[Congressional Record Volume 158, Number 171 (Monday, December 31, 2012)]
[Extensions of Remarks]
[Pages E2016-E2017]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      CORRECTING AND IMPROVING THE LEAHY-SMITH AMERICA INVENTS ACT

                                 ______
                                 

                               speech of

                            HON. LAMAR SMITH

                                of texas

                    in the house of representatives

                       Sunday, December 30, 2012

  Mr. SMITH of Texas. Mr. Speaker, I submit the following.


                       Section-by-Section Summary

       (a) Advice of Counsel. The AIA's section 17 created a new 
     Sec. 298 of title 35 that bars the use of evidence of an 
     accused infringer's failure to obtain advice of counsel, or 
     his failure to waive privilege and introduce such opinion, to 
     prove either willfulness or intent to induce infringement. 
     Section 17, however, neglected to specify when this new 
     authority became effective. As a result, Sec. 298 is subject 
     to the default effective date at section 35 of the AIA, and 
     applies only to patents issued one year or later after 
     enactment of the AIA. This subsection makes Sec. 298 
     applicable to all civil actions commenced after the enactment 
     of this Act.
       (b) Transitional Program for CBMs. This subsection corrects 
     two scrivener's errors in section 18 of the AIA. These 
     changes have no substantive effect.
       (c) Joinder of Parties. This subsection corrects a 
     scrivener's error in the new Sec. 299 of title 35. This 
     change has no substantive effect.
       (d) Dead Zones. This subsection fixes two provisions that 
     inadvertently make it impossible to seek either post-grant or 
     inter partes review of a patent during certain time periods. 
     Section 311(c) of title 35 bars anyone from seeking inter 
     partes review of a patent during the first nine months after 
     the patent issues, or until a post-grant review of a patent 
     is completed if such review is instituted. Section 311(c) was 
     intended to preclude challengers from using IPR during the 
     period when they can instead use PGR. The problem with the 
     provision is that, during Senate floor consideration of the 
     AIA in March 2011, another provision was added to the bill 
     via the managers' amendment that allows only first-to-file 
     patents to be challenged in PGR. This provision, at section 
     6(f)(2)(A) of the AIA, was intended to allow USPTO a longer 
     period to prepare to conduct PGR proceedings, and to exclude 
     patents that raise discovery-intensive invention-date and 
     loss-of-right-to-patent issues from PGR. However, Sec. 311(c) 
     takes effect and applies to all petitions for IPR that are 
     filed on or after September 16, 2012. Yet for several years 
     thereafter, almost all patents that are issued will still be 
     first-to-invent patents. And under Sec. 311(c) of title 35, 
     these patents cannot be challenged in IPR during the first 9 
     months after their issuance, while under section 6(f)(2) of 
     the AIA, these patents cannot be challenged in PGR. Paragraph 
     (1) eliminates this nine month ``dead zone'' by making 
     Sec. 311(c) inapplicable to patents that are first-to-invent 
     patents and are thus ineligible for PGR.
       Paragraph (2) addresses another dead zone that is unique to 
     reissue patents. Under Sec. 311(c) of title 35, IPR cannot be 
     sought during the nine months after a patent is reissued. 
     This limit was imposed in order to force challengers to bring 
     a PGR challenge (rather than IPR) against what is, in effect, 
     a new patent. However, Sec. 325(f) of title 35 then bars a 
     challenge to any claim in a reissue patent that is 
     ``identical'' to or ``narrower'' than the claims in the 
     original patent. As a result, such ``identical'' or 
     ``narrower'' claims could not be reviewed in either a PGR or 
     an IPR during the nine months after a reissue. Paragraph (2) 
     eliminates this dead zone by repealing section 311(c)(1)'s 
     limit on filing a petition for inter partes review after a 
     patent has been reissued.
       (e) Correct Inventor. This subsection amends the 
     authorization of settlement in derivation proceedings to 
     refer to ``correct inventor'' in the singular, out of 
     recognition of the fact that it is the entire inventive 
     entity that must be named in the settlement agreement. This 
     change has no substantive effect.
       (f) Required Oath. Paragraph (1) liberalizes the time 
     allowed for an applicant to file the required oath or 
     alternative statement, allowing him to file as late as 
     payment of the issue fee (rather than requiring filing prior 
     to allowance). Paragraph (2) corrects Sec. 115(g)(1) by using 
     ``that claims'' rather than ``who claims,'' since the 
