100 million.39 The Intel Corporation has recently been estimated to spend $20
million a year on patent litigation.40
The high costs of litigation may discourage patent proprietors from bringing
meritorious claims against infringers. They may also encourage firms to license
patents of dubious merit rather than contest them in court. Pending legislation
endeavors to make patent litigation less costly and complex through modification of
the patent law doctrines of willful infringement and inequitable conduct. It would
also call for an administrative opposition proceeding that, in some measure, could
serve as a less expensive alternative to litigation.
International Harmonization
In our increasingly globalized, high-technology economy, patent protection in
a single jurisdiction is often ineffective to protect the interests of inventors. As a
result, U.S. inventors commonly seek patent protection abroad. Doing so can be a
costly, time-consuming, and difficult process. There is no global patent system.
Inventors who desire intellectual property protection in a particular country must
therefore take specific steps to procure a patent within that jurisdiction.41
Differences in national laws are among the difficulties faced by U.S. inventors
seeking patent rights overseas. Although the world’s patent laws have undergone
considerable harmonization in recent years, several notable distinctions between U.S.
patent law and those of our leading trading partners persist. Pending legislation
would address some of these differences by modifying U.S. patent law in order to
comply with international standards. Among these proposed reforms are adoption
of a first-inventor-to-file priority system, a post-issuance opposition system, assignee
filing, publication of all pending patent applications, and prior user rights;
elimination of the best mode requirement; and encouragement for the adoption of a
one-year grace period within the European Patent Convention and Japanese Patent
Act.
Potential Abuses of Patent Speculators
Some commentators believe that the patent system too frequently attracts
speculators who prefer to acquire and enforce patents rather than engage in research,
development, manufacturing, or other socially productive activity.42 Patent
39 “Microsoft Advocates for Patent Reform,” eWEEK (March 10, 2005).
40 Stirland, supra, at 613.
41 CRS Report RL31132, Multinational Patent Acquisition and Enforcement: Public Policy
Challenges and Opportunities for Innovative Firms, by John R. Thomas.
42 See Elizabeth D. Ferrill, “Patent Investment Trusts: Let’s Build a Pit to Catch the Patent
(continued...)

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speculators are sometimes termed “trolls,” after creatures from folklore that would
emerge from under a bridge in order to waylay travelers.43 The late Jerome C.
Lemelson, a prolific inventor who owned hundreds of patents and launched
numerous charges of patent infringement, has sometimes been mentioned in this
context. The annual revenue of the Lemelson estate’s patent licensing program has
been reported as in excess of $1.5 billion.44 But as explained by journalist Michael
Ravnitsky, “critics charge that many Lemelson patents are so-called submarine
patents, overly broad applications that took so long to issue or were so general in
nature that their owners could unfairly claim broad infringement across entire
industry sectors.”45 Of such patent ventures, patent attorney James Pooley observes:
Of course there is nothing inherently wrong with charging someone rent to use
your property, including intellectual property like patents. But it’s useful to keep
in mind — especially when listening to prattle about losing American jobs to
foreign competition — that these patent mills produce no products. Their only
output is paper, of a highly threatening sort.46
Patent enforcement suits brought by patent speculators appear to present special
concerns for manufacturers and service providers. If one manufacturer or service
provider commences litigation against another, the defendant can often counter with
its own claims of patent infringement against the plaintiff. Because patent
speculators do not otherwise participate in the marketplace, however, they are
immune to such counterclaims. This asymmetry in litigation positions reportedly
reduces the bargaining power of manufacturers and service providers and exposes
them to harassment.47

Observers hasten to note, however, that not every patent proprietor who does not
commercialize the patented invention should properly be considered an opportunistic
“troll.” A nonmanufacturing patentee may lack the expertise or resources to produce
a patented product, prefer to commit itself to further innovation, or otherwise have
legitimate reasons for its behavior.48 Universities and small biotechnology
companies often fit into this category. Further, whether classified as a “troll” or not,
each patent owner has presumptively fulfilled all of the relevant statutory
42 (...continued)
Trolls,” 6 North Carolina Journal of Law and Technology (2005), 367.
43 See Lorraine Woellert, “A Patent War Is Breaking Out on the Hill,” BusinessWeek 45
(July 4, 2005).
44 Nicholas Varchaver, “The Patent King,” Fortune (May 14, 2001), 202.
45 Michael Ravnitsky, “More Lemelson Suits,” The National Law Journal (Dec. 17, 2001),
B9.
46 James Pooley, “Opinion: U.S. patent reform-a good invention,” Electronic Business (1
Jan. 2000), 72.
47 See Ronald J. Mann, “Do Patents Facilitate Financing in the Software Industry?,” 83
Texas Law Review (2005), 961.
48 See David G. Barker, “Troll or No Troll? Policing Patent Usage with An Open Post-Grant
Review,” 2005 Duke Law and Technology Review (Apr. 15, 2005), 11.

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requirements. Among these obligations is a thorough disclosure of a novel,
nonobviousn invention to the public.49
Pending legislation would impact concerns over “trolling” by amendment to the
patent statute’s provision regarding injunctions, as well as allowing limitations upon
so-called continuation practice at the USPTO.
The Role of Individuals, Universities and Small Entities
Entrepreneurs and small, innovative firms play a role in the technological
advancement and economic growth of the United States.50 Several studies
commissioned by U.S. federal agencies have concluded that individuals and small
entities constitute a significant source of innovative products and services.51 Studies
have also indicated that entrepreneurs and small, innovative firms rely more heavily
upon the patent system than larger enterprises. Larger companies are said to possess
alternative means for achieving a proprietary or property-like interest in a particular
technology. For example, trade secrecy, ready access to markets, trademark rights,
speed of development, and consumer goodwill may to some degree act as substitutes
to the patent system.52 However, individual inventors and small firms often do not
have these mechanisms at their disposal. As a result, the patent system may enjoy
heightened importance with respect to these enterprises.53
49 35 U.S.C. § 112.
50 National Science Board, Science and Engineering Indicators, 1993 (Dec. 8, 1993), 185.
See also CRS Report RL30216, Small, High Tech Companies and Their Role in the
Economy: Issues in the Reauthorization of the Small Business Innovation (SBIR) Program,
by Wendy H. Schacht.
51 For example, the National Academy of Engineering concluded that “small high-tech
companies play a critical and diverse role in creating new products and services, in
developing new industries, and in driving technological change and growth in the U.S.
economy.” National Academy of Engineering, Risk & Innovation: The Role and Importance
of Small High-Tech Companies in the U.S. Economy (Washington: National Academy Press,
1995), 37. This assessment was founded on the ability of small firms to develop markets
rapidly, generate new goods and services, and offer diverse products. The study also
concluded that small businesses were less risk adverse than larger, established corporations
and were often better positioned to exploit market opportunities quickly.
A National Science Foundation report found that entrepreneurs and small firms are six times
as effective as larger firms in utilizing research and development expenditures to generate
new products. National Science Board, Science and Engineering Indicators, 1993, (Dec.
8, 1993), 185. Anderson, Anne, “Small Businesses Make it Big in the SBIR Program,” New
Technology Week (June 6, 1998), p. 2.
52 Sally Wyatt & Gilles Y. Bertin, Multinationals and Industrial Property 139 (Harvester
1988).
53 J. Douglas Hawkins, “Importance and Access of International Patent Protection for the
Independent Inventor,” 3 University of Baltimore Intellectual Property Journal (1995), 145.

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In recent years, universities have also become more full-fledged participants in
the patent system. This trend has been attributed to the Bayh-Dole Act,54 a federal
statute that allowed universities and other government contractors to retain patent
title to inventions developed with the benefit of federal funding.55 In recent years
there has reportedly “been a dramatic increase in academic institutions’ investments
in technology licensing activities.”56 This increase has been reflected in the growth
in the number of patents held by universities, the number of universities with
technology transfer offices, and the amount of patent-based licensing revenues that
these offices have raised.57
The U.S. patent system have long acknowledged the role, and particular needs,
of independent inventors, small firms, and universities. For example, the patent
statute calls for each of these entities to receive a 50% discount on many USPTO
fees.58 As the USPTO is currently entirely funded by the fees it charges its users,59
this provision effectively calls for larger institutions to subsidize the patent
expenditures of their smaller competitors.
Beyond potentially diminished financial resources vis-a-vis larger concerns,
however, observers have disagreed over whether independent inventors, small firms,
and universities have particular needs with respect to the patent system, and if so
whether those needs should be reflected in patent law doctrines. With respect to the
proposed system of “prior user rights,”60 for example, some observers state that such
rights would particularly benefit small entities, which may often lack a sophisticated
knowledge of the patent system.61 Others disagree, stating that smaller concerns rely
heavily on the exclusivity of the patent right, and that the adoption of prior user rights
would advantage large enterprises.62 Similar debates have occurred with respect to
54 P.L. 96-517, 94 Stat. 2311 (codified at 35 U.S.C. §§ 200-212).
55 CRS Report RL32076, The Bayh-Dole Act: Selected Issues in Patent Policy and the
Commercialization of Technology, by Wendy H. Schacht.
56 Josh Lerner, “Patent Policy Innovations: A Clinical Examination,” 53 Vanderbilt Law
Review (2000), 1841.
57 See Arti K. Rai & Rebecca S. Eisenberg, “Bayh-Dole Reform and the Progress of
Biomedicine,” 66 Law and Contemporary Problems (Winter/Spring 2003), 289.
58 35 U.S.C. § 41(g).
59 CRS Report RS20906, U.S. Patent and Trademark Office Appropriations Process: A Brief
Explanation, by Wendy H. Schacht.
60 Under a rule of “prior user rights,” when a conflict exists between an issued patent and
an earlier user of the patented technology, the validity of the patent is upheld but the prior
user is exempted from infringement. See Pierre Jean Hubert, “The Prior User Right of H.R.
400: A Careful Balancing of Competing Interests,” 14 Santa Clara Computer and High
Technology Law Journal (1998), 189. Prior user rights are discussed further in this report
below.
61 See Gary L. Griswold & F. Andrew Ubel, “Prior User Rights — A Necessary Part of a
First-to-File System,” 26 John Marshall Law Review (1993), p. 567.
62 See David H. Hollander, Jr., “The First Inventor Defense: A Limited Prior User Right
(continued...)

