On April 18, 2007, members of Congress introduced the Patent Reform Act of 2007, which contains the following proposals:

First-to-File System

Section 3 would convert the United States patent system into a "first-to-file" system, which would give priority to the earlier-filed application for a claimed invention.

Elimination of Interference Proceedings & Creation of Derivation Proceedings

Section 3 includes provisions that would replace interference proceedings (to determine the first to "invent" the claimed invention) with "derivation proceedings" (to determine the inventor with the right to file an application on a claimed invention).

Inventor’s Oath or Declaration

Section 4 includes a provision that would allow an applicant to submit a substitute statement in lieu of the inventor’s oath if the inventor is unable or unwilling to make the oath.

Damages Tied to the Specific Contribution Over the Prior Art

Section 5 includes a provision designed to ensure that "reasonable royalty" damages reflect only the economic value of the patent’s "specific contribution over the prior art," rather than the value of larger goods of which the patented item may be a component.

New Willful Infringement Standard

Section 5 includes provisions that would limit willful infringement to situations where the patent owner establishes that (1) the infringer performed one of the acts of infringement after receiving a detailed written notice from the patentee; (2) the infringer intentionally copied the patented invention with knowledge that it was patented; or (3) after having been found by a court to have infringed a patent, the infringer again infringed on the same patent.

Earlier-User Defense to Infringement

Section 5 includes a proposed defense to infringement based on the alleged infringer’s having commercially used the subject matter prior to the effective date of the claimed invention.

Post-Grant Opposition Procedures

Section 6 would create a post-grant review process at the Patent and Trademark Office, which would allow third-parties to "petition for cancellation" of issued patents within 12 months of the patent’s issue (or whenever there is substantial reason to believe that the continued existence of the challenged claim is likely to cause the petitioner significant economic harm).

In addition, under the proposed rules, successive petitions for cancellation would be barred, the presumption of validity would not apply to any challenged claim, and the patentee would have the opportunity to file one amendment to the patent in response to a challenge.

Submissions by Third Parties

Section 9 would create a mechanism for third parties to submit prior art references that would be relevant to the examination of the application.

Venue and Jurisdiction

Section 10 would amend the venue provisions for patent cases to specify that any patent action must be brought (1) in the district where either party resides, or (2) in the district where the defendant has committed acts of infringement and has a regular and established place of business.

In addition, section 10 would give the Federal Circuit jurisdiction over interlocutory orders regarding claim constructions.

Director’s Regulatory Authority

Section 11 would give the Director of the United States Patent and Trademark Office authority to promulgate certain rules, regulations and orders.

Link to the Senate Bill

Link to the House Bill