One of the most contentious issues dealing with software patenting (and other technology domains) is that of the reexamination processs, which most agree is unfair to third-party participants. Last month, a bill was introduced into the United States Senate to reform the reexamination process. Here is the bill and its introduction as reported in the Congressional Record 7/29/94. The bill was introduced by Senator DeConcini. Currently it costs $2250 to file a reexamination request. (I typed the following in, so reader beware). ============================================================================== S. 2341 A bill to amend chapter 30 of title 35, United States Code, to afford third parties an opportunity for greater participation in reexamination proceedings before the United States Patent and Trademark Office, and for other purposes; to the Committee on the Judiciary. THE PATENT REEXAMINATION REFORM ACT OF 1994 Mr. DECONCINI. Mr. President, today I would like to introduce a bill, the Patent Reexamination Reform Act of 1994, with the support of the Clinton administration. This legislation will improve our patent reexamination system by broadening the basis for and scope of reexamination proceedings at the Patent and Trademark Office [PTO], increasing participation on reexamination procedures and appeals, and precluding reexamination in specified circumstances. Making these changes will provide patent owners and third parties alike with a cost-effective alternative to patent litigation in Federal courts to resolve many questions of patent validity. WHY IS THE CURRENT REEXAMINATION PROCESS INADEQUATE? In 1981, Congress provided for the reexamination of patents at the PTO. The purpose of reexamination is to provide an alternative to litigation over the validity of a patent. The administrative procedures for reexamination are Ex Parte in nature and allow the patent owner to file amendments, conduct interviews and make appeals. This provides patent owners an efficient means to confirm the patentability of issued patents and to reduce the likelihood of validity challenges. Reexamination concludes with a reexamination certificate which may cancel any claims found to be unpatentable and which confirms the patentability of claims found patentable. However, the Ex Parte nature of reexamination discourages its use as an alternative to validity challenges in Federal Court. Third parties do not perceive the reexamination process to be fair because of their limited ability to participate in the proceedings. Third parties are limited to filing the initial request and filing a reply if the patent owner files a statement in response to the order for reexamination. If the patent owner amends the claims during the reexamination, which occur in over two-thirds of all reexamination proceedings, the third party has no opportunity to comment on the significance of those changes. The restrictions incorporated into the current system have made reexamination a very unattractive option for third parties to challenge patent validity. Complicating this problem is the perception, particularly among juries, that the validity of a patent that successfully emerges from a reexamination is somehow enhanced. This imposes an increased burden upon third parties to prove the invalidity in the courts and makes third parties reluctant to request reexamination at the PTO. Therefore, third parties believe that it is not in their best interest to request reexamination and instead, take the question of validity directly to court. The limited basis and scope of reexamination is another reason third parties become discouraged. Patent claims are currently reexamined only in light of previously issued patents or printed publications. Only new or amended claims are examined under the disclosure and claim requirements of the patent law. To ensure that only valid patents are issued, patent claims should also be reexamined for compliance with the disclosure and claim requirements of the patent law. This means that the PTO would be able to reevaluate compliance with every statutory basis of patentability, other than section 101 compliance, that is typically reviewed during the original examination. The Patent Reexamination Reform Act of 1994 provides for this type of reexamination. HOW ELSE WOULD THIS BILL IMPROVE THE REEXAMINATON PROCESS? Third parties would have the opportunity for meaningful participation in reexamination proceedings under this bill. In place of the current limitations on participation, third parties could submit written comments throughout the reexamination proceedings with minimal added expense or opportunity to harass the patent owner. The PTO also intends to provide, through rule making, the right of third parties to participate in any examiner interview initiated by either the patent owner or the examiner. The bill would also give appeal rights which parallel the rights of patent owners to third parties. This change provides third parties the opportunity to receive judicial review of reexamination decisions and further encourages the use of reexamination as an alternative to litigation. However, third parties are estopped from litigating validity, in any forum, after the U.S. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Court of Appeals determines that a claim is patentable. This maintains a desirable balance between third party participation and an expedited proceeding to reexamination patent validity. This bill contains numerous provisions which would make reexamination proceedings more desirable to third parties. Many positive steps are taken to alleviate the perception of unfairness in the system. A consensus has developed within the patent community and representative patent organizations that there is, in fact, a problem with the reexamination process and that reform is needed. The patent bar, including the American Intellectual Property Law Association (AIPLA), as well as industry trade associations such as Intellectual Property Owners (IPO), National Association of Manufacturers (NAM), the Business Software Alliance, and the Software Publishers Association (SPA) all have indicated their support for a reexamination system that provides greater third party participation. This bill addresses many of the concerns surrounding the issue without upsetting the balance needed to ensure confidence in the patent system. The reforms made by this bill will