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House Approves Patent System Overhaul

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

by Glenn Hess
August 5, 2011

The House of Representatives approved the first major overhaul of U.S. patent law in nearly 60 years on June 23, voting 304-117 in favor of legislation designed to make the patent approval process swifter and give the U.S. Patent & Trademark Office (PTO) the resources to reduce a huge backlog of applications.

“The America Invents Act (H.R. 1249) is the most significant jobs creation bill passed by Congress this year,” House Judiciary Committee Chairman Lamar Smith (R-Texas), the bill’s chief sponsor, said after the vote.

“No longer will American inventors be forced to protect the technologies of today with the tools of the past,” Smith added. The measure “brings our patent system into the 21st century, reducing frivolous litigation while creating a faster and more efficient process for the approval of patents.”

The American Chemical Society, which publishes C&EN, endorsed the bill, saying that streamlining the patent application process is one of the most important steps Congress can take to improve the U.S. economy.

“Congress faces many difficult choices as they grapple with the deficit and balance entitlements and cuts, but unleashing our nation’s ability to innovate from stifling patent policies has no downside — the only result is new economic opportunity,” said ACS President Nancy B. Jackson. “Currently more than 1.2 million patent applications are backlogged. That’s a lot of American ingenuity waiting to hit the streets.”

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 Administration supports the effort to update U.S. patent law, which has not been fundamentally changed by Congress since 1952, an era of manual typewriters and rotary telephones.

The House bill includes a controversial amendment that would allow congressional appropriators to maintain control of patent office funding. 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 of the revenue it generates through the fees it charges applicants.

Since 1990, PTO says, more than $800 million in fees have been diverted by Congress to other government programs. Critics say this has prevented the patent office from hiring enough examiners to review applications in a timely manner. On average, it takes three years for a patent application to be reviewed.

“And by then, someone else may have captured the business opportunity and the jobs — often someone overseas,” Jackson said. “We must end fee diversion; we can no longer afford to hold back our job creators.”

In a statement of Administration policy, the White House expressed support for passage of the House legislation, but added that “final legislative action must ensure that fee collections fully support the nation’s patent and trademark system.”



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