TLJ News from February 1-5, 2011

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2/4. The U.S. Patent and Trademark Office (USPTO) published a notice in the Federal Register that requests comments regarding proposed changes to its Prioritized Examination Track (Track I) of the Enhanced Examination Timing Control Procedures. The deadline to submit comments is March 7, 2011. See, Federal Register, February 4, 2011, Vol. 76, No. 24, at Pages 6369-6376. See also, notice in the Federal Register, June 4, 2010, Vol. 75, No. 107, at Pages 31763-31768, and story titled "USPTO Proposes Three Track Patent Examination System" in TLJ Daily E-Mail Alert No. 2,092, June 4, 2010.

2/4. The European Commission (EC) issued a request for comments regarding collective redress. The document [14 pages in PDF], released by the Competition Commissioner, is titled "Commission Staff Working Document: Public Consultation: Towards a Coherent European Approach to Collective Redress". Comments are due by April 30, 2011. See also, EC release.

Senate Judiciary Committee Approves Patent Bill

2/3. The Senate Judiciary Committee (SJC) amended and approved S 23 [LOC | WW], the "Patent Reform Act of 2011". The final vote was unanimous, with Sen. Jon Cornyn (R-TX) voting present. However, many members stated that they plan to bring up further amendments or objections during consideration by the full Senate.

The SJC approved a managers' amendment [9 pages in PDF], and Sen. Dianne Feinstein's (D-CA) and Sen. Jon Kyl's (R-AZ) amendment [1 page in PDF] regarding damages.

The managers' amendment, among other things, would reverse the effect of the Supreme Court's opinion in Holmes Group v. Vornado, regarding federal jurisdiction in patent cases. It also makes technical changes.

Sen. Patrick Leahy (D-VT), the Chairman of the SJC, said that this bill will "improve the quality of patents", and that "the Obama administration supports these efforts".

Sen. Kyl said that "this is the third time that we have marked up this bill", and that he voted against the bill in committee in 2007 and 2009. He said that "important improvements have been made", and this bill is now a "good compromise". Hence, he supports it.

However, he expressed concerns about the language for inter partes reexamination, and that the bill does not go far enough to reign in the doctrine of inequitable conduct.

Business Method Patents. Sen. Charles Schumer (D-NY) offered, with Sen. Kyl, but withdrew, an amendment regarding business method patents.

He argued that "our amendment addresses the scourge of business method patents that is currently plaguing the financial sector. The patent system in the U.S. is designed to protect innovation, inventions, and investments. Business method patents are anathema to that protection" because they are given for common practices.

He continued that often patents are given for widespread practices, of which the U.S. Patent and Trademark Office (USPTO) is unaware, so "bad patents are issued". He said that this rewards clever litigants. He said that his amendment would give the targets of such litigation an administrative remedy at the USPTO in which they could introduce prior art.

Sen. Schumer said that he will vote for the bill in committee, but may not vote for the bill on the Senate floor if his concerns are not addressed.

Sen. Leahy said "let's keep working".

Sen. Dianne Feinstein (D-CA) said that she is "concerned" about business method patents, such as Amazon's "one click purchasing" patent, but "I wonder if we should be there at all in this bill".

Fee Diversion. Sen. Tom Coburn (R-OK) offered and withdrew an amendment to limit the diversion of fees paid to the USPTO.

He said that "If somebody is paying a fee, it should be utilized for that purpose", and "not to run other aspects of the federal government". He said that he plans to offer this amendment on the Senate floor.

Sen. Grassley, Sen. Orrin Hatch (R-UT), Sen. Sheldon Whitehouse (D-RI), Sen. Jon Cornyn (R-TX), and Sen. Amy Klobuchar (D-MN) expressed support for Sen. Coburn's amendment. Sen. Cornyn argued that adequate USPTO funding is essential to patent quality. Sen. Hatch said that USPTO fee diversion is "despicable" and "a tax on innovation".

Sen. Richard Durbin (D-IL), who sits on the Senate Appropriations Committee (SAC), expressed concern about taking oversight authority away from the SAC.

Federal Jurisdiction. Section 17 of the managers' amendment is titled "Intellectual Property Jurisdiction Clarification Act of 2011".

It would amend 28 U.S.C. 1338 to provide that "No State court shall have jurisdiction over any claim for relief arising under any Act of Congress relating to patents, plant variety protection, or copyrights."

Also, it would amend 28 U.S.C. 1295(a)(1) to provide that the U.S. Court of Appeals (FedCir) shall have jurisdiction over "an appeal from a final decision of a district court ... in any civil action arising under, or in any civil action in which a party has asserted a compulsory counterclaim arising under, any Act of Congress relating to patents or plant variety protection".

House Judiciary Committee (HJC) members have sought unsuccessfully to enact similar legislation since the Supreme Court issued its opinion in Holmes Group, Inc. v. Vornado Air Circulation Systems, Inc., 535 U.S. 826 (2002). See, story titled "Supreme Court Rules on Appellate Jurisdiction of Federal Circuit" in TLJ Daily E-Mail Alert No. 443, June 4, 2002.

In the Holmes case the Supreme Court held that the Federal Circuit's appellate jurisdiction cannot be based solely upon a patent counterclaim. Critics of the Holmes opinion have argued that this reduces federal control over IP cases, reduces uniformity of patent law, and encourages forum shopping.

Other Issues. Sen. Charles Grassley (R-IA), the ranking Republican on the SJC, praised the bill's inclusion of a provision limiting patents on tax strategies.

Sen. Feinstein did not offer her amendment to the first inventor to file provision of the bill.

Sen. Schumer did not offer his amendment on "generic drugs".

People and Appointments

2/3. The Senate Judiciary Committee (SJC) approved by voice vote the following nominations:

2/3. The Senate Judiciary Committee (SJC) held an executive business meeting at which it held over consideration the following nominations:

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2/2. The Government Accountability Office (GAO) released a report [78 pages in PDF] titled "Electronic Health Records: DOD and VA Should Remove Barriers and Improve Efforts to Meet Their Common System Needs".

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2/1. The U.S. District Court (EDMich) unsealed a superseding indictment that charges Gregg M. Berger with one count of conspiracy in connection with his participation in a securities e-mail pump and dump scheme. See, Department of Justice (DOJ) release. This is yet another indictment in a long running series of related prosecutions. Other defendants have already been convicted under various federal statutes, including the federal CAN-SPAM Act (18 U.S.C. 1037). See also, stories titled "Ralsky Sentenced to Four Years in Prison" in TLJ Daily E-Mail Alert No. 2,017, November 23, 2009, "DOJ Prosecutes Operators of Pump and Dump Securities Scheme Under CAN-SPAM and CFAA" in TLJ Daily E-Mail Alert No. 1,695, January 4, 2008, "Ralsky, Bown and Others Plead Guilty in CAN-SPAM and CFAA Case" in TLJ Daily E-Mail Alert No. 1,960, June 23, 2009, and "SPAM Software Designer Pleads Guilty in Ralsky Case" in TLJ Daily E-Mail Alert No. 1,968, July 9, 2009.

Go to News from January 26-31, 2011.