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other patent reform proposals, perhaps reflecting the fact that the community of
independent inventors, small firms, and universities is itself a diverse one.
Provisions of pending legislation that appear to be of particular interest to
independent inventors, universities, and small businesses include a shift to a first-
inventor-to-file priority system, prior user rights, pre-issuance publication of all
pending patent applications, and post-issuance oppositions.
Different Roles for Patents in Distinct Industries
To a large extent, the patent statute subjects all inventions to the same standards,
regardless of the field in which those inventions arose. Whether the invention is an
automobile engine, semiconductor, or a pharmaceutical, it is for the most part subject
to the same patentability requirements, scope of rights, and term of protection. Both
experience and economic research suggest that distinct industries experience the
patent system in different ways, however.63 As a result, it can be expected that
particular industries will react differently to the various patent reform proposals
currently before Congress.
Although broad generalizations should be drawn with care, two industries
widely perceived as viewing the patent system in different ways are the
pharmaceutical and software sectors. Within the pharmaceutical industry, individual
patents are perceived as critical to a business model that provides life-saving and life-
enhancing medical innovations, but eventually allows members of the public access
to medicines at low cost. In particular, often only a handful, and sometimes only one
or two patents cover a particular drug product. Patents are also judged to be crucial
to the pharmaceutical sector because of the relative ease of replicating the finished
product. For example, while it is expensive, complicated, and time consuming to
duplicate an airplane, it is relatively simple to perform a chemical analysis of a pill
and reproduce it.64
62 (...continued)
Finds Its Way Into U.S. Patent Law,” 30 American Intellectual Property Law Association
Quarterly Journal (2002), 37 (noting the perception that prior user rights favor large, well-
financed corporations).
63 In particular, economic research suggests that different industries attach widely varying
values to patents. For example, one study of the aircraft and semiconductor industries
suggested that lead time and the strength of the learning curve were superior to patents in
capturing the value of investments. In contrast, members of the drug and chemical
industries attached a higher value to patents. Differences in the perception of the patent
system have been attributed to the extent to which patents introduced significant duplication
costs and times for competitors of the patentee. Richard C. Levin, Alvin K. Klevorick,
Richard R. Nelson, and Sidney G. Winter, “Appropriating the Returns for Industrial
Research and Development,” Brookings Papers on Economic Activity, 1987, in The
Economics of Technical Change, eds. Edwin Mansfield and Elizabeth Mansfield (Vermont,
Edward Elgar Publishing Co., 1993), p. 254.
64 Federic M. Scherer, “The Economics of Human Gene Patents”, 77 Academic Medicine
(Dec. 2002), p. 1350.

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In contrast to the pharmaceutical field, the nature of software development is
such that innovations are typically cumulative and new products often embody
numerous patentable inventions. This environment has led to what has been
described as a
poor match between patents and products in the [software] industry: it is difficult
to patent an entire product in the software industry because any particular
product is likely to include dozens if not hundreds of separate technological
ideas.65
This situation may be augmented by the multiplicity of patents often associated with
a finished computer product that utilizes the software. It is not uncommon for
thousands of different patents (relating to hardware and software) to be embodied in
one single computer. In addition, ownership of these patents may well be fractured
among hundreds or thousands of different individuals and firms.
In summary, then, the patent laws provide a “one size fits all” system, where all
inventions are subject to the same requirements of patentability and scope of
protection, regardless of the technical field in which they arose. Innovators in
different fields nonetheless have varying experiences with the patent system. These
discrepancies, among others, lead to the expectation that distinct industries may react
differently to the various patent reform proposals presently considered by Congress.
Proposed Legislative Initiatives
Pending legislation proposes a diverse array of patent reforms. The remainder
of this report identifies and reviews these proposals.
First Inventor to File
Pending legislation would alter the U.S. patent priority rule from the current
“first-to-invent” principle to the “first-inventor-to-file” principle.66 Within the patent
law, the priority rule addresses the circumstance where two or more persons
independently develop the identical or similar invention at approximately the same
time. In such cases the patent law must establish a rule as to which of these inventors
obtains entitlement to a patent.67
In the United States, when more than one patent application is filed claiming the
same invention, the patent will be awarded to the applicant who was the first inventor
in fact. This conclusion holds even if the first inventor was not the first person to file
65 Mann, supra, at 979.
66 H.R. 2795, § 3.
67 See Roger E. Schechter & John R. Thomas, Principles of Patent Law § 1.2.5 (2d ed.
2004).

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a patent application directed towards that invention.68 Under this “first-to-invent”
system,69 the timing of real-world events, such as the date a chemist conceived of a
new compound or a machinist constructed a new engine, is of significance.
In every patent-issuing nation except the United States, priority of invention is
established by the earliest effective filing date of a patent application disclosing the
claiming invention.70 Stated differently, the inventor who first filed an application
at the patent office is presumptively entitled to the patent. Whether or not the first
applicant was actually the first individual to complete the invention in the field is
irrelevant. This priority system follows the “first-inventor-to file” principle.
A simple example illustrates the distinction between these priority rules.
Suppose that inventor A synthesizes a new chemical compound on August 1, 2005,
and files a patent application on November 1, 2005 claiming that compound.
Suppose further that inventor B independently invents the same compound on
September 1, 2005, and files a patent application on October 1, 2005. Inventor A
would be awarded the patent under the first-to-invent rule, while Inventor B would
obtain the patent under the first-inventor-to-file principle.
Under the current U.S. first-to-invent rule, the majority of priority disputes in
the United States are resolved via “interference” proceedings conducted at the
USPTO.71 An interference is a complex administrative proceeding that ordinarily
results in the award of priority to one of its participants. These proceedings are not
especially common. One estimate is that less than one-quarter of one percent of
patents are subject to an interference.72 This statistic may mislead, however, because
the expense of interference cases may result in their use only for the most
commercially significant inventions.
The patent community has witnessed an extensive and sometimes emotional
debate on the relative merits of the first-to-invent and first-inventor-to-file principle.
Supporters of the current first-to-invent principle in part assert that the first-inventor-
to-file system would create inequities by sponsoring a “race to the Patent Office.”
They are also concerned that the first-to-file system would encourage premature and
sketchy technological disclosures in hastily-filed patent applications.73
68 In addition, the party that was the first to invent must not have abandoned, suppressed or
concealed the invention. 35 U.S.C. § 102(g)(2).
69 See Charles E. Gholz, “First-to-File or First-to-Invent?”, 82 Journal of the Patent and
Trademark Office Society (2000), p. 891.
70 See Peter A. Jackman, “Adoption of a First-to-File System: A Proposal,” 26 University
of Baltimore Law Review (1997), 67.
71 35 U.S.C. § 135.
72 See Clifford A. Ulrich, “The Patent Systems Harmonization Act of 1992: Conformity at
What Price?,” 16 New York Law School Journal of International and Comparative Law
(1996), p. 405.
73 See Coe A. Bloomberg, “In Defense of the First-to-Invent Rule,” 21 American Intellectual
Property Law Quarterly Journal (1993), p. 255.

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Supporters of the first-inventor-to-file principle in part assert that it provides a
definite, readily determined and fixed date of priority of invention, which would lead
to greater legal certainty within innovative industries. They also contend that the
first-inventor-to-file principle would decrease the complexity, length and expense
associated with current USPTO interference proceedings. Rather than being caught
up in lengthy interference proceedings in an attempt to prove dates of inventive
activity that occurred many years previously, they assert, inventors could continue to
go about the process of innovation. Supporters also observe that informed U.S. firms
already organize their affairs on a first-inventor-to-file basis in order to avoid
forfeiture of patent rights abroad.74
The effect of a shift to the first-inventor-to-file rule upon individual inventors,
small firms, and universities has been debated. Some observers state that such
entities often possess fewer resources and wherewithal than their larger competitors,
and thus are less able to prepare and file patent applications quickly. Others disagree,
stating that smaller concerns are more nimble than larger ones and thus better able
to submit applications promptly. They also point to the availability of provisional
applications,75 asserting that such applications allow small entities to secure priority
rights readily without a significant expenditure of resources. A quantitative study of
interference proceedings by Gerald Mossinghoff, a former Commissioner of the
USPTO, also suggested that the first-to-invent rule neither advantaged nor
disadvantaged small entities vis-a-vis larger enterprises.76
The role of the U.S. Constitution is sometimes debated within the context of the
patent priority principle. Article I, section 8, clause 8 of the Constitution provides
Congress with the authority to award “inventors” with exclusive rights. Some
observers suggest this language suggests, or possibly even mandates, the current first-
to-invent system. Others conclude that because the first-inventor-to-file only awards
patents to individuals who actually developed the invention themselves, rather than
derived it from another, this priority system is permissible under the Constitution.77
In weighing the validity of this position, it should be noted that under well-
established U.S. law, the first-inventor-in-fact does not always obtain entitlement to
a patent. If, for example, a first-inventor-in-fact maintained his invention as a trade
secret for many years before seeking patent protection, he may be judged to have
“abandoned, suppressed or concealed” the invention.78 In such a case a second-
inventor-in-fact may be awarded a patent on that invention. Courts have reasoned
that this statutory rule encourages individuals to disclose their inventions to the
74 See Bernarr A. Pravel, “Why the United States Should Adopt the First-to-File System for
Patents,” 22 St. Mary’s Law Journal (1991), p. 797.
75 35 U.S.C. § 111(b).
76 Gerald J. Mossinghoff, “The U.S. First-to-Invent System Has Provided No Advantage to
Small Entities,” 84 Journal of the Patent and Trademark Office Society (2002), p. 425.
77 See generally Charles R.B. Marcedo, “First-to-File: Is American Adoption of the
International Standard in Patent Law Worth the Price?,” 18 American Intellectual Property
Law Association Quarterly Journal (1990), p. 193.
78 35 U.S.C. § 102(g)(2).

