Draft amendment to the Patent Act of 2005 - Pharma’s bill, with a twist

I finally had a chance to review the entire draft amendment to H.R. 2795, the Patent Act of 2005.  The draft amendment is in the nature of a substitute, meaning that, if the amendment is entered, the entire text of the original bill, save the enacting clause, will be replaced with the text of the amendment.

The draft amendment appears to be the reform bill the pharmaceutical industry wanted.  The industry’s two major complaints with the original bill — change to the injunctive relief calculus and the existence of a ‘second window’ within which post grant review of an issued patent can be initiated by a third party — have been completely eliminated.

The original bill also grants authority to the Director to place limits on continuation applications, which are used heavily by the industry.  The draft amendment completely eliminates this provision as well.

The draft amendment clearly addresses all of the pharmaceutical industry’s major complaints about the Patent Act of 2005.  It’s almost as if someone asked the industry for its ideal bill.

The draft amendment includes one new provision that is quite interesting.  Section 9, entitled Venue, has very strong language limiting the venue for patent civil actions:

“Any civil action arising under any Act of Congress relating to patents, other than an action for declaratory judgment or an action seeking review of a decision of the Board of Patent Appeals under chapter 13 of title 35, may be brought only –

1) in the judicial district where the defendant resides;

2) in the judicial district where the defendant has committed acts of infringement and has a regular and established place of business; or

3) if the plaintiff is a not-for-profit educational institution that owned the rights of the patents in suit as of the effective filing date of those patents, in any judicial district in which the defendant is subject to personal jurisdiction at the time the action is commenced.”

Under this structure, qualified educational institutions can bring suit in any federal court having personal jurisdiction over the defendant, but all other plaintiffs must bring suit in a venue that is favorable to the defendant, at least in a geographic sense.

Is this designed for the so-called patent trolls?  Is it an attempt to force them to take their actions to their defendants?

Here’s the big question on the venue provision — was it included as a concession for the other changes?  Is the draft amendment actually a product of compromise?