112TH CONGRESS
`1st Session
`
`"
`
`HOUSE OF REPRESENTATIVES
`
`!
`
`REPT. 112–98
`Part 1
`
`AMERICA INVENTS ACT
`
`JUNE 1, 2011.—Committed to the Committee of the Whole House on the State of
`the Union and ordered to be printed
`
`Mr. SMITH of Texas, from the Committee on the Judiciary,
`submitted the following
`
`R E P O R T
`
`together with
`
`DISSENTING VIEWS AND ADDITIONAL VIEWS
`
`[To accompany H.R. 1249]
`
`[Including cost estimate of the Congressional Budget Office]
`The Committee on the Judiciary, to whom was referred the bill
`(H.R. 1249) to amend title 35, United States Code, to provide for
`patent reform, having considered the same, reports favorably there-
`on with an amendment and recommends that the bill as amended
`do pass.
`
`CONTENTS
`
`Page
`1
`......................................................................................................
`The Amendment
`38
`Purpose and Summary ............................................................................................
`40
`Background and Need for the Legislation .............................................................
`57
`Hearings ...................................................................................................................
`58
`Committee Consideration ........................................................................................
`58
`Committee Votes ......................................................................................................
`63
`Committee Oversight Findings ...............................................................................
`63
`New Budget Authority and Tax Expenditures ......................................................
`63
`Congressional Budget Office Cost Estimate ..........................................................
`73
`Performance Goals and Objectives .........................................................................
`73
`Advisory on Earmarks .............................................................................................
`73
`Section-by-Section Analysis
`....................................................................................
`85
`Agency Views ...........................................................................................................
`89
`Changes in Existing Law Made by the Bill, as Reported .....................................
`Dissenting Views
`..................................................................................................... 162
`Additional Views ...................................................................................................... 163
`
`99–006
`
`VerDate Mar 15 2010 23:58 Jun 01, 2011 Jkt 099006 PO 00000 Frm 00001 Fmt 6659 Sfmt 6646 E:\HR\OC\HR098P1.XXX HR098P1
`
`jbell on DSKDVH8Z91PROD with REPORTS
`
`Purdue 2045
`Collegium v. Purdue, PGR2018-00048
`
`

