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House Approves Patent Overhaul

Intellectual Property: House and Senate bills differ over future funding of the patent office

by Glenn Hess
July 4, 2011 | A version of this story appeared in Volume 89, Issue 27

Credit: Courtesy of Lamar Smith
Credit: Courtesy of Lamar Smith

The nation’s largest chemical and pharmaceutical companies and the biotech industry are applauding passage of broad patent reform legislation by the House of Representatives, saying the measure will stimulate the struggling U.S. economy.

The legislation “will revitalize investment in new technologies and create thousands of well-paying jobs for American workers,” says the Coalition for 21st Century Patent Reform, whose members include Dow Chemical, DuPont, Pfizer, and Eli Lilly & Co.

The America Invents Act (H.R. 1249), which would be the biggest overhaul of U.S. patent law since 1952, was approved by the House, 304-117, on June 23. “No longer will American inventors be forced to protect the technologies of today with the tools of the past,” says House Judiciary Committee Chairman Lamar S. Smith (R-Texas), the bill’s chief sponsor.

The Biotechnology Industry Organization, which represents 1,100 biotech companies, says improvements made by the bill will benefit all sectors of the economy by “enhancing patent quality and the efficiency, objectivity, predictability, and transparency of the U.S. patent system.”

The Senate passed similar legislation (S. 23) in March, and differences between the two bills now must be reconciled before a final measure can be signed into law by President Barack Obama.

The House bill includes a controversial amendment that would allow Congress to maintain control of funding for the U.S. Patent & Trademark Office. That conflicts with language in the Senate bill, which would remove the patent office from the appropriations process and allow PTO to keep and spend all the revenue it generates through the fees it charges applicants.

Since 1990, Congress has diverted more than $800 million in patent fees to other government programs. Critics say this has prevented PTO from hiring enough examiners to review applications in a timely manner. More than 1.2 million patent applications are backlogged.

The American Chemical Society, which advocated for passage of H.R. 1249, stresses the importance of fully funding the patent office. “We must end fee diversion; we can no longer afford to hold back our job creators,” says ACS President Nancy B. Jackson.



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