In a letter to Senator Patrick J. Leahy, Chairman, Committee on the Judiciary, the Department of Justice waded into the cesspool of patent reform throwing out its opinion on the provisions of the Patent Reform Act of 2007, S. 1145 and H.R. 1908.
Among other critiques having to do with venue and appeals of Markman rulings, the DOJ was set against Section 5(b) of the bill that proposes to amend 35 U.S.C. § 273 to compensate for the change to a first to file system.
Under the present patent act, a prior inventor who has not abandoned, suppressed or concealed his invention may defend against an infringement action by a patentee who made his invention later, under 35 U.S.C. § 102(g). The proposed bill would eliminate prior invention as a defense that would invalidate the patent. H.R. 1908 seeks to compensate for this change by expanding the prior user, or earlier inventor, defense. Thus, rather than invalidating the later inventor’s patent, the earlier inventor defense simply permits that entity to continue its practice of the invention.
The DOJ would like the bill to go even further in order to look out for the government’s interests – the DOJ doesn’t want the government liable for practicing inventions that it has used before the filing of a patent application by some royalty-seeking, ne’er-do-well.
From the DOJ:
First, it is by no means clear that the federal government is covered by this defense at all. Section 273(a)(2), which is not amended by the bill, states that this defense may be asserted by a “nonprofit research laboratory” or a “nonprofit entity such as a university, research center, or hospital.” There is some risk that a court might interpret the list of examples given for a nonprofit entity as limiting, and therefore, hold that the federal government is not covered by the defense. The bill should amend § 273(a)(2) to explicitly include the federal government.
A further problem is that the federal government often develops inventions for its own use in laboratories or research facilities to serve the needs of national security in promoting public safety or welfare. These inventions are frequently fielded through contracts with commercial firms to manufacture embodiments for the government’s use. Under § 273(a)(2)(B), any prior use of an invention in a laboratory or research center would provide a defense to an infringement action only for use in that particular laboratory or research center and not for any subsequent use by other government offices or agencies, or in the performance of government contracts. That would leave the federal government exposed to substantial liability for using an invention made long before in a government laboratory or research center. This puts the federal government in a worse position than it would be under the present law, where it might raise this prior invention as an invalidity defense pursuant to the current § 102(g). Del Mar Engineering Laboratories, Inc. v. United States, 524 F.2d 1178,1182, 1185 (Ct. Cl. 1975), adopting, 186 U.S.P.Q. 42 (Ct. Cl. Trial Div.) (holding that prior invention in government laboratory qualified as invalidating prior invention despite having been subject to national security classification).
We suggest that the government’s practice of developing inventions in laboratories or under research contracts and then using them for the public good either in larger government facilities, or through contractors who perform work on behalf of the government, requires an amendment to take this special role of the federal government into account. As noted, this is particularly true if the prior invention invalidity defense is eliminated by the general revision of patent laws proposed in the bill. We suggest that 35 U.S.C. § 273(a) be amended by amending 35 U.S.C. § 273(a)(2) by inserting “the federal government,” after “nonprofit research laboratory” and inserting a new subsection, which after the deletion of the present subsections § 273(a)(3) and (4) proposed by Section 5(d)(l)(C) of the bill would then become new § 273(a)(3):
For purposes of this section, the federal government, and any contractors working for it with its authorization and consent to use patented inventions, shall be considered a single entity.
The suggested amendment would assure that the government, and the public, would not face substantially greater liability if the patent law are revised to adopt a first file system for continuing to use inventions that were already made and paid for by the public.
See the entire letter here: DOJ Patent Reform Letter