Patent Legislation Update: New Version of the STRONGER Patents Act, and Proposed Abrogation of Sovereign Immunity

by Ropes & Gray LLP
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STRONGER Patents in 2018?

Last June, Senator Chris Coons (D-DE) and several co-sponsors introduced the Support Technology & Research for Our Nation’s Growth and Economic Resilience (STRONGER) Patents Act of 2017, a pro-patent owner bill that would make significant changes to the patent laws and Patent Office post-grant review proceedings.  While the Senate has taken no action on the bill since, this past week a counterpart was introduced in the House of Representatives. The STRONGER Patents Act of 2018, sponsored by Reps. Steve Stivers (R-OH) and Representative Bill Foster (D-IL), is a near-identical copy of last year’s bill.  This year’s version of the bill, H.R. 5340, would make the same substantial changes to the patent system proposed in last year’s bill, such as: 

  • Requiring the Patent Trial & Appeal Board (PTAB) to use the same standards as district court when it rules on the validity of issued patents
  • Restricting the ability of challengers to file and maintain inter partes review (IPR) proceedings at the PTAB
  • Re-establish presumption of injunctive relief upon a finding of infringement in district court
  • Reverse several Supreme Court precedents in order to make it easier to prove infringement in certain circumstances
  • Empower the Federal Trade Commission and state attorneys general to bring suit against entities who engage in misleading and deceptive practices through the sending of patent infringement demand letters 

No hearings are currently scheduled by the House, but the presence of mirror-image bills in both houses of Congress could assist in moving things forward. 

Much Ado About Sovereign Immunity

The House counterpart of the STRONGER Patents Act isn’t the only recent patent-related legislation to be proposed on Capitol Hill in recent weeks. On March 7, a bipartisan group of senators introduced the Preserving Access to Cost Effective Drugs (PACED) Act.  The PACED Act (S. 2514, text here) appears to be a response to recent assertions of sovereign immunity in PTAB post-grant review proceedings by state entities and Native American tribes.  A prior bill that would have abrogated tribal sovereign immunity in IPR proceedings was introduced last fall by Sen. Claire McCaskill (D-MO), who is a co-sponsor of the PACED Act. 

The PACED Act, however, goes much farther than the prior bill—it would prohibit the assertion of sovereign immunity by any patent owner in all Patent Office proceedings, including IPRs, post-grant reviews, covered business method reviews, ex parte reexaminations, and interferences/derivation proceedings. But in recognition of the Supreme Court’s 1999 holding in Florida Prepaid v. College Savings Bank that Congress could not abrogate patented-related state sovereign immunity absent a finding of a pattern of constitutional violations by the states, the proposed legislation notes that its effect is limited by the 11th Amendment (i.e., the act likely would have no effect on state sovereign immunity). But foreign sovereign entities are expressly included in the act as among those whose sovereign immunity would abrogated, at least in some circumstances.  The PACED Act would also expressly apply to the standards of the Foreign Sovereign Immunities Act (FSIA)—which currently applies only to courts—to Patent Office proceedings in order to determine whether a foreign sovereign patent owner might appropriately raise sovereign immunity claims. 

In proposing to exercise Congress’s plenary authority over Native American tribes, the PACED Act would not stop at Patent Office proceedings. The bill would also overrule certain district court precedent and prohibit Native American tribes from raising sovereign immunity as a defense in district court proceedings involving patent claims (both infringement and declaratory judgment actions).  Additionally, the bill would amend the Tariff Act—the statute governing the U.S. International Trade Commission, a popular venue for patent owners—to bar the assertion of tribal sovereign immunity in that venue as well. 

The issue of sovereign immunity in PTAB proceedings is currently being appealed to the U.S. Court of Appeals for the Federal Circuit, which may issue rulings later this spring or summer. Congress may wait for judicial rulings before proceeding with any action on the PACED Act.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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