Patent Reform Act of 2007

Revises the definition of "prior art" and conditions for patentability to accommodate a first-inventor-to-file system. Reaffirms, with certain exceptions, the denial of a patent for a claimed invention, if such invention was patented, described in a printed publication, in public use, or on sale more than a one-year grace period before the effective filing date of the claimed invention.

Revises provisions for determining claims of patent derivation (i.e., deriving an invention from another inventor and filing a patent application without authorization). Directs the Patent Trial and Appeal Board (formerly the Board of Patent Appeals) to: (1) determine the question of the right to patent; (2) correct the naming of the inventor in any patent application or patent at issue; and (3) issue a final decision on the right to patent. Makes a final decision of the Patent Trial and Appeal Board the final refusal of a patent by the U.S. Patent and Trademark Office (USPTO) in a derivation proceeding. Allows parties to a derivation proceeding to terminate a proceeding by filing a written settlement statement or by referring such proceeding to arbitration.

Requires certification to Congress by the President that major patenting authorities (i.e., at least the patenting authorities in Europe and Japan) have adopted similar grace period provisions as contained in U.S. patent law before first-inventor-to file provisions set forth by this Act become effective.

Requires the Under Secretary of Commerce for Intellectual Property and the Director of the USPTO to: (1) conduct a study every seven years of the effectiveness and efficiency of the first inventor-to-file system; and (2) report to the Judiciary Committees of Congress on such study.

(Sec. 4) Revises requirements for an inventor's oath or declaration to: (1) require each individual who is the inventor or joint inventor of a claimed invention to execute an oath or declaration in connection with a patent application stating that he or she is the original inventor or joint inventor; and (2) allow a substitute statement if the original inventor is dead, legally incapacitated, or cannot be found, or is required to assign the invention and has refused to make an oath or declaration. Sets forth requirements for making substitute statements and supplemental and corrected statements.

(Sec. 5) Expands criteria for determining damages for patent infringement. Sets forth guidelines for courts in determining an award based upon a reasonable royalty relating to the economic and market value of patents attributable to their contribution over prior art. Allows increased damages for willful patent infringement.

Requires the Under Secretary of Commerce for Intellectual Property and the Director of USPTO to: (1) report by June 30, 2009, to the Judiciary Committees of Congress on the operation of prior user rights in selected industrialized countries: and (2) conduct a study every seven years and report to the Judiciary Committees on the effectiveness and efficiency of changes made by this Act for calculating inventor damages.

(Sec. 6) Revises procedures for: (1) citing prior art to USPTO for purposes of determining the patentability of a claimed invention; and (2) reexaminations of patents by the Director of USPTO.

Reassigns inter partes reexamination proceedings to administrative patent judges (currently, conducted by patent examiners). Allows patent owners or third parties to an inter partes reexamination proceeding to request an oral hearing before a patent judge.

Establishes procedures for post-grant review to cancel as unpatentable any claim of a patent on specified grounds of invalidity. Sets forth requirements for a post-grant review petition and the conduct of post-grant review proceedings, including appeals from a final determination of the Patent Trial and Appeal Board.

Repeals provisions of the Intellectual Property and Communications Omnibus Reform Act of 1999 relating to the estoppel effect on subsequent civil actions of requesting an inter partes reexamination.

Requires the Under Secretary of Commerce for Intellectual Property and the Director to issue regulations for post-grant review proceedings within one year of the enactment of this Act.

(Sec. 7) Defines "cancellation petitioner" as the real party in interest requesting cancellation of any claim of a patent and the privies of the real party in interest. Renames the Board of Patent Appeals as the Patent Trial and Appeal Board. Revises provisions relating to the Board's membership, duties, and authorities.

(Sec. 8) Directs the Under Secretary of Commerce for Intellectual Property and the Director of USPTO to study and report to the Judiciary Committees on the effectiveness and efficiency of proceedings available for the reexamination of patents.

(Sec. 9) Imposes time restrictions on the publication of certain pending patent applications.

Allows any third person to submit for consideration and inclusion in the record of a patent application, any patent, published patent application, or other publication of potential relevance to the examination of a patent application. Requires such submission to be made in writing, with a concise description of its relevance, before the earlier of: (1) the mailing of a notice of allowance in the application for a patent; or (2) the date that is six months after publication of the application or that date of the first rejection of any claim in the application, whichever is later.

(Sec. 10) Renders any tax planning method unpatentable. Defines "tax planning method" as a plan, strategy, technique, or scheme that reduces, minimizes, or defers individual tax liability.

(Sec. 11) Amends the federal judicial code to prohibit patent litigants from manufacturing venue by assignment, incorporation, or otherwise to invoke the venue of a specific federal district court. Restricts venue in patent litigation to a judicial district where: (1) the defendant has its principal place of business or is incorporated; (2) the defendant has committed a substantial portion of the acts of infringement and has a regular and established physical facility; (3) the primary plaintiff resides, if the primary plaintiff is an institution of higher education or a nonprofit organization; (4) the primary plaintiff has a place of business engaged in substantial research and development, manufacturing, or the management of such activities;(5) the plaintiff resides, if the plaintiff is named as inventor or co-inventor and there has been no transfer of rights in the patent; or (6) any defendants have substantial evidence and witnesses. Allows venue in any district for cases involving foreign defendants with no U.S. subsidiary.

Allows an appeal to the Court of Appeals for the Federal Circuit from an interlocutory order or decree determining construction of claims in a patent infringement case.

Provides for the transfer of any case commenced in a U.S. district court on or after September 7, 2007, in which venue is improper, unless substantive rulings have been made in such case or the court finds that transfer would not serve the interests of justice.

(Sec. 12) Requires the Director of USPTO to require patent applicants (except for micro-entities as defined by this Act) to submit a search report and other information and analysis relevant to patentability.

Establishes inequitable conduct (i.e., intentionally misleading or deceiving the USPTO or failing to disclose material information) as a defense to a patent infringement claim . Requires a showing of inequitable conduct by clear and convincing evidence. Provides for sanctions against attorneys involved in inequitable conduct.

(Sec. 13) Eliminates as a defense to a patent infringement claim the failure of an inventor to comply with the best mode of carrying out an invention.

(Sec. 14) Grants specific regulatory authority to USPTO over the quality and timeliness of patent applications and their examination. Requires regulations promulgated by USPTO to be reviewed and approved by Congress.

(Sec. 16) Requires the Director of the Administrative Office of the U.S. Courts, in consultation with the Federal Judicial Center, to study and report to the Judiciary Committees on the use of special masters in patent litigation.

(Sec. 17) Directs the Comptroller General, within two years after the enactment of this Act, to conduct a study of workplace conditions for the examiner corps of USPTO and to submit the results of such study, with any other recommendations relating to patent reexamination proceedings, to the Judiciary Committees.

(Sec. 18) Reaffirms congressional intent to promote joint research activities as previously expressed, including in the legislative history, by the enactment of the Cooperative Research and Technology Enhancement Act (CREATE Act). Directs USPTO to administer the joint research provisions of this Act in a manner consistent with the legislative history of the CREATE Act.

(Sec. 19) Directs the Under Secretary of Commerce for Intellectual Property and the Director of USPTO to study and report to Congress on patent damage awards based on a reasonable royalty standard.

(Sec. 20) Provides for severability of provisions of this Act held to be invalid or unenforceable.