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public promptly, or give way to an inventor who in fact does so.79 As the first-
inventor-to-file rule acts in a similar fashion to this longstanding patent law principle,
conflict between this rule and the Constitution appears unlikely.
Notably, a first-inventor-to-file priority rule does not permit one individual to
copy another’s invention and then, by virtue of being the first to file a patent
application, be entitled to a patent. All patent applicants must have originated the
invention themselves, rather than derived it from another.80 In order to police this
requirement, H.R. 2795 provides for “inventor’s rights contests” that would allow the
USPTO to determine which applicant is entitled to a patent on a particular
invention.81
Grace Period
Pending legislation would also impact the existing one-year “grace period”
enjoyed by U.S. inventors. Current U.S. patent law essentially provides inventors
with a one-year period to decide whether patent protection is desirable, and, if so, to
prepare an application. Specified activities that occur before the “critical date” —
patent parlance for the day one year before the application was filed — will prevent
a patent from issuing.82 If, for example, an entrepreneur first discloses an invention
by publishing an article in a scientific journal, she knows that she has one year from
the publication date in which to file a patent application. Importantly, uses, sales,
and other technical disclosures by third parties will also start the one-year clock
running. As a result, inventors have a broader range of concerns than merely their
own behavior.83
In contrast, many other patent-granting states provide more limited grace
periods, or no grace periods at all. In Europe, any sales or publication of an invention
anywhere in the world prior to the filing date defeats the patentability of an
invention.84 The Japanese patent system includes a six-month grace period tied only
to the activities of the inventor.85 Under the patent law of Japan, any disclosures of
an invention made by a third party even one day before the filing date will prevent
the issuance of a patent.
The proposed legislation would make two changes to U.S. patent law. First, the
one-year grace period would apply only to the inventor’s own activities. Third party
activity that occurred even one day before the filing date would constitute prior art
and potentially be patent-defeating. This rule represents a change from current law,
under which a patent applicant may possibly “antedate” prior art by showing that she
79 See Del Mar Engineering Labs. v. United States, 524 F.2d 1178 (Ct. Cl. 1975).
80 35 U.S.C. § 101.
81 H.R. 2795, § 3(i).
82 35 U.S.C. § 102(b).
83 Schechter & Thomas, supra, at § 4.3.1.
84 European Patent Convention, Article 54(2).
85 Japanese Patent Act, Article 29(1).

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invented the subject matter of the application prior to the date of the third party
reference.86 This change is consistent with the proposed shift to a first-inventor-to-
file priority rule from a first-to-invent system.
Second, the proposed legislation would include a provision that might
encourage adoption of a one-year grace period for inventor activities in Europe and
Japan. An understanding of this proposal requires some background information on
the international priority system established by the Paris Convention.87 The
international priority system allows an inventor to file a patent application in one
Paris Convention signatory state, which is usually the inventor’s home country. If
the inventor subsequently files patent applications in any other Paris Convention
signatory state within the next 12 months, overseas patent-granting authorities will
treat the application as if it were filed on the first filing date. Critically, information
that enters the public domain between the priority date and subsequent filing dates
does not prejudice the later applications. Paris Convention priority allows U.S.
inventors to preserve their original USPTO filing dates as they make arrangements
to file patent applications overseas.88
Suppose, for example, that an inventor files a patent application at the USPTO
on October 1, 2005. The inventor then files a patent application claiming the same
invention in the Japanese Patent Office on September 1, 2006. As part of his
Japanese application, the inventor informs the Japanese Patent Office of the earlier
U.S. application. Because Japan has acceded to the Paris Convention, the Japanese
Patent Office will treat that inventor’s application as if it had been filed on October
1, 2005. As a result, information that entered the public domain after the U.S. filing
date would not prejudice the inventor’s Japanese application. A journal article
published on January 1, 2006, for example, would not limit the opportunity of the
inventor to obtain a Japanese patent.
The U.S. patent statute currently limits the usefulness of the Paris Convention
priority date for foreign inventors seeking U.S. patent rights. Section 119 of the
Patent Act states that:
no patent shall be granted on any application for patent for an invention which
had been patented or described in a printed publication in any country more than
one year before the date of the actual filing of the application in this country, or
which had been in public use or on sale in this country more than one year prior
to such filing.89
The effect of this language is that the one-year grace period is measured not from the
Paris Convention international priority date, but the actual U.S. filing date.
86 35 U.S.C. § 102(a).
87 Convention of Paris for the Protection of Industrial Property, 13 U.S.T. 25 (1962).
88 See G.H.C. Bodenhausen, Guide to the Paris Convention for the Protection of Industrial
Property (United International Bureau for the Protection of Intellectual Property, Geneva,
Switzerland 1968).
89 35 U.S.C. § 119(a).

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This limitation may discourage U.S. trading partners from adopting a grace
period analogous to that of U.S. law. Consider, for example, a Japanese inventor
who publishes an article in a scientific journal describing his new invention on
August 1, 2004. Consistent with Japanese patent law, he then files a patent
application at the Japanese Patent Office six months later, on February 1, 2005.
Then, in accordance with the Paris Convention, he files an application at the USPTO
on February 1, 2006.
Under these circumstances, the U.S. patent application should be denied, even
though the Japanese inventor appeared to comply with all legal formalities. Because
the U.S. patent statute compels the USPTO to assess the grace period as ending as
the actual U.S. filing date in 2006, rather than the Paris Convention priority date in
2005, the U.S. patent is barred from issuance. This state of affairs may give pause
to nations considering adopting a U.S.-style grace period. Foreign applicants who
rely upon grace periods within their own national systems may be put in a position
of forfeiture of their U.S. patent rights.
Apparently aware of this concern, pending legislation potentially changes the
date the grace period closes from the actual U.S. filing date to the Paris Convention
priority date — provided that Europe and Japan adopt laws analogous to that of
proposed U.S. law. In the language of H.R. 2795:
Before the date, if ever, that the Director of the [USPTO] publishes a notice . .
. declaring that both the European Patent Convention and the patent laws of
Japan afford inventors seeking patents a 1-year period prior to the effective filing
date of a claimed invention during which disclosures made by the inventor or by
others who obtained the subject matter disclosed directly or indirectly from the
inventor do not constitute prior art, the term “effective filing date” as used in
section 102(a)(1)(A) of title 35, United States Code, shall be construed by
disregarding any right of priority except that provided under section 119(e) of
title 35, United States Code.90
Should the USPTO Director publish a notice in keeping with this provision, then
foreign inventors would be able to rely upon their domestic grace periods and
maintain their ability to obtain patents in the United States.
Elimination of Sections 102(c), (d) and (f)
Pending legislation would eliminate three provisions of the Patent Act,
paragraphs (c), (d), and (f) of Section 102. Section 102(c) does not allow an
applicant to obtain a patent when he “has abandoned the invention.” This statute
does not refer to disposal of the invention itself, however, but instead to the
intentional surrender of an invention to the public. Older Supreme Court opinions
instruct that abandonment may occur where an inventor expressly dedicates it to the
public, through a deliberate relinquishment or conduct evidencing an intent not to
90 H.R. 2795, § 11(h).

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pursue patent protection.91 The circumstances must be such that others could
reasonably rely upon the inventor’s renunciation.92 Perhaps because few individuals
expressly cede their patentable inventions to the public without seeking
compensation, there are few modern judicial opinions that consider 35 U.S.C. §
102(c) in any meaningful way. In addition, the generally applicable principle of
equitable estoppel may apparently be used to obtain the same result.93
Like section 102(c), section 102(d) of the Patent Act is reportedly little-used.94
35 U.S.C. 102(d) bars a U.S. patent when (1) an inventor files a foreign patent
application more than twelve months before filing the U.S. application, and (2) a
foreign patent results from that application prior to the U.S. filing date. Suppose that
an inventor files an application at a foreign patent office on May 25, 2004. The
foreign application matures into a granted foreign patent on August 1, 2005. If the
inventor has not filed his patent application at the USPTO as of August 1, 2005, the
date of the foreign patent grant, any patent application that the inventor subsequently
filed in the United States would be defeated.
The policy basis for 35 U.S.C. § 102(d) is to encourage the prompt filing of
patent applications in the United States. As the Patent Office Commissioner
explained in 1870:
The intention of [C]ongress obviously was to obtain for this country the free use
of the inventions of foreigners as soon as they became free abroad. This is
indicated by the use of the phrase, ‘first patented, or caused to be patented, in a
foreign country,’ for it was presumable that American citizens would obtain their
first patent here, while a foreigner would first patent his invention in his own
country. The statute was designed to prevent a foreigner from spending his time
and capital in the development of an invention in his own country, and then
coming to this country to enjoy a further monopoly, when the invention had
become free at home. The result of such a course would be that while the foreign
country was developing the invention and enjoying its benefits, its use could be
interdicted here; while, if the term of the monopoly could be further extended
here, the market could be controlled long after the foreign nation was prepared
to flood this country with the unpatented products of the patented process.95
Section 102(d) has been subject to critical commentary. Because inventors may
choose to file a patent application only in the United States, the policy goal of
assuring that the U.S. market will become patent-free contemporaneously with
foreign markets may not be well-served by this provision. In addition, 35 U.S.C. §
102(d) effectively acts against foreign, rather than U.S.-based inventors, as domestic
91 See Beedle v. Bennett, 122 U.S. 71 (1887).
92 See Mendenhall v. Astec Indus., Inc., 13 USPQ2d 1913, 1937 (E.D. Tenn.1988), aff’d,
887 F.2d 1094 (Fed. Cir. 1989).
93 See generally A.C. Auckerman & Co. v. R.L. Chaides.Construction Co., 960 F.2d 1020
(Fed. Cir. 1992).
94 Schechter & Thomas, supra, at § 4.3.8.
95 Bate Refrigerating Co. v. Sulzberger, 157 U.S. 1, 27 (1895) (quoting Ex parte Mushet,
1870 Comm’r Dec. 106, 108 (1870)).

