Something Worthwhile Out of Washington

09.28.2011 // Posted by: Murray Slovick // Posted in: Articles, New Technology

Statements of fact and or opinions expressed in MarketEye by its contributors are the responsibility of the authors alone and do not imply an opinion of the officers or the representatives of TTI, Inc.

The Federal Government enacts patent reform and considers ways to limit e-waste dumping

Two totally different pieces of legislation, two steps toward international technology harmonization, two key questions. Can the recent overhaul of the nation’s patent system expedite a badly backed up application process? And will a pending federal export bill help curb global e‐waste dumping?

Let’s look at these issues one at a time.

The “America Invents Act” (aka The Leahy-Smith America Invents Act or "Patent Reform Act of 2011,"), enacted by President Obama on September 16 is the first significant change in patent regulations since 1952. The law hopes to ensure that the patent office, now facing a backlog of 1.2 million pending patents (more than 700,000 applications have yet to be reviewed), can streamline the process from the current average of three years to get a patent approved.

Partly because the approval process has become so inefficient and partly because our outdated patent system has become a barrier to innovation, this year, for the first time, China is expected to become the world’s number one patent publisher, surpassing the U.S. and Japan in the total and basic number of patents.

Most importantly, the new law provides a transition from a "first to invent" to a "first to file" patent system, legal concepts that define who has the right to the grant of a patent for an invention.  In this way it will harmonize the American patent process with the rest of the world to make it more efficient and predictable, and make it easier for entrepreneurs to simultaneously market products in the United States and for exporting abroad.  Previously, the United States stood alone among nations that grant patents in giving priority for a patent to the first inventor as opposed to the first to file a patent application for a given invention. Most other countries consider the first person to file an application as the rightful inventor and “patentee,” regardless of the date of actual invention. These countries also require a patent application to be filed before you can publicly divulge the existence of the invention.

The America Invents Act also creates a post-grant review system to weed out bad patents, and helps the Patent and Trademark Office (PTO) address the backlog of patent applications. It had widespread support in both chambers of the legislature; earlier this year, the Senate passed patent reform legislation by a vote of 95-5. The House proposal passed out of the House Judiciary Committee with strong bipartisan support by a vote of 32-3.
The law also aims to reduce costly legal battles. It had become fairly standard practice for patent infringement actions to be taken against a laundry list of defendants. Any patent owner could bring together almost any group of patent infringement defendants, with little more in common than the fact that they stand commonly accused of infringing the same patent.

With limited exceptions, actions for patent infringement will have to be brought individually against parties allegedly infringing by their respective individual actions or activities.

The law will also restrict the practice of shopping for a favorable trial venue, making it much more difficult for a patent infringement lawsuit to take place in a single venue convenient only for the plaintiff. This means placing the patent dispute in a court that has a geographic connection to the case and not one that historically has been known to have patent-friendly juries. It is an unlikely coincidence that, for example, in 2006 over 230 patent lawsuits were filed in the small town of Marshall, TX, 150 miles east of Dallas near the Louisiana border. Part of the U.S. District Court for the Eastern District of Texas, more patent cases were filed in Marshall than were filed in federal district courts in Chicago, New York, San Francisco and Washington D.C. Only the United States District Court for the Central District of California in Los Angeles had more patent suits filed than in Marshall. Why? According to LegalMetric, a St. Louis-based firm providing analytical information concerning federal litigation to the legal, business and financial communities, patent holders won nearly 80% of the time in Marshall’s court.

The new law further builds on the Green Technology Pilot program that accelerates patent applications involving reduced greenhouse gas emissions and energy conservation — at no cost to the inventor. More than 2,407 petitions have been granted to green technology patent applicants since the pilot began in December 2009, and USPTO has issued a total of 470 patents under the program.

An attempt to stop global e‐waste dumping

Discarded computers, TVs, phones and other consumer electronics waste (so-called electronic waste or e-waste) now comprise the fastest growing waste stream in the U.S. All too often “recyclers” export electronic products from the U.S. to developing countries, where the toxics inside can cause great harm. Sometimes e-waste recyclers take the valuable parts from discarded electronic devices and then ship the rest overseas. In other cases chips from obsolete electronics sent to China, Vietnam, Nigeria or India become a source for counterfeiters, who make cosmetic changes then try to sell them back through the supply chain, sometimes even as “military grade” parts for the U.S. defense industry, creating potential national security problems and risk of failure.

A bi-partisan bill designed to confront the problems of illegal e-waste export was submitted in June to the US Senate and House of Representatives. The ‘Responsible Electronic Recycling Act’ (RERA, H.R. 2284) would prevent the export of non-functional or shredded electronic scrap to developing countries if the levels of hazardous substances are dangerous.

RERA applies only to hazardous waste. It does not affect clean commodities such as copper scrap, aluminum scrap, etc.  This bill allows clean electronics and their parts and materials to be traded to any country and is structured in a way to make it clear to recyclers what hazards would need to be removed from e‐waste in order to export it.  The bill doesn’t completely ban the export of toxic e‐waste, but would make it a criminal violation to export hazardous electronic waste to developing countries; instead, potentially hazardous e-waste could be exported only to “developed” countries, which are in a better position to process it responsibly, and where the reason for export is not simply passing on costs and liabilities.

RERA would prohibit the following waste equipment from transport:

• products containing hexavalent chromium
• products containing mercury or PCBs at any level
• lead, beryllium, antimony, cadmium, selenium, arsenic or thallium in concentrations greater than limits established by the EPA Administrator.
• ignitable organic solvents in batteries
• Cathode ray tubes (CRTs) each of which can house several kilos of lead as well as other toxic materials such as mercury, cadmium and arsenic.

There are three exceptions to this export ban:

• Processed broken or waste glass that is “furnace ready” and being sent to a recycling plant in a country that will legally accept it.
• Used electronics that are fully functional and tested in the US; and
• Warranty returns going back to the manufacturer

The bill would create a new category of waste under federal law called “restricted electronic waste,” which includes “covered electronic equipment” (a wide range of used consumer electronic products or parts) that contain any of the listed toxic chemicals. The bill also establishes the Rare Earth Recycling Research Initiative, to foster research into recycling rare earth materials.

This past summer residents of North and South Carolina discovered they can no longer toss their old laptops, flat-screen TVs or a host of other unwanted electronics out with the trash. The Carolinas join twenty-five states that have passed e-waste recycling legislation aimed at curbing the health and environmental hazards of discarded electronics. These laws do not ban e-waste exports, however, which are an international trade issue, and not the constitutional jurisdiction of the states. Only Congress has the authority to legislate this restriction.

H.R. 2284 is supported by environmental groups such as the Electronics TakeBack Coalition and the Natural Resources Defense Council. Companies such as Hewlett-Packard, Dell, Apple, Samsung and Best Buy--all of which already have policies that prohibit the export of e-waste to developing nations--are among those voicing support for the bill.

Share this: