Excerpts from House Courts, the Internet, and Intellectual Property Subcommittee Markup of HR 1866 and HR 1886.
Transcribed by Tech Law Journal from its audio recording of the hearing.

Rep. Coble: "... HR 1866 is intended to overturn the 1997 In Re Portola Packaging case. This decision has been widely criticized as undermining the goals of Congress when it passed the 1980 reexamination statute. Further, the case is criticized for having established an illogical and overly strict bar concerning the scope of reexamination requests. The bill that is under consideration preserves the substantial question standard, which I like to call the speed bump. We kept the speed bump intact. That is an important safeguard to protecting vendors against frivolous action, while allowing the process to continue as originally intended. I believe that by adding this one sentence to the Patent Act, we will help prevent the misuse of defective patents, especially those concerning business methods. ..."

Rep. Berman: "I think you start us down the road, and I emphasize, START, down the road, of making reexamination a far more attractive and effective option for challenging a patent's validity. I look forward to working with you on additional legislation to further the improve the robustness and effectiveness of post grant challenges. In particular, Mr. Chairman, I hope we can expand post grant challenges to address the full range of novelty, non-obviousness, and specificity requirements for patentability. I believe post grant challenges should have less draconian estoppel provisions than those applied currently to inter partes reexamination. We should look to the burden of proof, as it applies in post grant challenges, as well as the adjudicator's discretion to gather additional evidence. I also hope that we can work out some mutually acceptable legislation to increase the strength of patents that are issued by improving the examination process, for example, by improving the prior art available to examiners. Preventing bad patents from issuing is just as important as curing defects in issued patents. ..."

"1866 ... the purpose of your legislation here is to overturn the 1997 Federal Circuit Court decision In Re Portola Packaging Inc. In that case the Federal Circuit narrowly construed the term "substantial new question of patentability" to mean prior art that was not before the examiner during an earlier examination. Because the PTO Director can only order a reexamination if a substantial new question of patentability exists, the Federal Circuit's decision effectively bars the PTO from conducting a reexamination based on prior art that was cited in the patent application. The Portola decision is troublesome because it prevents reexaminations from correcting mistakes made examiners. Ideally, a reaxamination should be requested based on prior art cited by an applicant that the examiner failed to adequately consider. But after Portola, such prior art could not be the basis for a reexamination, even if the patent examiner made -- either ignored the prior art submitted, or cited, or made a mistake in his conclusion that that did not justify denying the patent. By overturning the Portola decision, HR 1866 will allow reexamination to correct some examiner errors. ..."

"It seems crazy. You are going to allow a reexamination, invoked by a third party, on the question of prior art. And then, to exclude reviewing whether or not the examiner made the correct determination on prior art that was cited in the patent application, takes away a substantial part of what that reexam was intended to cover."

Rep. Lofgren: "... I for one am not yet sure about burden of proof issues, and some of the other matters mentioned by our Ranking Member [Berman]. I think we need to do some more thinking about that. But, clearly, these two measures are well within what we have attempted to do in the past, and I am glad that the Chairman is expediting action on them."

Rep. Coble: "... 1886 ... This is purely a housekeeping bill. This bill aims at closing an unfortunate administrative loophole and bridging a legal gap in the working of our patent system. This reform also comes as a result of the two hearing that our Subcommittee has conducted this session. It is necessary to place a check on the actions of the Patent and Trademark Office, by affording all participants judicial review before federal appeals courts. Rest assured that this appellate review will not impose additional burdens on patent holders arising from federal trials. ..."