Today's Date: July 26, 2014 Search | Home | Contact | Services | Patent Attorney | Patent Search | Provisional Patent Application | Patent Application | Software Patent | Confidentiality Agreements

Patent Reform: House Passes America Invents Act 304-117


Written by Gene Quinn
President & Founder of IPWatchdog, Inc.
Patent Attorney, Reg. No. 44,294
Zies, Widerman & Malek
Blog | Twitter | Facebook | LinkedIn
Posted: June 23, 2011 @ 6:33 pm
Tell A Friend!


Congressman Lamar Smith (R-TX)

At approximately 5:50pm the United States House of Representatives passed H.R. 1249, which is known as the America Invents Act, by a vote of 304-117.  This bill differs from the Senate version of patent reform, S. 23, so there will be no bill going to the desk of President Obama just yet.  There are important differences between the two bills, chief among them is funding for the United States Patent and Trademark Office.  The bill passed by the Senate put an end to the practice of fee diversion, which occurs when the Congress appropriates the USPTO less than they collect in fees.  The excess in the fees collected from users of the USPTO then go to the federal government as general revenues and are used for purposes other than the operation of the United States Patent and Trademark Office.

Prior to passage in the House, Senator Tom Coburn (R-OK), who was the champion in the Senate of the provisions that would end the practice of fee diversion, issued the following press release:

“For too long tomorrow’s inventions have been stymied by today’s incompetence in government.  It is outrageous for Congress to take fees paid by Americans for a specific service and spend those dollars on other programs.  Since 1992, Congress has pilfered nearly $1 billion in user fees dedicated to the Patent and Trademark Office and spent those dollars elsewhere.  As a result, we have 700,000 patents waiting for a first review that, if approved, could help get our economy moving again,” Dr. Coburn said.

“The Senate voted to end this egregious practice by a margin of 95 to 5 when it passed legislation this March that included an amendment I offered to end fee diversion once and for all.  The House, unfortunately, decided to water down this language and allow the Appropriations Committee to control this account.  Unfortunately, the Appropriations Committee has a poor record of managing such accounts responsibly and honestly in this area and others.  For instance, the Appropriations Committee has stolen billions from the Crime Victims’ Fund and other funds,” Dr. Coburn said.  “There is no reason to believe they won’t continue to do the same with the patent account.”

Indeed, now the fight will go back to the Senate where Senators will be asked to swallow the changes adopted by the House of Representatives, which seems unlikely.  Senator Patrick Leahy (D-VT) and Congressman Lamar Smith (R-TX), who are the respective champions of the bills in the two chambers will likely want to find compromise language that can pass both the House and the Senate.  I have been told that a formal Conference on the bill is unlikely, which would mean that the Senate would need to hammer out language acceptable to the Senate while also being acceptable to the House.

Already interest groups are lining up to vow to fight on.  One particular interest group, the Innovation Alliance, continues to fight the good fight with many others on the issue of fee diversion.  Innovation Alliance Executive Director Brian Pomper released the following statement today shortly after the U.S. House of Representative’s vote on H.R. 1249, the America Invents Act:

“The Innovation Alliance is disappointed that the House of Representatives has approved legislation that will not end permanently the diversion of user fees from the U.S. Patent and Trademark Office (USPTO).

“Along with many other patent stakeholders across a range of sectors and business models, we believe that the anti-fee diversion provisions approved by an overwhelming vote of 95-5 in the U.S. Senate and a 32-3 vote in the House Judiciary Committee offer the USPTO the reliability and structure it needs to reduce today’s significant backlog of 700,000 patent applications.  Reducing the patent backlog and strengthening the USPTO is essential for driving innovation, job creation, and economic growth.

“We will continue to work with lawmakers and other stakeholders to ensure that any patent bill that becomes law ends fee diversion permanently.”

I expect there will be many more interest groups that protest the removal of provisions that would end fee diversion once and for all.

