Last week, the Senate Committee on the Judiciary held a hearing on the new Patent Reform Act currently before Congress. The committee heard testimony from Jon Dudas (Director of the USPTO), Bruce Bernstein (Chief Intellectual Property and Licensing Officer for InterDigital Communications Corporation), Mary Doyle (Senior Vice President, General Counsel and Secretary for Palm, Inc.), John Squires (Chief Intellectual Property Counsel for Goldman, Sachs and Co.), Kathryn Biberstein (Senior Vice President General Counsel and Secretary, and Chief Compliance Officer for Alkermes, Inc.), and committee member Senator Patrick Leahy. The next several posts on the ‘In the News’ blog will break down the testimony of each member of the panel. Today’s post will analyze Director Dudas’ statements the committee. Director Jon Dudas covered many aspects of the proposed legislation, and opened his statement by emphasizing the importance of “full disclosure” in the patent system. He then talked about the goal of increasing patent and patent application quality through Applicant Quality Submissions (AQSs) and championed the virtues of the Accelerated Examination Program that will “lower pendency, raise productivity and increase quality.” Dudas went on to say that to reach the goal of full disclosure:

Applicants should be given every opportunity and the responsibility to provide more and better information to examiners about their inventions. For such a program to be successful, the USPTO will ensure that requirements for more and better information do not become overly burdensome in general and in particular to independent inventors and small entities.

One of the obstacles to full disclosure is the lack of an incentive to disclose, and in fact, due to the current doctrine of inequitable conduct, the applicant has a perverse incentive NOT to disclose relevant information. As a solution, Dudas proposed using a relevance standard (requiring the withheld information to be relevant for the application to be denied) and bifurcating the issues of intent and the materiality of the withholding of information. Also, given the increased burden placed upon applicants of the expanded informational requirements, Dudas proposed a “micro-entity” status.

The definition of ââ?¬Å?micro-entityââ?¬Â? could be based on a number of factors including: income level; number of patent applications filed; lack of representation by a registered practitioner; and lack of assignment activity. The status would exempt an applicant from some or all of the requirements of an AQSs program.

Dudas went on to state that the USPTO is in favor of letting the courts continue to determine the apportionment of damages through use of the Georgia-Pacific factors as opposed to the method proposed in the Reform Act. Next Dudas came out strongly in favor of retaining treble damages for willful infringement. He also disagreed with expanding the prior use defense and was not in favor of allowing interlocutory appeals to the CAFC after Markman hearings. The Director is in favor of a second window post grant review process, but was unsatisfied with the retroactive nature of the window’s application and voiced his concerns with the increase in workload that it would create for the USPTO. Lastly, Dudas discussed international implications of the Act in the context of a shift to a first-to-file system and application publication requirements. Dudas paid lip service to the importance of global harmonization as a reason to shift to first-to-file, but did not support an immediate conversion to such a system. Instead, the USPTO wants such a shift to be “contingent on significant progress and international agreement” and that they want “a standardized one-year international grace period” to protect inventors who disclose their inventions before filing. Although receptive to the idea of a first-to-file system, Dudas did not agree with the new Act’s removal of the opt-out provision to the publication requirement. Dudas’ testimony can be found in full here.