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inventors ordinarily file at the USPTO first before seeking rights overseas. Some
commentators have suggested that 35 U.S.C. § 102(d) violates the spirit, if not the
letter, of U.S. international treaty obligations, which generally impose an obligation
of national treatment with respect to intellectual property matters.96
Finally, H.R. 2795 would also eliminate current 35 U.S.C. § 102(f), which states
that a person may obtain a patent unless “he did not himself invent the subject matter
sought to be patented.” As this requirement that only an actual inventor may obtain
a patent is also stated by 35 U.S.C. § 101,97 this proposed amendment does not
appear to have any substantive impact upon the patent law.
Assignee Filing
Under current U.S. law, a patent application must be filed by the inventor —
that is to say, the natural person or persons who developed the invention.98 This rule
applies even where the invention was developed by individuals in their capacity as
employees. Even though rights to the invention have usually been contractually
assigned to an employer, for example, the actual inventor, rather than the employer,
must be the one that applies for the patent. Section 118 of the Patent Act allows a
few exceptions to this general rule. If an inventor cannot be located, or refuses to
perform his contractual obligation to assign an invention to his employer, then the
employer may file in place of the inventor.99
H.R. 2795 would instead stipulate that a “person to whom the inventor has
assigned or is under an obligation to assign the invention may make an application
for patent.”100 Individuals who otherwise make a showing of a “sufficient proprietary
interest in the matter” may also apply for a patent on behalf of the inventor upon a
sufficient show of proof of the pertinent facts. Under the proposed legislation, if the
USPTO “Director grants a patent on an application filed under this section by a
person other than the inventor, the patent shall be granted to the real party in interest
and upon such notice to the inventor as the Director considers to be sufficient.”
Legal reforms allowing assignee filing of patent applications have been
discussed for many years. A 1966 Report of the President’s Commission on the
Patent System recommended this change as a way to simplify formalities of
application filing and of avoiding the delays caused by the need to identify and obtain
signatures from each inventor.101 The 1992 Advisory Commission on Patent Law
Reform was also in favor of this change. The 1992 Commission observed that the
96 See Donald S. Chisum, “Foreign Activity: Its Effect on Patentability under United States
Law,” 11 International Review of Industrial Property & Copyright Law (1980), 26.
97 See Schechter & Thomas, supra, at § 4.4.4.
98 35 U.S.C. § 111.
99 35 U.S.C. § 118.
100 H.R. 2795, § 4(c).
101 President’s Commission on the Patent System,”To Promote the Progress of . . . Useful
Arts” in an Age of Exploding Technology (1966).

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United States was “the only country which does not permit the assignee of an
invention to file a patent application in its own name.”102 In the opinion of the 1992
Commission, assignee filing would appropriately accompany a U.S. shift to a first-
inventor-to-file priority system, as the reduction of formalities would allow
innovative enterprises to more promptly file patent applications.
The 1992 Commission also reviewed potential undesirable aspects of assignee
filing. The Commission noted that patent applications filed by assignees may lack
the actual inventor’s personal guarantee that the application was properly filed. In
addition, assignee filing might derogate the right of natural persons to their
inventions. In the opinion of the Commission, however, the advantages of assignee
filing outweighed the disadvantages.103
Elimination of the Best Mode Requirement
H.R. 2795 would eliminate U.S. patent law’s best mode requirement. Currently,
inventors are required to “set forth the best mode contemplated by the inventor of
carrying out his invention.” 104 Failure to disclose the best mode known to the
inventor is a ground for invalidating an issued patent. The courts have established
a two-part standard for analyzing whether an inventor disclosed her best mode in a
particular patent. The first inquiry was whether the inventor knew of a way of
practicing the claimed invention that he considered superior to any other. If so, then
the patent instrument must identify, and disclose sufficient information to enable
persons of skill in the art to practice that best mode.105
Proponents of the best mode requirement have asserted that it allows the public
to receive the most advantageous implementation of the technology known to the
inventor. This disclosure becomes part of the patent literature and may be freely
reviewed by those who wish to design around the patented invention. Members of
the public are also said to be better able to compete with the patentee on equal
footing after the patent expires.106
The best mode requirement has encountered severe criticism in recent years,
however.107 For example, a 1992 Presidential Commission recommended that
Congress eliminate the best mode requirement. The Commission reasoned that
patents are also statutorily required to disclose “the manner and process of making
102 Advisory Commission on Patent Reform, A Report to the Secretary of Commerce (Aug.
1992), 179.
103 Ibid.
104 35 U.S.C. § 112.
105 See, e.g., Chemcast Corp. v. Arco Industries Corp. 913 F.2d 923 (Fed. Cir. 1990).
106 See Jerry R. Selinger, “In Defense of the ‘Best Mode’: Preserving the Benefit of the
Bargain for the Public, 43 Catholic University Law Review (1994), 1071.
107 See, e.g., Steven B. Walmsley, “Best Mode: A Plea to Repair or Sacrifice This Broken
Requirement of United States Patent Law,” 9 Michigan Telecommunications and
Technology Law Review (2002), p. 125.

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and using [the invention], in such full, clear, concise, and exact terms as to enable
any person skilled in the art . . . to make and use the same.”108 This “enablement”
requirement was believed to provide sufficient information to achieve the patent
law’s policy goals.109

The Commission further stated that the best mode requirement leads to increases
in the costs and complexity of patent litigation. As the Commission explained:
The disturbing rise in the number of best mode challenges over the past 20 years
may serve as an indicator that the best mode defense is being used primarily as
a procedural tactic. A party currently can assert failure to satisfy the best mode
requirement without any significant burden. This assertion also entitles the party
to seek discovery on the “subjective beliefs” of the inventors prior to the filing
date of the patent application. This broad authority provides ample opportunity
for discovery abuse. Given the fluidity by which the requirement is evaluated
(e.g., even accidental failure to disclose any superior element, setting, or step can
negate the validity of the patent), and the wide ranging opportunities for
discovery, it is almost certain that a best mode challenge will survive at least
initial judicial scrutiny.110
The Commission further reasoned that the best mode at the time of filing is unlikely
to remain the best mode when the patent expires many years later.111 Because many
foreign patent laws include no analog to the best mode requirement, inventors based
overseas have also questioned the desirability of the best mode requirement in U.S.
law.
Inequitable Conduct
The administrative process of obtaining a patent from the USPTO has
traditionally been conducted as an ex parte procedure. Stated differently, patent
prosecution involves only the applicant and the USPTO. Members of the public, and
in particular the patent applicant’s marketplace competitors, do not participate in
patent acquisition procedures.112 As a result, the patent system relies to a great
extent upon applicant observance of a duty of candor and truthfulness towards the
USPTO.
An applicant’s obligation to proceed in good faith may be undermined, however,
by the great incentive applicants possess not to disclose, or to misrepresent,
information that might deleteriously impact their prospective patent rights. The
patent law therefore penalizes those who stray from honest and forthright dealings
108 35 U.S.C. § 101.
109 1992 Advisory Commission Report, supra, at 102-03.
110 Ibid at 101.
111 Ibid. at 102-03.
112 35 U.S.C. § 122(a) (stating general rule that “applications for patents shall be kept in
confidence by the Patent and Trademark Office and no information concerning the same
given without authority of the applicant . . . .”).

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with the USPTO. Under the doctrine of “inequitable conduct,” if an applicant
intentionally misrepresents a material fact or fails to disclose material information,
then the resulting patent will be declared unenforceable.113 Two elements must exist
before a court will decide that the applicant has engaged in inequitable conduct.
First, the patentee must have misrepresented or failed to disclose material
information to the USPTO in the prosecution of the patent.114 Second, such
nondisclosure or misrepresentation must have been intentional.115
During patent infringement litigation, an accused infringer has the option of
asserting that the plaintiff’s patent is unenforceable because it was procured through
inequitable conduct. Concerns have arisen that charges of inequitable conduct have
become routine in patent cases. As one commentator explains:
The strategic and technical advantages that the inequitable conduct defense
offers the accused infringer make it almost too attractive to ignore. In addition
to the potential effect on the outcome of the litigation, injecting the inequitable
conduct issue into patent litigation wreaks havoc in the patentee’s camp. The
inequitable conduct defense places the patentee on the defensive, subjects the
motives and conduct of the patentee’s personnel to intense scrutiny, and provides
an avenue for discovery of attorney-client and work product documents . . . .116
As the Federal Circuit put it, “the habit of charging inequitable conduct in almost
every major patent case has become an absolute plague.”117 Other observers believe
that because inequitable conduct requires an analysis of the knowledge and intentions
of the patent applicants, the doctrine may also be contributing disproportionately to
the time and expense of patent litigation.118
Due to these perceived burdens upon patent litigation, some commentators have
proposed that the inequitable conduct defense be eliminated.119 Others believe that
inequitable conduct is necessary to ensure the proper functioning of the patent
system. As the Advisory Commission on Patent Law Reform explained in its 1992
report:
Some mechanism to ensure fair dealing between the patentee, public, and the
Federal Government has been part of the patent system for over 200 years. In its
113 Glaverbel Societe Anonyme v. Northlake Mktg. & Supply Inc., 45 F.3d 1550 (Fed. Cir.
1995).
114 Heidelberger Druckmaschinen AG v. Hantscho Comm’l Prods., Inc., 21 F.3d 1068 (Fed.
Cir. 1993).
115 Jazz Photo Corp. v. U.S. Int’l Trade Comm’n, 264 F.3d 1094 (Fed. Cir. 2001).
116 John F. Lynch, “An Argument for Eliminating the Defense of Patent Unenforceability
Based on Inequitable Conduct,” 16 American Intellectual Property Law Association
Quarterly Journal (1988), 7.
117 Burlington Indus., Inc. v. Dayco Corp., 849 F.2d 1418 (Fed. Cir. 1988).
118 See, e.g., Scott D. Anderson, “Inequitable Conduct: Persistent Problems and
Recommended Resolutions,” 82 Marquette Law Review (1999), 845.
119 Lynch, supra, at 7.

