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From the Hill

Correcting Technical Errors in Legislation or Should Congress be Estopped from a Fast Track Fix to the Screw Up in Post-Grant Review Estoppel?

Hayden W. Gregory

©2015. Published in Landslide, Vol. 7, No. 3, January/February 2015, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.

The enactment of major legislation with numerous and complex provisions is frequently followed shortly thereafter by the enactment of a technical corrections bill. As the name indicates, these bills are designed to correct unintended technical errors in the earlier enactment, such as errors in spelling, formatting, citation, and necessary conforming changes in other statutes. It is understood in Congress that such a bill should include only purely technical changes and that it should not serve as a vehicle for members or stakeholders who lost on substantive issues to have a second bite at the apple. It is equally understood that members and stakeholders who lost on substantive issues will attempt to grab on to the technical correction bill to get a second bite at the apple.

It is within this framework that Congress has been struggling with one proposed correction to the America Invents Act (AIA), the landmark patent law reform bill enacted in September 2011. The issue concerns language that was not in the bill as it was taken up for debate, amended, and voted out of the House Judiciary Committee and sent to the full House, but which somewhat mysteriously appeared in the bill as it arrived in the House. The fact that the language in question was added without being considered and voted on seems to indicate that its inclusion was a technical error and therefore the proper subject of a technical corrections bill. However, opponents of making the correction correctly note that removal of the language in question would be a substantive change, one that would have the effect of significantly expanding the ability of a party who has lost an administrative challenge to challenge the patent in court. So far, these interests have prevailed. The Leahy-Smith America Invents Technical Corrections Act enacted in January 2013 contains no relevant corrective provisions.

There are no written or formal congressional rules of the road for consideration of technical corrections legislation, and to the extent rules or practices are discernable, they seem to draw a line between corrections of unintended results that call for changes that are purely technical in nature, and corrections that will have substantive legal effect. However, as the review of the legislative history that follows suggests, these two concepts are not mutually exclusive. The question becomes: should a legal result produced by a technical error in processing legislation be corrected through the abbreviated consideration afforded by technical corrections legislation, even when the correction results in substantive legal change?

Estoppel in Post Grant Review: Origins of the Issue

The AIA replaced the Inter Partes Patent Reexamination program with a more robust Inter Partes Review (IPR) program and established the Post Grant Review (PGR) program, which provides broader grounds for challenging the validity of issued patents than authorized in IPR.

Administrative proceedings such as these are designed to provide a faster, less costly mechanism for challenging and invalidating patents that should not have been issued. To be effective in achieving this and any other objective, the program or proceeding must provide a framework for challenges that attracts participants—there is no point in throwing a party if no one comes.

In the cost-benefit analysis that precedes a decision to file such an administrative challenge, a potential challenger must consider the consequences of filing such a petition on the ability to mount another challenge against the same patent in a later proceeding. A reasonable person likely will understand and accept that one consequence of basing a challenge upon particular grounds and losing on that challenge will be the inability to subsequently raise the same grounds in another administrative proceeding or in a judicial proceeding. However, if the consequences of losing the challenge extend so far as to preclude an unsuccessful petitioner from later raising any grounds that could have been raised but were not, the “go—no go” question for a potential challenger becomes more difficult.

The debate over the appropriate line to be drawn on the estoppel effect of filing an administrative challenge to a patent has been long and heated, with patent owners who see themselves as more likely to be on the receiving end of such challenges opting for more robust estoppel, extending to all grounds that were raised or could have been raised. Stakeholders more likely to be in the challenger class favor limiting estoppel to grounds actually raised, or actually raised and decided.

Getting Estoppel Right—15 Years and Counting

The AIA was six years in the making, and the estoppel debate raged on from beginning to end. In fact, the debate preceded that six year process by at least another six years. The Inter Partes Reexamination program established by the 1999 American Inventors Protection Act (AIPA) included a provision that estopped a losing requester from later raising a challenge in court on any ground that the requester raised or could have raised in the reexamination proceeding.

Following enactment of the AIPA, petitions under the Inter Partes Reexamination program fell far short of the level expected when the program was being designed and developed, and many identified the allegedly over-inclusive estoppel provisions as the prime cause of its underutilization.

The very first reform bill leading up the AIA, H.R. 2795 introduced by House IP Subcommittee Chairman Lamar Smith in May 2005, proposed to resolve the estoppel issue in favor of the petitioner class. The bill struck “could have raised” from the inter partes reexamination estoppel provisions (IPR had not yet been proposed as a successor to inter partes reexamination). H.R. 2795 also included the first appearance of provisions later enacted as the PGR chapter of the AIA, with narrow estoppel provisions, applicable to any subsequent PTO or court proceeding, barring opposition “on the basis of any issue of fact or law actually decided by the panel and necessary to the determination of that issue.”