help build confidence in the patent system in all industries by ensuring that invalid patents can be invalidated more readily, and, conversely, by assuring the public that a patent survives reexamination will remain valid if subsequently enforced in court. I support the changes made by this legislation and feel confident that the bill will provide clear benefits for patent owners and third parties alike, and will improve the operation of the U.S. patent system. Mr. President, I ask unanimous consent that the entire text of the bill be printed in the RECORD. There being no objection, the bill was ordered to be printed in the RECORD, as follows: S. 2341 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the "Patent Reexamination Reform Act of 1994". SECTION 2. DEFINITIONS. Section 100 of title 35, United States Code, is amended by adding at the end thereof the following new subsection: "(e) The term 'third-party requester' means a person requesting reexamination under Section 302 of this title who is not the patent owner." SECTION 3. REEXAMINATION PROCEDURES. (a) REQUEST FOR REEXAMINATION. - Section 302 of title 35, United States Code, is amended to read as follows: "SECTION 302. Request for reexamination" "Any person at any time may file a request for reexamination by the Office of a patent on the bases of any prior art cited under the provisions of section 301 of this title or on the basis of the requirements of section 112 of this title except for the best more requirement. The request must be in writing and must be accompanied by payment of a reexamination fee established by the Commissioner of Patents and Trademarks pursuant to the provisions of section 41 of this title. The request must set forth the pertinency and manner of applying cited prior art to every claim for which reexamination is requested or the manner in which the patent specification or claims fail to comply with the requirements of section 112 of this title. Unless the requesting person is the owner of the patent, the Commissioner promptly will send a copy of the request to the owner of record of the patent." (b) DETERMINATION OF ISSUE BY COMMISSIONER. - Section 303 of title 35, United States Code, is amended to read as follows: "SECTION 303. Determination of issue by Commissioner" "(a) Within three months following the filing of a request for reexamination under the provisions of section 302 of this title, the Commissioner will determine whether a substantial new question of patentability affecting any claim of the patent concerned is raised by the request, with or without consideration of other patents or printed publications. On his own initiative, and at any time, the Commissioner may ^^^ determine whether a substantial new question of patentability is raised by patents and publications discovered by him or cited under the provisions of ^^^ section 301 of this title or by the failure of the patent specification or claims to comply with the requirements of section 112 of this title except for the best more requirement." "(b) A record of the Commissioner's determination under subsection (a) of this section will be placed in the official file of the patent, and a copy promptly will be given or mailed to the owner of record of the patent and to the third-party requester, if any." "(c) A determination by the Commissioner pursuant to subsection (a) of this section will be final and nonappealable. Upon a determination that no substantial new question of patentability has been raised, the Commissioner may refund a portion of the reexamination fee required under section 302 of this title." (c) REEXAMINATION ORDER BY COMMISSIONER. - Section 304 of title 35, United States Code, is amended to read as follows: "SECTION 304. Reexamination order by Commissioner" "If, in a determination made under the provisions of section 303(a) of this title, the Commissioner finds that a substantial new question of patentability affecting any claim of a patent is raised, the determination will include an order for reexamination of the patent for resolution of the question. The order may be accompanied by the initial Office action on the merits of the reexamination conducted in accordance with section 305 of this title." (d) CONDUCT OF REEXAMINATION PROCEEDINGS. - Section 305 of title 35, United States Code, is amended to read as follows: "SECTION 305. Conduct of reexamination proceedings" "(a) Subject to subsection (b) of this section, reexamination will be conducted according to the procedures established for initial examination under the provisions of sections 132 and 133 of this title. In any reexamination proceeding under this chapter, the patent owner will be permitted to propose any amendment to the patent and a new claim or claims hereto in response to a decision adverse to the patentability of a claim of a patent. No proposed amended or new claim enlarging the scope of the claims of the patent will be permitted in a reexamination proceeding under this chapter." "(b)(1) This subsection shall apply to any reexamination proceeding in which the order for reexamination is based upon a third-party reexamination request." "(b)(2) Any document (other than the reexamination request) filed in a reexamination proceeding by either the patent owner or the third-party requester will be served on any other party." "(b)(3)(a) If the patent owner files a response to any Office action on the merits, the third-party requester may once file written comments within a reasonable period. At a minimum, such comments may be filed within one month after the date of service of the patent owner's response." "(b)(3)(b) Comments filed under this paragraph shall be limited to issues covered by the Office action or the patent owner's response." "(b)(3)(c) Unless otherwise provided by the Commissioner for good cause, all reexamination proceedings under this section, including any appeal to the Board of Patent Appeals and Interferences, will be conducted with special dispatch within the Office." (e) APPEAL. - Section 306 of title 35, United States Code, is amended to read as follows: "(a) The patent owner involved in a reexamination proceeding under this chapter may - (1) appeal under the provisions of section 134 of this title, and may appeal under the provisions of sections 141 through 144 of this title, with respect to any decisions adverse to the patentability of any original or proposed amended or new claim of the