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modern form, the unenforceability defense provides a necessary incentive for
patent applicants to engage in fair and open dealing with the [USPTO] during the
ex parte prosecution of patent applications, by imposing the penalty of forfeiture
of patent rights for failure to so deal. The defense is also considered to be an
essential safeguard against truly fraudulent conduct before the [USPTO].
Finally, the defense provides a means for encouraging complete disclosure of
information relevant to a particular patent application. . . . . Thus, from a policy
perspective, the defense of unenforceability based upon inequitable conduct is
desirable and should be retained.120
Proposed legislation would retain the concept of an inequitable conduct defense,
but introduce a number of substantive and procedural changes to the doctrine. In
broad overview, H.R. 2795 would provide statutory authorization for the USPTO
Director to issue regulations governing applicants’ duty of candor.121 Although the
USPTO has for many years issued such regulations,122 commentators have questioned
the authority of the USPTO to do so under current law.123
H.R. 2795 would also provide the USPTO with authority to prosecute violations
of the inequitable conduct doctrine. Although that agency previously performed this
function without express statutory authorization, the USPTO suspended that activity
in 1992.124 Under H.R. 2795, the USPTO would be obligated to establish a “special
office with authority to investigate possible violations of the duty of candor and good
faith.” The USPTO would be granted subpoena power and be able to conduct
hearings in pursuit of these investigations. The USPTO would also be able to
penalize misconduct through substantial civil fines.
In addition, H.R. 2795 would limit the circumstances under which the defense
of inequitable conduct could be raised before the courts. In broad outline, under H.R.
2795 if a court determines an issue of possible misconduct, then the court is directed
to refer the matter to the USPTO. Within judicial infringement proceedings, issues
of inequitable conduct could only arise after the court grants a motion to amend the
pleadings. Such a motion would have to describe the relevant facts in detail and
could not be granted until the court has previously entered a judgment that at least
one of the asserted patent claims is invalid.
H.R. 2795 would also introduce a substantive change to the law of inequitable
conduct. Under this legislation, a finding of inequitable conduct is appropriate only
in circumstances when the USPTO examiner relied upon the alleged misconduct. In
particular, the charge of inequitable conduct cannot be sustained unless the USPTO
“would not have issued the invalidated claim, acting reasonably, in the absence of the
120 1992 Advisory Commission, supra, at 114.
121 H.R. 2795, § 5(a).
122 37 C.F.R. § 1.56.
123 R. Carl Moy, “The Effect of New Rule 56 on the Law of Inequitable Conduct,” 74
Journal of the Patent and Trademark Office Society (1992), 391.
124 See Harry F. Manbeck, Jr., “The Evolution and Issue of New Rule 56,” 20 American
Intellectual Property Law Association Quarterly Journal (1992), 136.

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misconduct,” or “based upon the prosecution history as a whole objectively
considered, would have done so based upon in whole or in part on account of the
misconduct.”125
Publication of Pending Applications
Until recent years, the U.S. patent system maintained pending patent
applications in secrecy. The first moment that the public would become aware of the
existence of a U.S. patent application was the day the USPTO formally allowed it to
issue as a granted patent. This regime advantaged patent applicants because it
allowed them to understand exactly what the scope of any allowed claims might be
prior to disclosing an invention. Thus, if the applicant was able to maintain the
invention that was subject to a patent application as a trade secret, then he could
choose between obtaining the allowed patent claims and trade secret status. In
addition, because the invention was not disclosed prior to the award of formal patent
rights, unscrupulous competitors were discouraged from copying the invention.
However, this secrecy regime has been perceived as imposing costs as well.
Others might well engage in duplicative research efforts during the pendency of
patent applications, unaware that an earlier inventor had already staked a claim to that
technology. This arrangement also allowed inventors to commence infringement
litigation on the very day a patent issued, without any degree of notice to other
members of the technological community.126
Industry in the United States possessed one mechanism for identifying pending
U.S. patent applications. Most foreign patent regimes publish all pending patent
applications approximately 18 months after they have been filed.127 As a result,
savvy firms in the United States could review pending applications filed before
foreign patent offices, and make an educated guess as to the existence of a
corresponding U.S. application. This effort was necessarily inexact, however,
particularly as some inventors either lacked the resources, or made the strategic
decision, not to obtain patent rights outside the United States.
In enacting the American Inventors Protection Act of 1999, Congress for the
first time introduced the concept of pre-grant publication into U.S. law. Since
November 29, 2000, U.S. patent applications have been published 18 months from
the date of filing, with some exceptions. The most significant of these exceptions
applies where the inventor represents that he will not seek patent protection abroad.
In particular, if an applicant certifies that the invention disclosed in the U.S.
application will not be the subject of a patent application in another country that
requires publication of applications 18 months after filing, then the USPTO will not
125 H.R. 2795, § 5
126 Schechter & Thomas, supra, at § 7.2.6.
127 John C. Todaro, “Potential Upcoming Changes in U.S. Patent Laws: the Publication of
Patent Applications,” 36 IDEA: Journal of Law and Technology (1996), 309.

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publish the application.128 As a result, inventors who do not wish to seek foreign
patent rights retain the possibility of avoiding pre-grant publication.
Proposed legislation would further modify the U.S. pre-grant publication system
by effectively calling for all pending applications to be published approximately 18
months after they are filed. In particular, H.R. 2795 would eliminate the possibility
of opting out of pre-grant publication by certifying that a patent will be sought only
in the United States.129
Pre-Issuance Submissions
Pending legislation would expand the ability of members of the public to submit
information to the USPTO that is pertinent to pending applications. Under current
law, interested individuals may enter a protest against a patent application. The
protest must specifically identify the application and be served upon the applicant.
The protest must also include a copy and, if necessary, an English translation, of any
patent, publication or other information relied upon. The protester also must explain
the relevance of each item.130
Protest proceedings have traditionally played a small role in U.S. patent practice.
Until Congress enacted the American Inventors Protection Act of 1999, the USPTO
maintained applications in secrecy. Therefore, the circumstances in which members
of the public would learn of the precise contents of a pending patent application were
relatively limited. With the USPTO commencing publication of some pending patent
applications, protests would seem far more likely. Seemingly aware of this
possibility, the 1999 Act provided that the USPTO shall “ensure that no protest or
other form of pre-issuance opposition . . . may be initiated after publication of the
application without the express written consent of the applicant.”131 Of course, the
effect of this provision is to eliminate the possibility of protest in exactly that class
of cases where the public is most likely to learn of the contents of a pending
application.
Through rulemaking, the USPTO has nonetheless established a limited
mechanism for members of the public to submit information they believe is pertinent
to a pending, published application. The submitted information must consist of
either a patent or printed publication, and it must be submitted within two months of
the date the USPTO published the pending application. Nondocumentary
information that may be relevant to the patentability determination, such as sales or
public use of the invention, will not be considered.132 In addition, because Congress
stipulated that no protest or pre-grant opposition may occur absent the consent of the
patent holder, the USPTO has explained that it will not accept comments or
128 35 U.S.C. § 122(b).
129 H.R. 2795, § 9(a).
13037 C.F.R. § 1.291.
131 35 U.S.C. § 122(c).
132 37 C.F.R. § 1.99.

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explanations concerning the submitted patents or printed publications. If such
comments are attached, USPTO staff will redact them before the submitted
documents are forwarded to the examiner.133
Pending legislation would augment the possibility for pre-issuance submissions.
Under H.R. 2795, any person would be able to submit patent documents and other
printed publications to the USPTO for review. Such prior art must be submitted
within the later date of either (1) the date the USPTO issues a notice of allowance to
the patent applicant; or (2) either six months after the date of pre-grant publication
of the application, or the date of the rejection of any claim by the USPTO examiner.
Such a submission must include “a concise description of the asserted relevance of
each submitted document.”134
Most observers agree that ideally, the USPTO would have access to all pertinent
information when making patentability determinations. A more expansive pre-
issuance submission policy may allow members of the public to disclose relevant
patents and other documents that the USPTO’s own searchers may not have revealed,
thereby leading to more accurate USPTO decision making. On the other hand,
lengthy pre-issuance submissions may merely be repetitive of the USPTO’s own
search results, but still require extensive periods of examiner review that might
ultimately delay examination. The proposal of H.R. 2795 apparently attempts to
balance these concerns by expanding existing opportunities for post-publication
submissions, but limiting the timing and nature of those submissions so as to prevent
undue burdens upon the USPTO and patent applicants.
Continuation Applications
Pending legislation would allow the USPTO Director to limit the availability of
so-called continuation applications via regulation. Continuation applications
essentially allow inventors to re-file previously rejected patent applications in order
to pursue further prosecution with a USPTO examiner.135 The filing of a patent
application effectively allows two formal communications, termed “Office Actions,”
with a USPTO examiner. Agreement often cannot be reached by this point, however,
leaving the applicant with only the alternatives of abandonment of patent protection
or the filing of an appeal. By filing a continuation application, an applicant
essentially purchases additional time for dialogue between the applicant and
examiner.
The use of continuation applications is commonplace in U.S. patent practice.
Applicants not infrequently file one or more continuing applications based upon an
earlier filed “patent” application. Many patents have issued based upon chains of
continuation applications involving a parent, grandparent, and even more remote
predecessors.
133 U.S. Dept. of Commerce, U.S. Patent & Trademark Off., Manual of Patent Examining
Procedure § 1134.01 (8th ed. May 2004).
134 H.R. 2795, § 10.
135 35 U.S.C. § 120.

