Patent Reform 2017: Changes coming from the Judiciary, Legislative and Executive Branches

While calls for widespread patent reform are not as loud as they have been in previous years, 2017 is shaping up to be a year where we may still see significant change to U.S. patent laws. What will the changes to U.S. patent laws look like over the next year? The better question may be to first ask whether those anticipated changes will be coming from the judiciary, legislative or executive branch, all of which will take center stage at some point in 2017. 

On January 31, 2017, the Intellectual Property Owners Association (IPO), announced the adoption of a resolution supporting legislation to amend 35 U.S.C. § 101. The IPO recommends a legislative solution that would both amend the current language of § 101, and which would add two new subsections to § 101. The IPO language would overrule substantial portions of Mayo v. Prometheus, and would do away with the abstract idea exception to patent eligibility. That IPO has taken a position on legislative language is quite important given the large corporations that make up the Association. AIPLA and the ABA have also had taskforces working on this issue and are supportive of a legislative fix. Additionally, Senator Chris Coons (D-DE) has written that he has concerns about the lack of clarity surrounding 101 jurisprudence and has suggested that it may be necessary for Congress to step in in end the confusion and provide businesses with certainty. Thus, the time could be now for a push to legislatively address the Supreme Court’s subjective 101 jurisprudence. 

On January 30, 2017, President Trump signed an Executive Order to dramatically reduce the number of regulations promulgated by agencies. Under this Executive Order, whenever an agency promulgates a new regulation it must identify at least two existing regulations that will be repealed. Furthermore, the total incremental cost of all new regulations must be no greater than zero. While this applies to all agencies, it seems that patent regulations will be necessarily streamlined. For example, the Federal Circuit is expected to rule that the USPTO has improperly shifted the burden onto patent owners with respect to amending claims in post grant proceedings. Such a ruling would likely require fresh administrative regulations, which would not only change post grant procedures but which would also need to identify at least two existing regulations to be repealed. It could be a very interesting 2017 for the Patent Office. 

Then on February 1, 2017, Congressman Bob Goodlatte (R-VA), who holds the Chairmanship of the House Judiciary Committee, unveiled his agenda for the 115th Congress. Not surprisingly, a portion of his agenda includes additional patent litigation reform in order to address what he characterizes as “truly frivolous lawsuits,” as well as reforms to keep America’s patent laws up to date and copyright reforms to help ensure “America’s global leadership in creativity and innovation continues.” Exactly what these patent litigation reforms will look like has yet to be detailed, but in the 114th Congress it was Goodlatte who introduced the Innovation Act, which was not viewed favorably by many innovators. See here, here, here, here and here.
Even if there are no new administrative regulations or legislative reforms, the Federal Circuit could be quite busy reviewing Patent Office interpretations of the Patent Act and their own regulations. For example, on January 11, 2017, the United States House of Representatives has already passed the Regulatory Accountability Act of 2017, which in part would modify the scope of judicial review for agency actions. If passed by the Senate and signed into law by President Trump, it will authorize courts reviewing agency actions to decide all relevant questions of law de novo, without giving deference to the agency’s interpretation. This would significantly open the door for the Federal Circuit to reconsider all of the Patent Office’s interpretations of the America Invents Act (AIA), particularly many issues associated with post grant proceedings that were previously believed to be settled, including the propriety of using the broadest reasonable interpretation (BRI), among many other thorny issues. 

Then, at some point before the Supreme Court’s term ends in June 2017, we can expect a ruling in the TC Heartland case, which will decide whether 28 U.S.C. § 1400(b) is the sole and exclusive provision governing venue in patent infringement actions. See here and here. The statutes in question will be 28 U.S.C. § 1400(b) and 28 U.S.C. § 1391(c). Pursuant to § 1400(b), a “patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.” Pursuant to § 1391(c), a corporation is deemed to be a resident of “any judicial district in which such defendant is subject to the court’s personal jurisdiction…” The Federal Circuit has for 25 years operated under the belief that 1988 amendments by Congress “rendered the statutory definition of corporate residence found in § 1391 applicable to patent cases.” But in 1957 the Supreme Court specifically ruled that § 1400(b) was the sole and exclusive provision controlling venue in patent infringement cases. The Supreme Court taking this case suggests they are likely overrule the Federal Circuit and say that § 1400(b) is still the only provision controlling venue for patent cases. Regardless of how the Supreme Court decides TC Heartland, you can expect venue reform to return and heat up once the Supreme Court issues a ruling.