Patent Reform Act of 2007 Suggests Major U.S. Patent System Reform

Introduced into both the Senate and House of Representatives on April 18, 2007, the Patent Reform Act of 2007 contains sweeping patent reform measures that, if passed, will lead to the U.S. Patent System's most substantial overhaul in over 50 years.

The major provision of the Act is to transition the filing system from first-to-invent to first-to-file. Currently, the U.S. is the only country to have a first-to-invent system, which requires the USPTO to conduct lengthy interference proceedings to determine the first inventor. However, critics claim that the first-to-file system hurts small inventors who are less experienced with the patent application system and results in sloppier applications. In addition, the Act calls for a new procedure to challenge a patent post-grant.

The Act also proposes reforms to patent litigation. One key feature is that for a claimant to receive damages based on the entire market value of the infringing product, the claimant must show that the patent's improvement over the prior art is the predominant basis for an infringing product. Another provision provides for limitations on damages from willful infringement.

Already sponsored by a large group of bipartisan legislators, the Act is also receiving support from companies such as Microsoft, IBM and Cisco. The companies are hopeful that the Act will increase resources for the USPTO and promote greater innovation and productivity.