`

`18
`
`‘‘(6) prescribing sanctions for abuse of discovery, abuse of process, or any
`other improper use of the proceeding, such as to harass or to cause unnecessary
`delay or an unnecessary increase in the cost of the proceeding;
`‘‘(7) providing for protective orders governing the exchange and submission
`of confidential information;
`‘‘(8) providing for the filing by the patent owner of a response to the petition
`under section 323 after a post-grant review has been instituted, and requiring
`that the patent owner file with such response, through affidavits or declara-
`tions, any additional factual evidence and expert opinions on which the patent
`owner relies in support of the response;
`‘‘(9) setting forth standards and procedures for allowing the patent owner
`to move to amend the patent under subsection (d) to cancel a challenged claim
`or propose a reasonable number of substitute claims, and ensuring that any in-
`formation submitted by the patent owner in support of any amendment entered
`under subsection (d) is made available to the public as part of the prosecution
`history of the patent;
`‘‘(10) providing either party with the right to an oral hearing as part of the
`proceeding; and
`‘‘(11) requiring that the final determination in any post-grant review be
`issued not later than 1 year after the date on which the Director notices the
`institution of a proceeding under this chapter, except that the Director may, for
`good cause shown, extend the 1-year period by not more than 6 months, and
`may adjust the time periods in this paragraph in the case of joinder under sec-
`tion 325(c).
`‘‘(b) CONSIDERATIONS.—In prescribing regulations under this section, the Direc-
`tor shall consider the effect of any such regulation on the economy, the integrity of
`the patent system, the efficient administration of the Office, and the ability of the
`Office to timely complete proceedings instituted under this chapter.
`‘‘(c) PATENT TRIAL AND APPEAL BOARD.—The Patent Trial and Appeal Board
`shall, in accordance with section 6, conduct each post-grant review instituted under
`this chapter.
`‘‘(d) AMENDMENT OF THE PATENT.—
`‘‘(1) IN GENERAL.—During a post-grant review instituted under this chapter,
`the patent owner may file 1 motion to amend the patent in 1 or more of the
`following ways:
`‘‘(A) Cancel any challenged patent claim.
`‘‘(B) For each challenged claim, propose a reasonable number of sub-
`stitute claims.
`‘‘(2) ADDITIONAL MOTIONS.—Additional motions to amend may be permitted
`upon the joint request of the petitioner and the patent owner to materially ad-
`vance the settlement of a proceeding under section 327, or upon the request of
`the patent owner for good cause shown.
`‘‘(3) SCOPE OF CLAIMS.—An amendment under this subsection may not en-
`large the scope of the claims of the patent or introduce new matter.
`‘‘(e) EVIDENTIARY STANDARDS.—In a post-grant review instituted under this
`chapter, the petitioner shall have the burden of proving a proposition of
`unpatentability by a preponderance of the evidence.
`‘‘§ 327. Settlement
`‘‘(a) IN GENERAL.—A post-grant review instituted under this chapter shall be
`terminated with respect to any petitioner upon the joint request of the petitioner
`and the patent owner, unless the Office has decided the merits of the proceeding
`before the request for termination is filed. If the post-grant review is terminated
`with respect to a petitioner under this section, no estoppel under section 325(e) shall
`attach to the petitioner, or to the real party in interest or privy of the petitioner,
`on the basis of that petitioner’s institution of that post-grant review. If no petitioner
`remains in the post-grant review, the Office may terminate the post-grant review
`or proceed to a final written decision under section 328(a).
`‘‘(b) AGREEMENTS IN WRITING.—Any agreement or understanding between the
`patent owner and a petitioner, including any collateral agreements referred to in
`such agreement or understanding, made in connection with, or in contemplation of,
`the termination of a post-grant review under this section shall be in writing, and
`a true copy of such agreement or understanding shall be filed in the Office before
`the termination of the post-grant review as between the parties. At the request of
`a party to the proceeding, the agreement or understanding shall be treated as busi-
`ness confidential information, shall be kept separate from the file of the involved
`patents, and shall be made available only to Federal Government agencies on writ-
`ten request, or to any person on a showing of good cause.
`
`VerDate Mar 15 2010 23:58 Jun 01, 2011 Jkt 099006 PO 00000 Frm 00018 Fmt 6659 Sfmt 6621 E:\HR\OC\HR098P1.XXX HR098P1
`
`jbell on DSKDVH8Z91PROD with REPORTS
`
`Purdue 2045
`Collegium v. Purdue, PGR2018-00048
`
`

