In Its Rush to Fix Patent Reform, Congress Didn’t Fix Its Biggest Error (Forbes Cross-Post)

By Colleen Chien and Eric Goldman

Congress passed the Leahy-Smith America Invents Act (AIA) (S.23), commonly referred to as “patent reform,” in September 2011.  The AIA is widely acknowledged as the most important change to U.S. patent law since 1952.  The AIA took years of legislative wrangling to pass, and it went through many, many iterations.  The resulting law is a voluminous 59 PDF pages with 37 sections.

As it turns out, not only was this bill quite important, but for its length, it was quite buggy.  With so many words and moving parts in the enacted law, it’s not surprising that some errors crept into the final version.

More than a year after its passage, Congress has just begun fixing the bugs. H.R. 6621, styled as a bill of “technical corrections,” was introduced in the House on Nov. 30 and was approved on December 18 on a super-fast-track (on a motion to suspend the rules).  As introduced, the bill had fourteen separate sections of legislative fixes, ranging from corrections of clear typographical errors to provisions that were quite substantive and potentially contentious. Amidst the frantic end-of-year efforts to avoid the fiscal cliff, the Senate approved the House bill with one change (involving pending patent applications filed before 1995).  Late last night, the House concurred to the Senate’s modified version, sending the bill to the White House, where it undoubtedly will be signed.

What’s most noticeable about H.R. 6621, however, isn’t what it does, but what it didn’t do.  As one of the AIA’s main architects recently said: “There are a few minor errors in the bill and one major error in the bill.” Yet the technical corrections bill, which made 14 fixes to the AIA, didn’t tackle this major error.

The error relates to the scope of estoppel in a procedure called post-grant review (PGR).  By way of background, one of the AIA’s goals was to drive more fights over patent validity into administrative proceedings run by the U.S. Patent & Trademark Office (PTO), rather than have those battles take place in federal court.

One of the centerpieces of this effort is PGR, which allows third parties to challenge patents within the first 9 months of their life. PGR was meant to improve upon pre-AIA proceedings by allowing administrative patent challenges on more grounds and decreasing the challenger’s risk of being estopped from raising any issues later, in litigation, that “could have been raised” in the PGR.  The same “could have been raised” estoppel standard had discouraged patent challengers from bringing administrative challenges under prior PTO rules (see former legislative counsel Joe Matal’s authoritative guide to the AIA, which describes how the earlier procedure was lightly used).

By all accounts, in the AIA, Congress intended to remove the “could have been raised” language and provide a narrower estoppel for PGR proceedings.  As the Congressional committee report explains, the PGR was designed to “remove current disincentives to current administrative processes.”  But something funny happened on the way to the Congressional floor, and the problematic “could have been raised” language was inadvertently inserted into the bill.

We’re not the only ones to recognize the error. House Judiciary Chairman Lamar Smith referred to the AIA’s PGR estoppel standard as “an inadvertent scrivener’s error.” Senate Judiciary Chairman Patrick Leahy, in advocating that the Senate adopt the technical corrections bill, said the PGR estoppel standard in AIA was “unintentional,” and it was “regrettable” the technical corrections bill doesn’t address the issue.  Sen. Leahy expressed “hope we will soon address this issue so that the law accurately reflects Congress’s intent.”  The PTO also thinks Congress made a mistake, saying “Clarity is needed to ensure that the [PGR] provision functions as Congress intended.”

Yet, even with such apparent consensus, the technical corrections bill—which found 14 other errors to fix—perplexingly bypassed the issue.  The next time Congress revisits the AIA to fix the remaining bugs, we hope it will finally get its PGR estoppel standard right.

[Colleen Chien and Eric Goldman are professors at Santa Clara University School of Law. We thank Paul Steadman, a litigation partner in Kirkland & Ellis’ Chicago and Washington, DC offices, for his help explaining post-issuance PTO procedures.]