patent; or (2) be a party to any appeal taken by a third-party requester under subsection (b) of this section." "(b) A third-party requester may - (1) appeal under the provisions of section 134 of this title, and may appeal under the provisions of sections 141 through 144 of this title, with respect to any final decision favorable to the patentability of any original or proposed amended or new claim of the patent; or (2) be a party to any appeal taken by the patent owner, subject to subsection (c) of this section." "(c) A third-party requester who files a notice of appeal or who participates as a party to an appeal by the patent owner under the provisions of sections 141 through 144 of this title is estopped from later asserting, in any forum, the invalidity of any claim determined to be patentable on appeal on any ground which the third-party requester raised or could have raised during the reexamination proceedings. A third-party requester is deemed not to have participated as a party to an appeal by the patent owner unless, within twenty days after the patent owner has filed notice of appeal, the third-party requester files notice with the Commissioner electing to participate." (f) REEXAMINATION PROHIBITED. - (1) Chapter 30 of title 35, United States Code, is amended by adding the following section at the end thereof: "Section 308. Reexamination prohibited" "(a) Notwithstanding any provision of this chapter, once an order for reexamination of a patent has been issued under section 304 of this title, neither the patent owner nor the third-party, if any, nor privies of either, may file a subsequent request for reexamination of the patent until a reexamination certificate is issued and published under section 307 of this title, unless authorized by the Commissioner." "(b) Once a final decision has been entered against a party in a civil action arising in whole or in part under section 1338 of title 28 that the party has not sustained its burden of proving the invalidity of any patent claim in suit, then neither that party nor its privies may thereafter request reexamination of any such patent claim on the basis of issues which that party or its privies raised or could have raised in such civil action, and a reexamination requested by that party or its privies on the basis of such issues may not thereafter be maintained by the Office, notwithstanding any provision of this chapter." (2) The table of sections for chapter 30 of title 35, United States Code, is amended by adding the following at the end thereof: "308. Reexamination prohibited." SECTION 4. CONFORMING AMENDMENTS (a) BOARD OF PATENT APPEALS AND INTERFERENCES. - The first sentence of section 7(b) of title 35, United States Code, is amended to read as follows: "The Board of Patent Appeals and Interferences shall, on written appeal of an applicant, or a patent owner or a third-party requester in a reexamination proceeding, review adverse decisions of examiners upon applications for patents and decisions of examiners in reexamination proceedings, and shall determine priority and patentability of invention in interferences declared under section 135(a) of this title." (b) PATENT FEES; PATENT AND TRADEMARK SEARCH SYSTEMS. - Section 41(a)(7) of title 35, United States Code, is amended by inserting "or for an unintentionally delayed response by the patent owner in a re-examination proceeding", after "issuing each patent". (c) APPEAL TO THE BOARD OF PATENT APPEALS AND INTERFERENCES. - Section 134 of title 35, United States Code, is amended to read as follows: "Section 134. Appeal to the Board of Patent Appeals and Interferences" "(a) An applicant for a patent, any of whose claims has been twice rejected, may appeal from the decision of the primary examiner to the Board of Patent Appeals and Interference, having once paid the fee for such appeal." "(b) A patent owner in a reexamination proceeding may appeal from the final rejection of any claim by the primary examiner to the Board of Patent Appeals and Interferences, having once paid the fee for such appeal." "(c) A third-party requester may appeal to the Board of Patent Appeals and Interferences from the final decision of the primary examiner favorable to the patentability of any original or proposed amended or new claim of a patent, having once paid the fee for such appeal." (d) APPEAL TO COURT OF APPEALS FOR THE FEDERAL CIRCUIT. - Section 141 of title 35, United States Code, is amended by amending the first sentence to read as follows: "An applicant, a patent owner or a third-party requester, dissatisfied with the final decision in an appeal to the Board of Patent Appeals and Interferences under section 134 of this title, may appeal the decision to the United States Court of Appeals for the Federal Circuit." (e) PROCEEDINGS ON APPEAL. - Section 143 of title 35, United States Code, is amended by amending the third sentence to read as follows: "In ex parte and reexamination cases, the Commissioner shall submit to the court in writing the grounds for the decision of the Patent and Trademark Office, addressing all the issues involved in the appeal." SECTION 5. EFFECTIVE DATES. (a) IN GENERAL. - Sections 2 and 4 and subsections (a), (b), (c), (d), and (e) of section 3 of this Act shall take effect six months after the date of enactment of this Act and shall apply to all reexaminations requests filed on or after such effective date. (b) REEXAMINATION PROHIBITION PROVISION. - Section 1 and subsections (f) and (g) of section (3) of this Act shall take effect on the date of enactment of this Act. ============================================================================== Currently it costs $2250 to file a reexamination request. This fee level is probably too high for software community grass roots efforts to challenge questionable software patents. On the other hand, if the PTO were to lower the fee substantially, it would be inundated with software reexamination requests. At least for software, I do not think Congress has fully modelled the effects of these proposed changes, nor do I think the changes will have much effect on software patenting. It proposes changes too far along in the patenting process, "therapy medicine" as opposed to "preventive medicine". Greg Aharonian Internet Patent News Service (for subscription info, send 'help' to patents@world.std.com) (for prior art search services info, send 'prior' to patents@world.std.com)