     antecedent for these words is ``application'' rather than 
     ``inventor.'' Paragraph (2)'s change has no substantive 
     effect. (USPTO requests.)
       (g) Travel Expenses and Payment of Administrative Judges. 
     Section 21 of the AIA, which makes minor changes to the law 
     regarding the compensation of USPTO employees for travel and 
     the payment of APJs, was not given its own effective date. 
     This subsection makes these provisions effective upon 
     enactment of the AIA.
       (h) Patent Term Adjustments. This subsection clarifies and 
     improves certain requirements for seeking patent-term 
     adjustments. These changes allow USPTO to provide notice of 
     its PTA determination at the same time as the grant of a 
     patent, and effectively require an applicant who wishes to 
     pursue a civil action under paragraph (4)(A) of Sec. 154(b) 
     to exhaust remedies provided under paragraph 3(B)(ii). These 
     changes are minor, and only apply prospectively to PTAs that 
     are determined and to Sec. 154(b)(4)(A) actions that are 
     commenced after the enactment of this Act. (USPTO request.)
       The Committee is aware that the district court for the 
     Eastern District of Virginia, on November 1 of this year, 
     issued a decision in the case of Exelixis v. Kappos that 
     appears to have adopted a highly problematic interpretation 
     of the patent term adjustment allowed by Sec. 154(b)(1)(B). 
     For reasons that remain unclear, the court concluded that 
     continuations and other events described in the ``not 
     including'' clauses of that subparagraph should not be 
     excluded from the subparagraph's calculation of patent term 
     adjustment, but instead must be read only to toll the three-
     year clock that determines when patent term adjustment begins 
     to accrue under subparagraph (B). The district court's 
     interpretation of subparagraph (B) thus would allow patent 
     term adjustment to accrue for any continued examination 
     sought after the three-year clock has run. Such a result, of 
     course, would allow applicants to postpone their patent's 
     expiration date through dilatory prosecution, the very 
     submarine-patenting tactic that Congress sought to preclude 
     in 1994 when it adopted a 20-year patent term that runs from 
     an application's effective filing date.
       Despite the absurd and undesirable results that would 
     appear to flow from the district court's interpretation, the 
     Committee declines to address this matter at this time. This 
     case was brought to the Committee's attention only very 
     recently, precluding the thorough consideration and 
     consultation that is appropriate before legislation is 
     enacted. Moreover, Congress is not in the business of 
     immediately amending the United States Code in response to 
     every nonfinal legal error made by a trial court. The 
     Committee, of course, reserves the right to address this 
     matter in the future. In the meantime, the fact that the 
     present bill does not amend Sec. 154(b) to address the 
     Exelixis decision should not be construed as congressional 
     acquiescence in or agreement with the reasoning of that 
     decision.
       (i) Improper Applicant. This subsection repeals an 
     unnecessary limitation on who may file an international 
     application designating the United States. (USPTO request.)
       (j) Financial Management Clarifications. This subsection 
     makes several technical changes to Sec. 42 of title 35, 
     concerning USPTO funding. These changes: (1) ensure that the 
     rule requiring that patent fees be spent for patent purposes 
     also applies to RCE fees; and (2) ensure that all USPTO 
     administrative costs will be covered by either patent fees or 
     trademark fees. (USPTO request.)
       (k) Derivation Proceedings. Currently, the third sentence 
     of Sec. 135(a) will allow a derivation proceeding to be 
     sought only within the year after the victim's claim that has 
     been the target of derivation has published. It is possible, 
     however, that a deriver could file first, but delay claiming 
     the derived material until more than a year has elapsed after 
     the victim's claims have published, in other words, until 
     after the current deadline has lapsed. The changes made by 
     this subsection preclude such a scenario by requiring the 
     proceeding to be sought during the year after the publication 
     of the deriver's claim to the invention. These changes also 
     add a definition of ``earlier application'' to Sec. 135(a), 
     correct inconsistencies in the AIA's version of Sec. 135(a), 
     and authorize the PTAB to conduct, and the courts to hear 
     appeals of, interferences commenced after the effective date 
     of the AIA's amendments to Sec. 135(a). (USPTO request.)
       (I) Terms of Public Advisory Committee Members. This 
     subsection makes the terms of PPAC and TPAC members run for 3 
     years

