Senate Passes S.23 "America Invents Act" by 95-5 Vote

Patent reform legislation has picked up a head of steam and is moving in earnest towards becoming law. Today, March 8, the Senate issued the results of its vote on S.23, the "America Invents Act," reporting that it passed by a landslide: 95-5. The following are Senator Patrick Leahy's comments on the Act:

Today, the Senate voted 95-5 to pass S. 23, the America Invents Act.

After six years of debate and discussion, the Senate has finally acted to make the first meaningful, comprehensive reforms to the nation's patent system in nearly 60 years. Passage of the America Invents Act demonstrates what we can accomplish when we cast aside partisan rhetoric, and focus on working together for the American people and for our future.

The America Invents Act will promote American innovation, create American jobs and grow America's economy, all without spending a penny of taxpayer money. It is commonsense legislation that will help preserve America's position as the global leader in invention and innovation.

The year has changed since Chairman Smith and Mr. Berman introduced the first version of patent reform legislation in 2005 in the House, but the structure and guiding principles of the legislation remain the same. Having coordinated with the leaders in the House through this process, I hope that the House will look favorably on our work and adopt this measure so that it can be sent it to the President without delay and its improvements can take effect in order to encourage American innovation and promote American invention.

As we have noted in past posts, this bill contains some reform to the patent damages statue. The reform is not as extreme as was originally proposed because it does not include specific provisions on the entire market value rule and apportionment but it does contain provisions that would codify the trial judge's gatekeeping role and put a Congressional mandate on ensuring that juries only see damages evidence that is relevant to the theories that are allowed to be presented through the gatekeeping function. If passed into law, S.23 would amend the damages statute to read as follows:

(b) PROCEDURE FOR DETERMINING DAMAGES.

(1) IN GENERAL. The court shall identify the methodologies and factors that are relevant to the determination of damages, and the court or jury shall consider only those methodologies and factors relevant to making such determination.

(2) DISCLOSURE OF CLAIMS. By no later than the entry of the final pretrial order, unless otherwise ordered by the court, the parties shall state, in writing and with particularity, the methodologies and factors the parties propose for instruction to the jury in determining damages under this section, specifying the relevant underlying legal and factual bases for their assertions.

(3) SUFFICIENCY OF EVIDENCE. Prior to the introduction of any evidence concerning the determination of damages, upon motion of either party or sua sponte, the court shall consider whether one or more of a party's damages contentions lacks a legally sufficient evidentiary basis. After providing a nonmovant the opportunity to be heard, and after any further proffer of evidence, briefing, or argument that the court may deem appropriate, the court shall identify on the record those methodologies and factors as to which there is a legally sufficient evidentiary basis, and the court or jury shall consider only those methodologies and factors in making the determination of damages under this section. The court shall only permit the introduction of evidence relating to the determination of damages that is relevant to the methodologies and factors that the court determines may be considered in making the damages determination.

(c) SEQUENCING. Any party may request that a patent-infringement trial be sequenced so that the trier of fact decides questions of the patent's infringement and validity before the issues of damages and willful infringement are tried to the court or the jury. The court shall grant such a request absent good cause to reject the request, such as the absence of issues of significant damages or infringement and validity. The sequencing of a trial pursuant to this subsection shall not affect other matters, such as the timing of discovery. This subsection does not authorize a party to request that the issues of damages and willful infringement be tried to a jury different than the one that will decide questions of the patent's infringement and validity.

Now, the focus shifts to the House. The House is preparing its own version of the legislation. If the House approves S.23, or something similar, it seems like legislative patent damages reform may finally reach fruition, because the White House strongly supports S.23. In fact, on February 28, the Office of Management and Budget released a statement that S.23 is a "fair, balanced and necessary effort to improve patent quality, enable greater work sharing between the USPTO and other countries, improve service to patent applicants and the public at the USPTO and offer productive alternatives to costly and complex litigation."

Tune into www.patent-damages.com for updates on this fast-moving legislative debate.