While proponents of retaining these broader estoppel provisions contend that they were the product of a conscious decision of Congress and not of a drafting or processing error, the legislative history reveals no support for that contention in the form of legislative acts in Congress preceding the alleged processing error. From the first appearance of proposed post-grant review provisions in 2005 in H.R. 2695, the very first reform bill that led to the enactment of the AIA in 2011, until the unexplained insertion of the expansionary “reasonably could have raised” language in the final bill, H.R. 1249, no such provision was approved by Congress. No such estoppel effect in subsequent court proceedings was called for in any version of any bill passed by either house, or reported by a committee or subcommittee, or even in any bill introduced in Congress.1

The Senate took the lead in the seventh and final year of development and enactment of the AIA. S. 23, introduced January 25, 2011, included one departure from the previous bills’ treatment of PGR estoppel. Those bills would have applied the same “actually raised” standard in subsequent proceedings in both the PTO and in courts. In an apparent political compromise, S. 23 called for broader application of estoppel in PTO proceedings, including the “could have raised standard,” potentially narrowed somewhat by the insertion of “reasonably” before “could have raised.”

Movement toward finally enacting patent reform legislation quickened shortly thereafter when the Senate passed S. 23. To maintain that momentum, House leaders opted to introduce a House bill based largely on S. 23, with identical provisions on PGR estoppel.

When Is an Amendment “Technical and Conforming” and Does Anybody Really Care?

When the House bill, H.R. 1249, was debated and voted on in the House Judiciary Committee on April 14, 2011, several amendments were adopted before the Committee voted to finally approve the bill and report it to the full House. However, no amendments were offered or adopted on the provisions of the bill relating to estoppel. The alleged drafting error consisted of the insertion of language in the final House AIA bill that extended the estoppel effect in a subsequent court proceeding of an unsuccessful PGR challenge to any grounds that the PGR petitioner “reasonably could have raised” as well as to grounds actually raised.

How and why did language never considered or voted on anywhere in the legislative process find its way into the AIA as enacted? There is no official explanation, but consideration of the mechanics of the normal legislative process may be informative. When a bill has been approved and ordered favorably reported by a committee such as the House Judiciary Committee, the Committee proceedings typically conclude with a statement by the Chairman that “staff are directed to make technical and conforming changes.” It then becomes the responsibility of Committee staff to prepare a written report on the bill, and in conjunction with the Office of Legislative Counsel (a separate entity of the House that is charged with the responsibility of providing professional bill drafting and processing services to House members and committee) to prepare the final bill incorporating any amendments adopted in Committee.

Some opponents of a technical fix argue that the staff addition to the bill was a legitimate exercise of its authority to make “technical and conforming” changes. The argument is that applying the “reasonably could have standard” in a subsequent court challenge to a patent claim that survived a PGR challenge simply serves to conform this application of estoppel to that called for by the bill in the other three circumstances calling for estoppel: subsequent PTO or court proceedings following an unsuccessful IPR challenge, and subsequent PTO proceedings following a PGR challenge.

However, this reasoning is of questionable merit. Staff authority to make conforming changes does not include authority to conform one policy to another. In this context, a conforming change is one that conforms a statutory provision, usually one not otherwise addressed in the bill in question, to changes made by the bill. For example, when section 6 of title 35 was rewritten by the AIA to reconstitute the Board of Patent Appeals and Interferences(BPAI) as the Patent Trial and Appeal Board (PTAB), all references elsewhere in statutes to the BPAI should be changed to the new title, and where missing could be inserted by staff under the “technical and conforming” authority.

However, in the end the question whether the issue at hand is the product of a technical error that should be fixed by a noncontroversial technical amendment is largely academic. The real world answer is perhaps found in the comment of soon-to-be Chairman of the Senate Judiciary Committee Charles Grassley, who in a June 20, 2012 hearing commented “hopefully nobody will try to use technical or clarifying language to get something done that they couldn’t get done during the six years that this process was negotiated.”

Ironically, the sound principle enunciated by Senator Grassley might also be applied to support a technical corrections amendment, rather than to oppose one. As the legislative history set out above suggests, it may be that “technical or clarifying language” has already been used to obtain a result that could not be obtained in the six years the AIA was being developed.

Endnote

1. During the development of the AIA, ten reform bills with PGR provisions were introduced. H.R. 2795 and S. 3818 in the 109th Congress; H.R. 1908, S. 1145, and S. 3600 in the 110th; H.R. 1260, S. 515, and S. 610 in the 111th; and S. 23 and H.R. 1249 in the 112th Congress. All called for courts to apply the “actually raised” standard for estoppel based on an earlier unsuccessful post-grant challenge.

Hayden W. Gregory

Hayden W. Gregory is legislative consultant for the ABA Section of Intellectual Property Law in Washington, D.C.