Meanwhile, David Kappos, Under Secretary of Commerce for Intellectual Property and the Director of the United States Patent and Trademark Office, issued the following statement upon passage of the America Invents Act in the House of Representatives:

I want to congratulate the House of Representatives for passing the Leahy-Smith America Invents Act today, and to again thank Judiciary Chairman Smith, Subcommittee Chairman Goodlatte and Ranking Member Watt, as well as the House Leadership, for their stewardship of this critical legislation.

The effort to reform our nation’s patent laws began a decade ago, and House passage today brings patent reform a significant step closer to becoming law. This bi-partisan legislation will transform our patent system, enhance our Nation’s competitiveness and promote economic growth and job creation.

We are encouraged by the statements of so many Members of Congress calling for the USPTO to have full access to all of its fee collections. We are particularly thankful to Chairman Rogers for his commitment to ensure that the USPTO has full access to its fees when fee collections exceed Congress’ annual appropriation for USPTO. Full funding of the USPTO is necessary for the USPTO to successfully implement this legislation and to more effectively perform its core mission.

We are hopeful that this critical legislation can move expeditiously toward final passage and enactment.

Kappos seems far more optimistic than many, perhaps being constrained by the position and negotiating position of the Obama Administration.  Most observers are not at all thankful for the role of Congressman Hal Rogers (R-KY).  See Lack of Commitment to PTO Funding.  It was Rogers who protested the end to fee diversion and inserted language instead that does not guarantee the USPTO will be able to access 100 percent of the user fees it receives.  The USPTO will still only be able to access that percentage of user fees that are given to them through appropriations Acts.  That is the way business is conducted presently; it changes nothing.  Worse, the appropriators in the House of Representatives are responsible for siphoning off nearly $1 billion over the last 20 years.  So a promise in a letter not to divert fees rings hollow given past actions and the reality that the legislation does not require an end to fee diversion.  Simply stated, a promise from Rogers means nothing if the House was not willing to put it into binding form in the form of passed legislation.

Frankly, it seems unlikely to me that the Senate would accept the removal of provisions that will end fee diversion, and I have even more difficulty believing the Senate will accept across the board prior user rights.  Of course, little has been predictable in the process of patent reform so far over the past 6 years.  In truth, the only thing predictable about patent reform efforts is that the process has been, and likely will remain, unpredictable.

- - - - - - - - - -

For information on this and related topics please see these archives:

Tags: , , , , , , , , , , , ,
Posted in: Congress, Gene Quinn, IP News, IPWatchdog.com Articles, Patent Reform, Patents, USPTO

About the Author

is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.

 

20 comments
Leave a comment »

  1. [...] Click here to read the full IPWatchdog publication. [...]

  2. Gene,

    As I said, H.R. 1249 (the so-called oxymoronic America Invents Act) is an utter sham. And I applaud Senator Tom Coburn for expressing his outrage at the complete and meaningless “watering down” of Section 22′s effort to end fee diversion. Addicts like Rogers and others can’t kick the habit of fee diversion. I frankly wish Coburn was my Senator instead of the two I currently have in Ohio, especially Sherrod Brown who is definitely anti-patent.

    I truly hope that we won’t rue this day, but I’m not optimistic at this point. My disgust over H.R. 1249, as well as S.23, is complete and thorough. This legislation is ill-considered, misguided, poorly drafted and adverse to the interests of small innovative American businesses that rely on patent rights to compete with the large multi-national corporations. And how the USPTO is going to effectively handle post-grant oppositions while fee diversion continues is unanswered.

    I’m sure those of us who represent small innovative American businesses before the USPTO will figure out a way to cope with this oxymoronic legislation. But it won’t be easy or likely inexpensive. And get ready for the “filing splurge” which is likely to occur before the effective date of those first to file provisions.

  3. Gene -

    On June 16, you touted a book, Great Again, which, its supporters claim, is a prescription to cure what ails America. I commented, cynically, that Congress is unlikely to do anything to solve our problems because, in large part, too many special interests like things just the way they are. With the passage of HR 1249, continuing the practice of fee diversion, cynicism, once again, is reality. Sincerely wish I was wrong.

