Hatch Makes 'Inequitable Conduct' Defense
Sen. Orrin Hatch, R-Utah, on Wednesday laid out his argument for why legislation he cosponsored with Senate Judiciary Chairman Patrick Leahy should include an "inequitable conduct" provision that would rule patents invalid if owners are not forthcoming to the Patent and Trademark Office. The language was part of a bill that passed Leahy's panel last Congress but was axed from the version they reintroduced this year. "Inequitable conduct reform is core to patent reform, as it dictates how patents are prosecuted years before litigation," Hatch told a symposium on the U.S. Court of Appeals for the Federal Circuit.
The inequitable conduct defense is frequently pled, rarely proven, and always drives up the cost of litigation, he said. If an inequitable conduct claim wins, a valid patent will be held entirely void, and the infringer walks away without any liability, he added. There is "virtually no downside for the infringer to raise this type of attack." Yet Hatch acknowledged the generic drug industry deems the inequitable conduct defense sacrosanct and any attempt to change it will be met with opposition. Once compromise is reached on that issue and on how to calculate damages in a patent lawsuit, "the rest of the bill will fall into place," he said.
With respect to damages, Hatch said specific language like "apportionment, contribution over prior art, or essential features" has been dismissed by many but at last week's Judiciary hearing, Hatch said he heard agreement on a gatekeeper approach where a judge instructs juries on what factors to consider in determining damages and agreement that damages should be based on the economic value of the invention to the infringed product or process. The bill has been listed for a Thursday mark up but will likely be held over. At the event, Hatch also told a joke with the punch line: "But you're a patent attorney, you don't know enough law to hurt anybody." Follow the jump to read it...
I am of reminded of three lawyers who were riding to court together one day and, unfortunately, were killed in a horrible traffic accident.
When they reached the pearly gates, St. Peter welcomed them in turn, and said to the first lawyer: "Welcome to heaven. Can you tell me what you did while you were on earth?" to which he replied, "I was a divorce lawyer, and tried to help couples who had difficulties in their relationship."
Well, St. Peter thought about this and said "I see, you were taking advantage of people who were willing to pay anything to get back at their partner," and he swiftly pulled the lever dropping the hapless lawyer into everlasting hell.
Along comes the second lawyer, and of course St. Peter asks the same thing, the reply being, "I was a personal injury attorney, trying to assist those who had been unfairly injured." St. Peter just said "Ah yes, that's what we call an ambulance chaser up here," and sent him to the same fiery fate as the first attorney.
Alas, finally the third attorney approaches and tells St. Peter he was a patent attorney.
St. Peter says, "Come on in!" and shows him to heaven's finest suite, just to the right of God, the most lovely angels in attendance, you get the picture.
After a few minutes of this, the patent lawyer finally asks "but St. Peter, you've sent my friends to a fiery eternity, but you welcome me?" "Ah" says St. Peter, "but you're a patent attorney, you don't know enough law to hurt anybody!"
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