- A poor quality or questionable patent is one that is likely invalid or contains claims that are likely overly broad. Those patents can cause competitors to forgo R&D in the areas the patent improperly covers, can increase the practice of "defensive patenting," contribute to the "patent thicket" and create licensing complexities and costs. In order to reduce the number of questionable patents issued, the Patent Report recommends a variety of changes in the existing patent system.
The first change would be legislation to create a new administrative procedure to allow post-grant review of and opposition to patents. This procedure would be designed to allow for meaningful challenges to patent validity short of federal court litigation.
The second change would be legislation to modify the legal standard governing challenges to the validity of a patent from the present "clear and convincing evidence." to a "preponderance of the evidence." According to the Patent Report, the existing circumstances surrounding the issuance of a patent by the PTO suggest that an overly strong presumption of a patent's validity is inappropriate.
The third recommended change is a general tightening in the legal standards used to evaluate whether an invention is "obvious" or not in order to better assure that a development is significant enough to merit a patent.
Lastly, the Patent Report proposes that the PTO be provided with more adequate funding necessary to address issues of patent quality, and that various PTO procedural rules and regulations be modified to enable it to improve the process of patent issuance.
- Legislation should be enacted to require the publication of all patent applications 18 months after the filing of the application. During the time that otherwise passes between the filing of a patent application and the issuance of a patent, an applicant's competitor could have invested substantially in designing and developing a product and bringing it to market, only to discover, once the patent had finally issued, that it was infringing. Relatively recently the law was changed to require the publishing of all patent applications except those filed only within the United States. The Patent Report recommends the elimination of this exception to publication, in the interests of increasing business certainty and promoting rational planning.
- Legislation should be enacted to create intervening or prior user rights to protect parties from infringement allegations that rely on patent claims first introduced in a continuing or other similar application. The Patent Report concludes that, if the patent applicant uses procedures such as continuing applications to extend the period of patent prosecution, the potential for anticompetitive hold-up increases. Intervening or prior user rights should shelter inventors and users that infringe a patent only because of claim amendments following a continuation, provided that the sheltered invention was developed and used before the amended claims were published.
- Legislation should be enacted to require, as a predicate for liability for willful infringement, either actual, written notice of infringement from the patentee, or a showing of deliberate copying of the patentee's invention, knowing it to be patented. According to the Patent Report, this would allow firms to read patents for their disclosure value and to survey the patent landscape without risking liability for willful infringement.
- Finally, the FTC promises to take steps to increase communication between the antitrust agencies and the patent institutions. These steps will include the filing of amicus briefs in important patent cases, asking the PTO Director to reexamine questionable patents that raise competitive concerns and establishing a Liaison Panel between the FTC, the DOJ and the PTO.