patent reform

  • September 12, 2011
    Guest Post

    By Marla Grossman, Partner, American Continental Group


    Last week, the Congress passed the most comprehensive patent reform in the U.S. in over 50 years. Just hours before President Obama gave his jobs speech, the U.S. Senate passed H.R. 1249 by a vote of 89 to 9, clearing the bill for the president’s signature. The bill’s title is the Leahy-Smith America Invents Act, and it will help promote American innovation, thereby creating additional jobs in this country and, hopefully, enhance the economy. 

    Passage of the America Invents Act is the culmination of more than a decade of efforts of innovators and public policy makers. Several of the provisions implement recommendations made by the Federal Trade Commission in 2003 and the National Academy of Sciences in 2004. Congress worked on this bill from the 108th – 112th congressional sessions, holding dozens of hearings and engaging in extensive debate.

    Some of the key features of the final legislation include:

    • Transitioning to a first-inventor-to-file system, harmonizing the U.S. patent system with the rest of the world;
    • Replacing the costly interference proceedings with derivation proceedings to determine the right to a patent;
    • Updating and improving the inventor’s oath/declaration;
    • Authorizing pre-issuance submissions by third parties prior to the grant of a patent to aid patent examiners and improve patent quality;
    • Creation of a new, first-window post-grant review process to improve patent quality;
    • Improving the current inter partes system by heightening the threshold for instituting a review, making it more difficult to use the process to harass a patent owner;
    • Creation of a new supplemental examination proceeding to incentivize patent owners to commercialize their inventions despite potential flaws in the application process;
    • Making failure to disclose the best mode no longer a basis for invalidity;
    • Eliminating harassing false marking lawsuits, and addressing recent holdings that the current statute is unconstitutional; and
    • Providing for a 15 percent increase in Patent and Trademark Office (PTO) fees that will take effect 10 days after enactment of the bill so the agency can have a quick infusion of desperately needed resources.

    It is not a perfect bill. Most notably, it does not guarantee the PTO stable, future funding and does not require that the agency be able to utilize all of its user fee collections. By definition, however, a “perfect” bill is one that has no chance of ever becoming law in this country of diverse opinion and representational government.

  • June 14, 2011

    In the midst of new objections from some Republican members of Congress to a patent reform bill recently approved by the House Judiciary Committee, ACS has released a new Issue Brief on the measure at issue in the bill, “Short Term Pain for Long Term Gain: Why Congress Should Stop Diverting U.S. Patent and Trademark Office User Fees.”

    In the Issue Brief, American Continental Group, Inc. Partner Marla Page Grossman explains the importance of ending fee diversion, a practice in which funds paid by patent and trademark applicants are diverted to other programs and agencies “entirely unrelated to the [U.S. Patent and Trademark Office],” significantly slowing down the approval process and thwarting innovation.

    A provision to end fee diversion is contained in the America Invents Act, which was passed by the Senate and approved by the House Judiciary Committee with broad bipartisan support. But the provision encountered new opposition just last week, when House Appropriations Chairman Harold Rogers and House Budget Chairman Paul Ryan sent a letter to House Judiciary Chairman Lamar Smith opposing the fee diversion provision because it would hand “the Congressional power of the purse” to the Obama administration.

    In the days that followed, “[i]t was Republican leaders who fired back,” Grossman explains, with Rep. Lamar Smith responding that “contrary to putting the USPTO on auto-pilot, H.R. 1249 would actually promote accountability and transparency, creating more channels for oversight than currently exist,” and Sen. Tom Coburn asserting, “[w]e cannot have true patent reform without ending fee diversion and providing the PTO with a permanent, consistent source of funding” and that the “power of the purse does not provide Congress authority of non-taxpayer funds.”

    The Chamber of Commerce also expressed public support for the fee diversion provision this week, and more than 150 companies, schools and groups, including GE and Apple, submitted a letter reiterating the necessity of this provision.

    In her Issue Brief, Grossman explains the importance of encouraging innovation through the patent system to spur needed economic growth, demonstrates the inefficiency and unfairness that comes from diverting patent fees paid by users, and presents a number of ways in which the USPTO could maintain control of their own fees, the best of which “is incorporated in this Congress‘s patent reform bills.”

    She concludes:

    USPTO fee diversion must stop, and must be stopped now, to ensure that the USPTO can engage in the stable, long-term planning necessary for the issuance of timely, high-quality patents. The best legislative solutions will necessitate congressional appropriators prioritizing U.S. innovation, jobs and the economy over “inside the Beltway” politics. But good policies often come with painful politics. If Congress can handle a little pain in the short term, the nation will likely be rewarded with a more efficient USPTO and national prosperity over the long term.

    Read Grossman’s Issue Brief here and read a previous guest post by Grossman on this issue here.