Senate Approves Patent Reform Bill

The Senate on Thursday gave overwhelming approval to the most significant overhaul of the U.S. patent system in almost six decades, streamlining the review process and giving the Patent & Trademark Office the financial resources to begin reducing a backlog of nearly 700,000 unexamined patent applications.

The Senate’s 89-9 bipartisan vote sends the Leahy-Smith America Invents Act (H.R. 1249) to the White House where it is expected to be signed into law shortly by President Barack Obama, who strongly supports the measure.

“Today you passed reform that will speed up the outdated patent process, so that entrepreneurs can turn a new idea into a new business as quickly as possible,” Obama said in his speech before a joint session of Congress Thursday night. “That’s the kind of action we need,” he continued, to get the economy going.

The House of Representatives approved the same legislation in June by a vote of 304-117.

In a key change, the measure transitions the U.S. from the “first-to-invent” system to the “first-inventor-to-file” system for patent applications. That puts the U.S. in line with Japan and with its major trading partners in Europe. Supporters said the change will speed up the patent process by eliminating lengthy legal fights over who invented a technology.

But critics argued that the bill would mostly benefit large companies that have the financial resources to win the race to file an application. “This is a big corporation patent giveaway that tramples on the right of small inventors,” said Sen. Maria Cantwell (D-Wash).

The bill also gives the patent office the authority to set its own fees and have access to all of the money it collects from patent and trademark applicants rather than being limited to a fixed budget. Proponents said that should enable the office to hire more patent examiners and upgrade its aging technology systems.

However, lawmakers narrowly defeated an amendment by Sen. Tom Coburn (R-Okla.) that would have removed patent office funding from the annual appropriations process. He argued that there was no guarantee that Congress wouldn’t divert patent fees to other government programs as it has often done in the past.

Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.), the chief Senate sponsor of the bill, said that modernizing the nation’s patent system will spur innovation and help create new jobs.

“The America Invents Act will ensure that inventors large and small maintain the competitive edge that has put America at the pinnacle of global innovation,” Leahy remarked in a statement after the Senate vote. “This is historic legislation. It is good policy. And it is long overdue to be signed into law.”

David Kappos, director of the patent office, said the bill will give his agency “the tools it needs to deliver cutting-edge technologies to the marketplace sooner, drive down the backlog of patent applications, and expedite the issuance of high-quality patents—all without adding a dime to the deficit.”

A coalition of some of the country’s biggest chemical and pharmaceutical companies also welcomed the bill’s passage.

The legislation provides “a package of clearly needed improvements to our patent system that will help innovators compete in today’s global marketplace,” said the Coalition for 21st Century Patent Reform, whose members include 3M, Dow Chemical, DuPont, Eastman Chemical, Eli Lilly & Co., Pfizer, and GlaxoSmithKline.

The group said inventors and patent applicants will have a simpler, more transparent and objective path to patent protection. “At the same time, they benefit from a reduction in the time, costs, and unpredictability associated with the current system,” the coalition added.

However, the Innovation Alliance, which represents a group of high tech companies such as Qualcomm and Tessera Technologies, said it was disappointed that the legislation “does not end once and for all the diversion of patent office user fees for general federal government purposes.”