Expanded Business Method Patent Review

Although there are several patent reform bills that have been proposed in Congress, the STOP Act seems to be gaining the greatest traction. It would make the U.S. Patent and Trademark Office’s Transitional Business Method Program permanent and expand it to other industries.

The new post-grant review procedures under the America Invents Act allow a third party to challenge a patent’s invalidity on a number of grounds, including prior art, lack of enablement, lack of novelty, or inadequate written description, before a patent infringement lawsuit proceeds in court. Thus, post-grant review allows parties to raise a number of new challenges that were previously reserved for litigation.

Under the proposed legislation, the definition of “covered business methods” would be expanded to include “an enterprise” or “a product.” These definitional changes would bring all business method patents, including those involving software, under the purview of post-grant review procedures. The STOP Act, sponsored by Reps. Darrell Issa and Judy Chu, closely mirrors Senate legislation recently introduced by Sen. Chuck Schumer.

Most recently, the STOP Act has garnered the support of nearly 50 major U.S. companies, including Morgan Stanley, Google, Wal-Mart and Dell. In a letter to leaders of the judiciary committees of both the House and Senate, the companies expressed support for the legislation as a way to combat abusive patent litigation and help ensure high-quality patents.

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