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Continuation applications are said to allow applicants to more accurately claim
a previously disclosed invention without the necessity of an appeal.136 Some
commentators believe they are subject to abuse, however. Under this view,
continuation practice introduces delay and uncertainty into the patent acquisition
process. In particular, applicants are said to use a chain of continuation applications
in order to gain advantages over competitors by waiting to see what product the
competitor will make, and then drafting patent claims that cover that product.
Continuation practice is also said to have led to long delays in the issuance of a
patent in order to surprise an established industry, a process known as “submarine
patenting.”137
At present time, two features of the Patent Act have been identified as
mitigating against abuse of continuation applications. The first feature, discussed
above, is the pre-grant publication of pending patent applications.138 This rule allows
interested members of the public to be notified that the application has been filed at
the USPTO prior to the formal bestowal of exclusive patent rights. Under current
law, however, exceptions exist to this rule, and as a result some applications are not
published prior to their issuance.139
The second feature is the term of the patent, which as of June 8, 1995, was set
to the duration of twenty years from the date of filing.140 The twenty-year term is
measured from the filing date of the earliest in the chain of continuation applications.
Inventors who file a series of continuation applications thereby shorten their term of
eventual patent protection. In some circumstances, however, even a patent with a
diminished term may remain of competitive significance. And again there is an
exception to the twenty-year patent term based upon the filing date: Applications
filed prior to June 8, 1995, may instead enjoy a term of seventeen years set from the
date of issuance.
H.R. 2795 would allow the USPTO Director to issue regulations that would
limit the ability of inventors to file continuation applications. The bill would further
stipulate that “[n]o such regulation may delay applicants an adequate opportunity to
obtain claims for any invention disclosed in an application for patent.”141
Prior User Rights
Pending legislation would expand the applicability of a “first inventor defense”
established by the American Inventors Protection Act of 1999. As currently found
at 35 U.S.C. § 273, an earlier inventor of a “method of doing or conducting business”
136 Schechter & Thomas, supra, at § 7.2.4.
137 Mark A. Lemley & Kimberly A. Moore, “Ending Abuse of Patent Continuations,” 84
Boston University Law Review (2004), 63.
138 35 U.S.C. § 122(b)(1).
139 35 U.S.C. § 122(b)(2).
140 35 U.S.C. § 154(a)(2).
141 H.R. 2795, § 8.

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that was later patented by another may claim a defense to patent infringement in
certain circumstances. H.R. 2795 would broaden this defense by allowing it to apply
with respect to any patented subject matter.
The impetus for this provision lies in the rather complex relationship between
the law of trade secrets and the patent system. Trade secrecy protects individuals
from misappropriation of valuable information that is useful in commerce. One
reason an inventor might maintain the invention as a trade secret rather than seek
patent protection is that the subject matter of the invention may not be regarded as
patentable. Such inventions as customer lists or data compilations have traditionally
been regarded as amenable to trade secret protection but not to patenting.142
Inventors might also maintain trade secret protection due to ignorance of the patent
system or because they believe they can keep their invention as a secret longer than
the period of exclusivity granted through the patent system.143
The patent law does not favor trade secret holders, however. Well-established
patent law provides that an inventor who makes a secret, commercial use of an
invention for more than one year prior to filing a patent application at the USPTO
forfeits his own right to a patent.144 This policy is based principally upon the desire
to maintain the integrity of the statutorily prescribed patent term. The patent law
grants patents a term of twenty years, commencing from the date a patent application
is filed.145 If the trade secret holder could make commercial use of an invention for
many years before choosing to file a patent application, he could disrupt this regime
by delaying the expiration date of his patent.
On the other hand, settled patent law principles established that prior secret uses
would not defeat the patents of later inventors.146 If an earlier inventor made secret
commercial use of an invention, and another person independently invented the same
technology later and obtained patent protection, then the trade secret holder could
face liability for patent infringement. This policy is based upon the reasoning that
once issued, published patent instruments fully inform the public about the invention,
while trade secrets do not. As between a subsequent inventor who patented the
invention, and thus had disclosed the invention to the public, and an earlier trade
secret holder who had not, the law favored the patent holder.
An example may clarify this rather complex legal situation. Suppose that
Inventor A develops and makes commercial use of a new manufacturing process.
Inventor A chooses not to obtain patent protection, but rather maintains that process
as a trade secret. Many years later, Inventor B independently develops the same
manufacturing process and promptly files a patent application claiming that
142 Restatement of Unfair Competition § 39.
143 David D. Friedman, “Some Economics of Trade Secret Law,” 5 Journal of Economic
Perspectives (1991), 61, 64.
144 35 U.S.C. § 102(b). See Metallizing Engineering Co. v. Kenyon Bearing & Auto Parts,
153 F.2d 516 (2d Cir. 1946).
145 35 U.S.C. § 154.
146 W.L. Gore & Associates. v. Garlock, Inc., 721 F.2d 1540 (Fed. Cir. 1983).

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invention. In such circumstances, Inventor A’s earlier, trade secret use does not
prevent Inventor B from procuring a patent. Furthermore, if the USPTO approves
the patent application, then Inventor A faces infringement liability should Inventor
B file suit against him.
The American Inventors Protection Act of 1999 somewhat modified this
principle. That statute in part provided an infringement defense for an earlier
inventor of a “method of doing or conducting business” that was later patented by
another. By limiting this defense to patented methods of doing business, Congress
responded to the 1998 Federal Circuit opinion in State Street Bank and Trust Co. v.
Signature Financial Group.147 That judicial opinion recognized that business
methods could be subject to patenting, potentially exposing individuals who had
maintained business methods as trade secrets to liability for patent infringement.
Again, an example may aid understanding of the first inventor defense. Suppose
that Inventor X develops and exploits commercially a new method of doing business.
Inventor X maintains his business method as a trade secret. Many years later,
Inventor Y independently develops the same business method and promptly files a
patent application claiming that invention. Even following the enactment of the
American Inventors Protection Act, Inventor X’s earlier, trade secret use would not
prevent Inventor Y from procuring a patent. However, should the USPTO approve
Inventor Y’s patent application, and should Inventor Y sue Inventor X for patent
infringement, then Inventor X may potentially claim the benefit of the first inventor
defense. If successful,148 Inventor X would enjoy a complete defense to infringement
of Inventor Y’s patent.
As originally enacted, the first inventor defense applied only to patents claiming
a “method of doing or conducting business.” Although the American Inventors
Protection Act did not define this term, the first inventor defense was arguably a
focused provision directed towards a specific group of potential patent infringers.
Pending legislation would expand upon the first inventor defense by allowing it to
apply to all patented subject matter.149 By removing current restrictions referring to
methods of doing business, H.R. 2795 would effectively introduce “prior user rights”
into U.S. law.
A feature of many foreign patent regimes, prior user rights are often seen as
assisting small entities, which may lack the sophistication or resources to pursue
147 149 F.3d 1368 (Fed. Cir. 1998).
148 As presently codified at 35 U.S.C. § 273, the first inventor defense is subject to a number
of additional qualifications. First, the defendant must have reduced the infringing subject
matter to practice at least one year before the effective filing date of the application.
Second, the defendant must have commercially used the infringing subject matter prior to
the effective filing date of the patent. Finally, any reduction to practice or use must have
been made in good faith, without derivation from the patentee or persons in privity with the
patentee.
149 The bill would also remove the requirement that the prior use be reduced to practice at
least one year before the effective filing date of such patent. Under H.R. 2795, the defense
would apply where reduction to practice occurred prior to the patent’s filing date.

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patent protection. The provision of prior user rights would allow such entities to
commercialize their inventions when they used the subject matter of the invention
prior to the patent’s filing date, even when they themselves did not pursue patent
rights. For this reason, a more expansive prior user rights regime has also been tied
to adoption of the first-inventor-to-file priority system.150
Proponents of prior user rights also assert that the new legislation would support
investment in technological innovation. Under this view, firms would not longer be
required to engage in extensive defensive patenting, but rather would be able to
devote these resources to further innovation. In addition, some commentators
observe that many U.S. trading partners, including Germany and Japan, currently
allow prior user rights. As a result, U.S. firms that obtain patent rights in certain
foreign nations may face the possibility that a foreign firm may enjoy prior user rights
in that invention. Foreign firms with U.S. patents do not currently face this
possibility with respect to U.S. firms, however. Under this view, adoption of prior
user rights in the United States would “level the playing field” for U.S. industry.151
Proposals to adopt prior user rights have attracted critics, however. Some
observers believe that this regime would benefit large corporations at the expense of
smaller ones. Others believe that individuals who are aware that they can rely upon
prior user rights will be less likely to disclose their inventions through the patent
system. Still others have stated that prior user rights reduce the value of patents and
therefore make innovation less desirable. The role of the U.S. Constitution is
sometimes debated within this context as well. Article I, section 8, clause 8 of the
Constitution provides Congress with the authority to award “inventors the exclusive
right to their . . . discoveries.” Some commentators suggest this language suggests,
or possibly requires, a system of exclusive patent rights, rather than an interest that
may be mitigated by prior user rights.152
Injunctions
35 U.S.C. § 283 currently allows courts to “grant injunctions in accordance with
the principles of equity to prevent the violation of any right secured by patent, on
such terms as the court deems reasonable.”153 H.R. 2795 would add the following
additional language to that statute:
In determining equity, the court shall consider the fairness of the remedy in light
of all the facts and the relevant interests of the parties associated with the
invention. Unless the injunction is entered pursuant to a nonappealable judgment
150 See Gary L. Griswold & F. Andrew Ubel, “Prior User Rights — A Necessary Part of a
First-to-File System,” 26 John Marshall Law Review (1993), 567.
151 Paul R. Morico, “Are Prior User Rights Consistent with Federal Patent Policy?: The U.S.
Considers Legislation to Adopt Prior User Rights,” 78 Journal of the Patent and Trademark
Office Society (1996), 572.
152 See Robert L. Rohrback, “Prior User Rights: Roses or Thorns?,” 2 University of
Baltimore Intellectual Property Review (1993), 1.
15335 U.S.C. § 283.