`

`40
`
`should not have issued; and reducing unwarranted litigation costs
`and inconsistent damage awards.
`The purpose of the ‘‘America Invents Act,’’ as reported by the
`Committee on the Judiciary, is to ensure that the patent system in
`the 21st century reflects the constitutional imperative. Congress
`must promote innovation by granting inventors temporally limited
`monopolies on their inventions in a manner that ultimately bene-
`fits the public through the disclosure of the invention to the public.
`The legislation is designed to establish a more efficient and stream-
`lined patent system that will improve patent quality and limit un-
`necessary and counterproductive litigation costs.
`If the United States is to maintain its competitive edge in the
`global economy, it needs a system that will support and reward all
`innovators with high quality patents. The Committee has taken
`testimony from and its members have held meetings with inter-
`ested parties that have different and often conflicting perspectives
`on the patent system. The Committee has taken all of those views
`into consideration, and drafted and then amended the ‘‘America In-
`vents Act’’ to balance the competing interests. The legislation or-
`dered reported by the Committee on a vote of 32–3 is a consensus
`approach that will modernize the United States patent system in
`significant respects.
`Background and Need for the Legislation
`First Inventor to File
`The ‘‘America Invents Act’’ creates a new ‘‘first-inventor-to-file’’
`system. Every industrialized nation other than the United States
`uses a patent priority system commonly referred to as ‘‘first-to-file.’’
`In a first-to-file system, when more than one application claiming
`the same invention is filed, the priority of a right to a patent is
`based on the earlier-filed application. The United States, by con-
`trast, currently uses a ‘‘first-to-invent’’ system, in which priority is
`established through a proceeding to determine which applicant ac-
`tually invented the claimed invention first. Differences between the
`two systems arise in large part from the date that is most relevant
`to each respective system. In a first-to-file system, the filing date
`of the application is most relevant;10 the filing date of an applica-
`tion is an objective date, simple to determine, for it is listed on the
`face of the patent. In contrast, in a first-to-invent system, the date
`the invention claimed in the application was actually invented is
`the determinative date. Unlike the objective date of filing, the date
`someone invents something is often uncertain, and, when disputed,
`typically requires corroborating evidence as part of an adjudication.
`There are significant, practical differences between the two sys-
`tems. Among them is the ease of determining the right to a claimed
`invention in the instance in which two different people file patent
`applications for the same invention. In a first-to-file system, the ap-
`plication with the earlier filing date prevails and will be awarded
`the patent, if one issues. In the first-to-invent system, a lengthy,
`complex and costly administrative proceeding (called an ‘‘inter-
`ference proceeding’’) must be conducted at the United States Patent
`and Trademark Office (‘‘USPTO’’) to determine who actually in-
`
`10 When the term ‘‘filing date’’ is used herein, it is also meant to include, when appropriate,
`the effective filing date, i.e., the earliest date the claim in an application-claims priority.
`
`VerDate Mar 15 2010 23:58 Jun 01, 2011 Jkt 099006 PO 00000 Frm 00040 Fmt 6659 Sfmt 6601 E:\HR\OC\HR098P1.XXX HR098P1
`
`jbell on DSKDVH8Z91PROD with REPORTS
`
`Purdue 2045
`Collegium v. Purdue, PGR2018-00048
`
`

`

`47
`
`ceeding ‘‘inter partes review.’’ The Act also makes the following im-
`provements to this proceeding:
`• ‘‘Reasonable likelihood of success’’ for instituting inter
`partes review. The threshold for initiating an inter partes
`review is elevated from ‘‘significant new question of patent-
`ability’’—a standard that currently allows 95% of all re-
`quests to be granted—to a standard requiring petitioners to
`present information showing that their challenge has a rea-
`sonable likelihood of success. Satisfaction of the new thresh-
`old will be assessed based on the information presented both
`in the petition for the proceeding and in the patent owner’s
`response to the petition.
`• ‘‘Reasonably could have raised’’ estoppel applied to
`subsequent administrative proceedings. A party that
`uses inter partes review is estopped from raising in a subse-
`quent PTO proceeding (such as an ex parte reexam or inter
`partes review) any issue that it raised or reasonably could
`have raised in the inter partes review.
`• Repeal of the 1999 limit. The limit on challenging patents
`issued before 1999 in inter partes reexamination is elimi-
`nated; all patents can be challenged in inter partes review.
`• Preponderance burden. Petitioners bear the burden of
`proving that a patent is invalid by a preponderance of the
`evidence in inter partes review.
`• Time limits during litigation. Parties who want to use
`inter partes review during litigation are required to seek a
`proceeding within 12 months of being served with a com-
`plaint alleging infringement of the patent, and are barred
`from seeking or maintaining an inter partes review if they
`file an action for a declaratory judgment that the patent is
`invalid.
`• Discovery. Parties may depose witnesses submitting affida-
`vits or declarations and seek such discovery as the Patent
`Office determines is otherwise necessary in the interest of
`justice.
`• 12- to 18-month deadline. Inter partes review must be
`completed within 1 year of when the proceeding is instituted,
`except that the Office can extend this deadline by 6 months
`for good cause.
`• Oral hearing. Each party has the right to request an oral
`hearing as part of an inter partes review.
`• Three-judge panels. Inter partes reviews will be conducted
`before a panel of three APJs. Decisions will be appealed di-
`rectly to the Federal Circuit.
`The Act also creates a new post-grant opposition procedure that
`can be utilized during the first 12 months after the grant of a pat-
`ent or issue of a reissue patent. Unlike reexamination proceedings,
`which provide only a limited basis on which to consider whether a
`patent should have issued, the post-grant review proceeding per-
`mits a challenge on any ground related to invalidity under section
`282. The intent of the post-grant review process is to enable early
`
`VerDate Mar 15 2010 23:58 Jun 01, 2011 Jkt 099006 PO 00000 Frm 00047 Fmt 6659 Sfmt 6601 E:\HR\OC\HR098P1.XXX HR098P1
`
`jbell on DSKDVH8Z91PROD with REPORTS
`
`Purdue 2045
`Collegium v. Purdue, PGR2018-00048
`
`