[[Page E2017]]

     from a fixed date (rather than from the date that they are 
     appointed), and requires Chairmen and Vice Chairmen to be 
     designated from among existing members. (Current law 
     designates only a Chairman and gives him a 3-year term.) 
     These changes will produce better coordination of members' 
     terms, will allow experienced Chairmen to be appointed 
     without requiring such individuals to serve two 3-year terms, 
     and will provide for automatic replacement of a Chairman who 
     does not complete his term of service. (AIPLA request.)
       (m) Report on pre-GATT Applications. The URAA amendments 
     took effect on June 8, 1995 but were made inapplicable to 
     applications filed before that effective date. Unfortunately, 
     a small number of applicants may have engaged in clearly 
     dilatory behavior and continue to maintain pending 
     applications with effective-filing dates that precede the 
     URAA effective date.
       It is highly unlikely that the 103d Congress ever conceived 
     that its amendments to Sec. 154(a) would remain inapplicable 
     to applications still pending in this Congress. The issuance 
     of any such patent at this late date would be grossly 
     prejudicial to the public. Many of these applications claim 
     invention dates in the 1980s, and some even claim priority 
     dates in the 1970s. To remove such technology from the public 
     domain in 2012 would work a clear injustice on the public, 
     and would bear no relation to the patent system's purpose of 
     promoting the progress of science and the useful arts.
       An earlier version of this Act included a provision that 
     would have required these applicants to complete prosecution 
     of these applications promptly after the enactment of the 
     Act. To avoid controversy that might delay the enactment of 
     this Act, the present Act substitutes the earlier proposal 
     with a requirement that USPTO issue a report that will 
     provide Congress and the public with relevant information 
     about these applications. The Committee expects that the 
     report will contribute to an understanding of whether these 
     applications present special circumstances that require 
     further legislative, executive, or judicial action in order 
     to ensure transparency and protect the public's interests.
       (n) Micro Entity Definition. This subsection corrects a 
     scrivener's error in the AIA's definition of the ``micro 
     entities'' that are entitled to a fee reduction. This change 
     has no substantive effect.
       (o) Default Effective Date. This subsection provides that 
     the amendments made by this Act apply to proceedings 
     commenced on or after the enactment of the Act, except where 
     the provisions of the Act include their own effective date or 
     modify an existing law's effective date.


                 Other Issues for Future Consideration

       Post-Grant Review Could-Have-Raised Estoppel. The version 
     of post-grant review that was enacted by the Leahy-Smith 
     America Invents Act bars a petitioner who completes such a 
     review from challenging any of the claims of the patent that 
     were reviewed in the proceeding on any ground that the 
     petitioner ``could have raised'' in the post-grant review. 
     Although this broad estoppel first appeared in the bill that 
     was reported by the House Judiciary Committee in June 2011, 
     no amendment adopted by the committee authorized such a 
     change. The change appears to have been made by staff charged 
     with making technical corrections to the bill, who apparently 
     assumed that the omission of could-have-raised estoppel in 
     Sec. 325(e)(2) was an oversight.
       The application of a civil-litigation could-have-raised 
     estoppel to PGR would cripple that proceeding if it is not 
     corrected. All validity issues can be raised in PGR, and must 
     be raised during the first nine months of the patent's life 
     and without the benefit of discovery. Thus if could-have-
     raised estoppel were applied to PGR, a PGR challenger would 
     effectively have to waive the possibility of raising any 
     validity defense against the patent if he is later sued for 
     infringement--and all without an opportunity to adequately 
     investigate enablement and other discovery-intensive issues. 
     In order to ensure that the post-grant review system that 
     USPTO has recently implemented does not simply become a white 
     elephant, it is important that this scrivener's error be 
     corrected in the future. And, lest anyone suggest that the 
     correction of this error is properly regarded as 
     controversial, allow me to note that this correction would 
     simply conform the PGR estoppel provisions to those of the 
     bill that passed the Senate on March 8, 2011, by a vote of 
     95-5.

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