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of infringement, a court shall stay the injunction pending an appeal upon an
affirmative showing that the stay would not result in irreparable harm to the
owner of the patent and that the balance of the hardships from the stay does not
favor the owner of the patent.154
In other words, this legislation would stipulate that all the facts and relevant interests
must be considered when a court weighs “principles of equity” in deciding whether
to enjoin an adjudicated infringer or not.
Understanding of this proposed reform requires a review of current judicial
precedent concerning the availability of injunctions in patent cases. Under current
law, courts ordinarily grant permanent injunctions to patentees that prevail in
infringement litigation.155 As the Federal Circuit recently explained:
Because the “right to exclude recognized in a patent is but the essence of the
concept of property,” the general rule is that a permanent injunction will issue
once infringement and validity have been adjudged. To be sure, “courts have in
rare instances exercised their discretion to deny injunctive relief in order to
protect the public interest.” Rite-Hite Corp. v. Kelley, Inc., 56 F.3d 1538, 1547
(Fed. Cir.1995); see Roche Prods., Inc. v. Bolar Pharm. Co., 733 F.2d 858, 865-
66 (Fed. Cir.1984) (“standards of the public interest, not the requirements of
private litigation, measure the propriety and need for injunctive relief”). Thus,
we have stated that a court may decline to enter an injunction when “a patentee’s
failure to practice the patented invention frustrates an important public need for
the invention,” such as the need to use an invention to protect public health.156
As this language suggests, few published judicial opinions decline to grant
injunctions against adjudicated patent infringers. The usually cited exception is
the1934 decision in City of Milwaukee v. Activated Sludge,157 where the Court of
Appeals for the Seventh Circuit refused to enjoin infringement of a patented method
for sewage treatment. Had the city of Milwaukee been prevented from using the
patented invention, it would have been required to dump large quantities of raw
sewage into Lake Michigan. Observing that “the health and the lives of more than
half a million people are involved,”158 the court denied the requested injunction.
Because the patentee still obtained judicially determined monetary remedies against
the city of Milwaukee, this outcome essentially amounted to an award of a
compulsory license.
Another notable case, the 1944 decision in Vitamin Technologists, Inc. v.
Wisconsin Alumni Research Foundation,159 involved a patent claiming a method of
irradiating foods to increase Vitamin D content. This treatment helped eliminate the
154 H.R. 2795, § 7.
155 See Richardson v. Suzuki Motor Co., 868 F.2d 1226, 1247 (Fed. Cir. 1989).
156 MercExchange, L.L.C. v. eBay, Inc., 401 F.3d 1323, 1338 (Fed. Cir. 2005) (select
citations omitted).
157 69 F.2d 577 (7th Cir. 1934).
158 Ibid. at 593.
159 146 F.2d 941 (9th Cir. 1944).

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debilitating Vitamin D deficiency disease called rickets. The availability of Vitamin
D-enhanced margarine was particularly important to the poor, who were better able
to afford margarine as compared to butter. The patent proprietor had nonetheless
refused to license the patent to margarine producers. The Court of Appeals for the
Ninth Circuit ultimately held the asserted patents invalid or unenforceable on
conventional grounds. However, the court also discussed the concept that injunctions
should be refused where they act against public health interests.160
Other courts have taken a different route by delaying the effective date of a
permanent injunction rather than refusing it altogether. For example, in Schneider
(Europe) AG v. SciMed Life Systems, Inc.,161 the adjudicated infringer marketed a
rapid-exchange catheter used by surgeons. Although the court concluded that no
evidence of record supported a finding that the infringing product was more safe or
objectively superior to other catheters on the market, the court recognized that some
physicians did strongly prefer the infringing product.162 The court opted to grant a
permanent injunction with a delay of one year from the entry of judgment. The court
reasoned that this year-long transition period would allow surgeons to switch from
the infringing product with a minimum of disruption, at least in comparison with the
immediate imposition of an injunction. The court further provided that the patentee
would receive an escalating royalty during the transition period.163
Some commentators have expressed concerns over the current state of the
law. It has been observed that although the patent statute directs courts to “grant
injunctions in accordance with the principles of equity,”164 in practice courts issue
injunctions in favor of victorious patent proprietors “virtually automatically.”165 In
the view of some observers, this rule has encouraged strategic behavior by
speculators. These speculators do not themselves market goods or services, and thus
do not acquire patents in order to protect their own markets. Rather, they are said to
use patents to threaten manufacturers and service providers. Because such
speculators may legitimately threaten to halt use of the patented invention entirely,
accused infringers may enter into a license on even a dubious patent in the face of
losing the company business. This practice is sometimes termed “trolling,” after
creatures from folklore that would emerge from under a bridge in order to waylay
travelers.166
160 Ibid. at 943-44.
161 852 F. Supp. 813 (D. Minn.1994).
162 Ibid. at 850 — 51.
163 Ibid. at 862.
16435 U.S.C. § 283.
165 W. David Westergard, Remedying the Growing Abuse of the Patent System Through
Targeted Legislation, in Conference Papers on International Intellectual Property Law &
Policy (Fordham Law School March 31, 2005).
166 See Lorraine Woellert, “A Patent War Is Breaking Out on the Hill,” BusinessWeek 45
(July 4, 2005).

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In response, some commentators have observed that not all patentees that
chose not to market their patented inventions are fairly characterized as opportunistic
speculators. Particular individuals or firms may lack the expertise or resources to
produce a patented product, or otherwise have sound business reasons not to do so.
In addition, as the Federal Circuit explained a decade ago:
A patent is granted in exchange for a patentee’s disclosure of an invention,
not for the patentee’s use of the invention. There is no requirement in this
country that a patentee make, use, or sell its patented invention.167
Still other observers view patents as time-limited property rights.168 Under
this view, infringers are properly enjoined so that the patent owner’s exclusive rights
may be preserved. Failing to enjoin infringements may also diminish the incentives
needed for innovators to develop patentable inventions in the first instance.
On the other hand, scholarly commentary concludes that the term “intellectual
property” is one of relatively recent vintage, and that patents can just as readily be
analogized as arising under the tort law, or as constituting a government-granted
subsidy.169 Although viewing a patent as a property right arguably suggests that an
injunction is a suitable remedy for a violation of that right, these alternative
conceptions of the patent grant do not so strongly imply that courts should enjoin
adjudicated infringers as a matter of course. It should also be noted that even
traditional properties, such as real estate, are prospectively subject to numerous
limitations, including easements, zoning restrictions, servitudes, and other
obligations.170
Limitation Upon Damages
Pending legislation would also address the award of damages where the
patented invention forms but one component of the infringer’s larger commercial
product or process. In the wording of H.R. 2795:
In determining a reasonable royalty in the case of a combination, the court
shall consider, if relevant and among other factors, the portion of the
realizable profit that should be credited to the inventive contribution as
distinguished from other features of the combination, the manufacturing
process, business risks, or significant features or improvements added by
the infringer.171
167 Rite-Hite Corp. v. Kelley Co., Inc., 56 F.3d 1538, 1547 (Fed. Cir. 1995).
168 See, e.g., Frank H. Easterbrook, “Intellectual Property is Still Property,” 13 Harvard
Journal of Law and Public Policy (1990), 108.
169 See Mark A. Lemley, “Property, Intellectual Property, and Free Riding,” 83 Texas Law
Review (2005), 1031.
170 See Michael A. Carrier, “Cabining Intellectual Property Through a Property Paradigm,”
54 Duke Law Journal (2004), 1.
171 H.R. 2795, § 6.

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This proposed reform appears to be directed towards perceived concerns
about overly generous damages awards in this context. As one commentator
asserted:
[I]nventors have learned to abuse the patent system and increase leverage
against manufacturers by pursuing “system claims” in the [USPTO]. These
clever claims insert the crux of the predator’s “innovation” into much larger
contexts than that to which the inventor is rightfully entitled. For example,
the abuser may actually have invented a hinge mechanism, but draws the
patent claim to a door including the hinge mechanism. In this example, the
door is well known to, and long in use by, the public but in subsequent
litigation, the patent predator claims entitlement to, and the court awards,
damages based on the entire value of the door rather than on the value of
the innovative hinge.172
Several observations may be made about this proposed reform. First, the
Federal Circuit has explained that:
Virtually all patents are “combination patents,” if by that label one intends
to describe patents having claims to inventions formed of a combination of
elements. It is difficult to visualize, at least in the mechanical-structural
arts, a “non-combination” invention, i.e., an invention consisting of a single
element. Such inventions, if they exist, are rare indeed.173
Under this view, this legislative proposal is of potentially broad application. Further,
the required assessment of the “inventive contribution” of a patented combination —
rather than base its damages determination upon the claims themselves — would
mark a notable change in U.S. patent law. As the Federal Circuit recently stated:
It is well settled that “there is no legally recognizable or protected
‘essential’ element, gist or ‘heart’ of the invention in a combination
patent.” Rather, “‘[t]he invention’ is defined by the claims.”174
Finally the language of H.R. 2795 expressly applies only to an award of a
reasonable royalty. However, the patent statute also authorizes the courts to award
damages equal to the lost profits of the patentee,175 provided the patentee can make
the necessary showing. It is unclear why this proposal is limited to damages awards
based upon reasonable royalties, rather than upon both forms of damages awards
available under the patent laws.
Willful Infringement
Pending legislation would also reform the law of willful infringement. The
patent statute currently provides that the court “may increase the damages up to three
172 Westergard, supra, at 7.
173 Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1540 (Fed. Cir. 1983).
174 Allen Eng’g Corp. v. Bartell Indus., Inc., 299 F.3d 1336, 1345 (Fed. Cir. 2002).
175 35 U.S.C. § 284.