`

`48
`
`challenges to patents, while still protecting the rights of inventors
`and patent owners against new patent challenges unbounded in
`time and scope. The Committee believes that this new, early-stage
`process for challenging patent validity and its clear procedures for
`submission of art will make the patent system more efficient and
`improve the quality of patents and the patent system. This new,
`but time-limited, post-grant review procedure will provide a mean-
`ingful opportunity to improve patent quality and restore confidence
`in the presumption of validity that comes with issued patents in
`court.
`In utilizing the post-grant review process, petitioners, real par-
`ties in interest, and their privies are precluded from improperly
`mounting multiple challenges to a patent or initiating challenges
`after filing a civil action challenging the validity a claim in the pat-
`ent. Further, a final decision in a post-grant review process will
`prevent the petitioner, a real party in interest, or its privy from
`challenging any patent claim on a ground that was raised in the
`post-grant review process. The post-grant review procedure is not
`intended, however, to inhibit patent owners from pursuing the var-
`ious avenues of enforcement of their rights under a patent, and the
`amendment makes clear that the filing or institution of a post-
`grant review proceeding does not limit a patent owner from com-
`mencing such actions.
`The Committee recognizes the importance of quiet title to patent
`owners to ensure continued investment resources. While this
`amendment is intended to remove current disincentives to current
`administrative processes, the changes made by it are not to be used
`as tools for harassment or a means to prevent market entry
`through repeated litigation and administrative attacks on the va-
`lidity of a patent. Doing so would frustrate the purpose of the sec-
`tion as providing quick and cost effective alternatives to litigation.
`Further, such activity would divert resources from the research and
`development of inventions. As such, the Committee intends for the
`USPTO to address potential abuses and current inefficiencies
`under its expanded procedural authority.
`Patent Trial and Appeal Board.
`The Act renames the Patent Board the ‘‘Patent Trial and Appeal
`Board’’ and sets forth its duties, which are expanded to include ju-
`risdiction over the new post-grant review and derivation pro-
`ceedings. This section strikes references to proceedings eliminated
`by the Act, including interference proceedings, and updates the
`various appeals statutes.
`Preissuance submissions by third parties
`After an application is published, members of the public—most
`likely, a competitor or someone else familiar with the patented in-
`vention’s field—may realize they have information relevant to a
`pending application. The relevant information may include prior
`art that would prohibit the pending application from issuing as a
`patent. Current USPTO rules permit the submission of such prior
`art by third parties only if it is in the form of a patent or publica-
`tion,43 but the submitter is precluded from explaining why the
`
`43 See 35 C.F.R. § 1.99.
`
`VerDate Mar 15 2010 23:58 Jun 01, 2011 Jkt 099006 PO 00000 Frm 00048 Fmt 6659 Sfmt 6601 E:\HR\OC\HR098P1.XXX HR098P1
`
`jbell on DSKDVH8Z91PROD with REPORTS
`
`Purdue 2045
`Collegium v. Purdue, PGR2018-00048
`
`