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times the amount found or assessed.”176 An award of enhanced damages, as well as
the amount by which the damages will be increased, is committed to the discretion
of the trial court.177 Although the statute does not specify the circumstances in which
enhanced damages are appropriate, the courts most commonly award them when the
infringer acted in blatant disregard of the patentee’s rights. This circumstance is
termed “willful infringement.”178
Courts will not ordinarily enhance damages due to willful infringement if the
adjudicated infringer did not know of the patent until charged with infringement in
court, or if the infringer acted with the reasonable belief that the patent was not
infringed or that it was invalid. Federal Circuit decisions emphasize the duty of
someone with actual notice of a competitor’s patent to exercise due care in
determining if his acts will infringe that patent. A common way to fulfill this
obligation is to obtain competent legal advice before commencing, or continuing,
activity that may infringe another’s patent.179
Prior to 2004, the Federal Circuit held that when an accused infringer invoked
the attorney-client or work-product privilege, courts should be free to reach an
adverse inference that either (1) no opinion had been obtained or (2) an opinion had
been obtained and was contrary to the infringers’s desire to continue practicing the
patented invention.180 However, in its decision in Knorr-Bremse Systeme fuer
Nutzfahrzeuge GmbH v. Dana Corp.,181 the Federal Circuit expressly overturned this
principle. The Court of Appeals further stressed that the failure to obtain legal advice
did not occasion an adverse inference with respect to willful infringement either.
Following the Knorr-Bremse opinion, willful infringement determinations are based
upon “the totality of circumstances, but without the evidentiary contribution or
presumptive weight of an adverse inference that any opinion of counsel was or would
have been unfavorable.”182
Patent law’s willful infringement doctrine has proven controversial. Some
observers believe that this doctrine ensures that patent rights will be respected in the
marketplace. Critics of the policy believe that the possibility of trebled damages
discourages individuals from reviewing issued patents. Out of fear that their
inquisitiveness will result in multiple damages, innovators may simply avoid looking
at patents until they are sued for infringement. To the extent this observation is
correct, the law of willful infringement discourages the dissemination of technical
176 Ibid.
177 See Read Corp. v. Portec, Inc., 970 F.2d 816, 826 (Fed. Cir. 1992).
178 See Beatrice Foods Co. v. New England Printing & Lithographing Co., 923 F.2d 1576,
1578 (Fed. Cir.1991).
179 See, e.g., Jon E. Wright, “Willful Patent Infringement and Enhanced Damages —
Evolution and Analysis,” 10 George Mason Law Review (2001), 97.
180 See, e.g., Fromson v. Western Litho Plate & Supply Co., 853 F.2d 1568, 1572 (Fed. Cir.
1988).
181 383 F.3d 1337 (Fed. Cir. 2004).
182 Ibid. at 1341.

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knowledge, thereby thwarting one of the principal goals of the patent system. Fear
of increased liability for willful infringement may also discourage firms from
challenging patents of dubious validity. Consequently some have argued that the
patent system should shift to a “no-fault” regime of strictly compensatory damages,
without regard to the state of mind of the adjudicated infringer.183
H.R. 2795 would add several clarifications and changes to the law of willful
infringement. First, a finding of willful infringement would be appropriate only
where (1) the infringer received specific written notice from the patentee and
continued to infringe after a reasonable opportunity to investigate; (2) the infringer
intentionally copied from the patentee with knowledge of the patent; and (3) the
infringer continued to infringe after an adverse court ruling. Second, willful
infringement cannot be found where the infringer possessed an informed, good faith
belief that its conduct was not infringing. Finally, a court may not determine willful
infringement before the date on which a determination is made that the patent is not
invalid, enforceable, and infringed.184
Post-Issuance Opposition Proceedings
Pending legislation would introduce post-issuance opposition proceedings
into U.S. patent law. Oppositions, which are common in foreign patent regimes, are
patent revocation proceedings that are usually administered by authorities from the
national patent office. Oppositions often involve a wide range of potential invalidity
arguments and are conducted through adversarial hearings that resemble courtroom
litigation.
Although the U.S. patent system does not currently include oppositions, the
U.S. patent system has incorporated a so-called reexamination proceeding since
1981. Some commentators have viewed the reexamination as a more limited form
of an opposition. Under the reexamination statute, any individual, including the
patentee, a competitor, and even the USPTO Director, may cite a prior art patent or
printed publication to the USPTO. If the USPTO determines that this reference
raises a “substantial new question of patentability” with respect to an issued patent,
then it will essentially reopen prosecution of the issued patent.
Traditional reexamination proceedings are conducted in an accelerated
fashion on an ex parte basis. Following the American Inventors Protection Act of
1999, an inter partes reexamination allows the requester to participate more fully in
the proceedings through the submission of arguments and the filing of appeals.
Either sort of reexamination may result in a certificate confirming the patentability
of the original claims, an amended patent with narrower claims or a declaration of
patent invalidity.
183 See generally Schechter & Thomas, supra, at § 9.2.5.
184 H.R. 2795, § 6.

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Congress intended reexamination proceedings to serve as an inexpensive
alternative to judicial determinations of patent validity.185 Reexamination also allows
further access to the legal and technical expertise of the USPTO after a patent has
issued.186 However, some commentators believe that reexamination proceedings
have been employed only sparingly and question their effectiveness.187
Some analysts have expressed concern that potential requesters are
discouraged from commencing inter partes reexamination proceedings due to a
statutory provision that limits their future options. In order to discourage abuse of
these proceedings, the inter partes reexamination statute provides that third-party
participants may not later assert that a patent is invalid “on any ground that [they]
raised or could have raised during the inter partes reexamination proceedings.”188
Some observers believe that this potential estoppel effect disinclines potential
requesters from use of this post-issuance proceeding. In apparent response to this
concern, H.R. 2795 would delete the phrase “or could have raised” from the
statute.189 As a result, inter partes reexamination requesters would be limited only
with respect to arguments that they actually made before the USPTO.
In addition to reforming the reexamination statute, H.R. 2795 would create
an additional post-issuance proceeding termed an “opposition.” Under this bill, any
person could commence an opposition either within nine months after the issuance
of the patent, or six months after receiving notice from the patent holder alleging
infringement. The opposition may relate to a wide range of patentability issues,
including double patenting, statutory subject matter, novelty, nonobviousness,
enablement, and definite claiming. The commencement of the opposition is
conditioned upon the USPTO Director’s determination that the opponent has raised
a substantial question of patentability with respect to at least one claim in the patent.
H.R. 2795 further provides that opposition proceedings will be tried before
a panel of three administrative patent judges. In the event that the patentee files an
infringement suit within nine months of patent issuance, or six months of notifying
the alleged infringer, the opposition will be stayed upon the request of the patent
owner. The patent owner may amend its claims during an opposition, provided that
those amendments do not broaden the scope of the claims. The opposition must
conclude within one year of its commencement, although one six-month extension
is possible. The results of opposition proceedings may be appealed to the courts.
Many observers have called for the United States to adopt an opposition
system in order to provide more timely, lower cost, and more efficient review of
185 Mark D. Janis, “Inter Partes Reexamination,” 10 Fordham Intellectual Property, Media
& Entertainment Law Journal (2000), 481.
186 Craig Allen Nard, “Certainty, Fence Building and the Useful Arts,” 74 Indiana Law
Journal (1999), 759.
187 See Schechter & Thomas, supra, at § 7.5.4.
188 35 U.S.C. § 315(c).
189 H.R. 2795, § 9(d).

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issued patents.190 Such a system could potentially improve the quality of issued
patents by weeding out invalid claims. It might also encourage innovative firms to
review issued patents soon after they are granted, thereby increasing the opportunity
for technology spillovers.191 Concerns have arisen over oppositions because they too
may be costly, complex, and prone to abuse as a means for harassing patent
owners.192 A successful opposition proceeding would require a balancing of these
concerns.
Concluding Observations
Pending legislation would arguably work the most sweeping reforms to the
U.S. patent system since the nineteenth century. However, many of these proposals,
such as pre-issuance publication, prior user rights, and oppositions, have already been
implemented in U.S. law to a more limited extent. These and other proposed
modifications, such as the first-inventor-to-file priority system and elimination of the
best mode requirement, also reflect the decades-old patent practices of Europe, Japan,
and our other leading trading partners. As well, many of these changes enjoy the
support of diverse institutions, including the Federal Trade Commission, National
Academies, economists, industry representatives, attorneys, and legal academics.
Other knowledgeable observers are nonetheless concerned that certain of
these proposals would weaken the patent right, thereby diminishing needed
incentives for innovation. Some also believe that changes of this magnitude,
occurring at the same time, do not present the most prudent course for the patent
system. Patent reform therefore confronts Congress with difficult legal, practical,
and policy issues, but also with the apparent possibility for altering and potentially
improving the legal regime that has long been recognized as an engine of innovation
within the U.S. economy.
190 See National Research Council of the National Academies, A Patent System for the 21st
Century (2004), 96.
191 Ibid. at 103.
192 See Mark D. Janis, “Rethinking Reexamination: Toward a Viable Administrative
Revocation System for U.S. Patent Law,” 11 Harvard Journal of Law and Technology
(1997), 1.

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