  4. Tell me again the benefits of first to file that are so great that it is worth all of this?

  5. Gene,

    See our exchange below from last year. Do you now see David Boundy’s and my point that “doing nothing” was better than any so-called “patent reform” that would be passed by Congress? How does the version of “patent reform” passed by the House benefit Americans other than the executives of large corporations that want to prevent American inventors and small American companies from obtaining patents?

    AIPLA should have been against both the Senate and House bill from the start, because anyone who has been observing Congress the last few years would know that either the House or Senate would eventually eliminate anything that actually helped the USPTO or small inventors.

    Mark

    # Mark Guttag March 15th, 2010 11:09 pm

    >How would you like to see the proposed 102(b) tweaked? I am going to write something this week with suggested revised language, and some other thoughts on reform, and would like to hear your take.

    I’m with David, in the present legal environment, I would leave 102 alone except for David’s tweak. If you change 102 in any significant way, you will unleash the courts to potentially ignore all precedents related to 102. This will create uncertainty in the patent law and that is almost always a bad thing for inventors and innovation.

    Passing this reform bill is likely hurt small inventors, hurt innovation in general, and allow the real problems with the patent system to be ignored for years to come, because people will assume that “Patent Reform” fixed the problem. I am far more scared of Congress passing this bill than I am of Congress doing nothing.

    For a cautionary comparative example, I would have you consider the effects of the Public Company Accounting Reform and Investor Protection Act, better known as Sarbanes-Oxley. Based on the recent meltdown on Wall Street, I think we can pretty well conclude that this “Reform Act” didn’t do a very good job of improving public company accounting or protecting investors in any meaningful way. However, the Sarbanes-Oxley “Reform Act” did a magnificent job of destroying the IPO market in this country.

    Sorry, I have absolutely no faith in any so-called “Reform Act” passed by Congress these days.

    Mark
    # Gene Quinn March 16th, 2010 5:48 am

    Mark-

    I can understand your lack of confidence in Congress, I share that feeling. The trouble is that if they do get to a vote on patent reform there will be change and 102 will be amended. So we can either work to get it as solid as possible or we can push keeping things the way they are and get whatever crazy ambiguity they throw at us. I am going to try and suggest revisions to the proposed 102, which I feel is better than doing nothing. They want first to file in some form, which will cause more work for the PTO no doubt, but I don’t see any momentum for dropping that.

    For those whom would rather nothing I guess hoping for a protracted health care reconciliation in the Senate is the best way to keep Congress well enough away.

    I do share your view that this is a missed opportunity. They really don’t want to spur innovation or fix the patent system. They just want some minor things done differently without addressing the real issues or providing real reform.

    -Gene

  6. I just came across this blog on H.R. 1249:. If you are trying to rally support or see what others are thinking check out POPVOX.COM POPVOX is a nonpartisan, transparent, public platform for activity on bills pending before Congress, built by a former Congressional staffer, a former advocate, and the founder of GovTrack.us.
    With a link from your article to the action page for hr 1249 https://www.popvox.com/bills/us/112/hr1249 or other pending bills, your audience can get more information about the bill, find the bill’s language when it is available, see what others are saying, and share their opinion with Congress.

    We also have an easy widget, if you would like to show readers a real-time opinion tally:

    Thanks and please do not hesitate in contacting me if you have any questions!
    Best regards,
    Devin Patel
    devin@g.popvox.com

  7. Devin, nice web site, especially for its linkage to Govt.Track:
    http://www.govtrack.us/congress/bill.xpd?bill=h112-1249

    Thanks

  8. Hi Gene-
    Well at least we got patent reform *done*, which you seem to have been so desirous of seeing in the last few years or so. What a complete train wreck for independents and small businesses! I find it somewhat tragic that our Congressfolks are so clueless. Add to that an attorney that has been promulgating dramatic changes in patent law that has been well settled over the last 50 years or so. By supporting *patent reform* over the last 5 years or so, you have helped this travesty to happen. Now that it has happened, I figure I just instantly lost more than 50 percent of the value of my patents, and poor David Kappos will have to suffer with No More money to work with in the foreseeable future.

    Color me very dissappointed right about now. David and Gary Locke have been so good in such a short time, that it is somewhat tragic that Lucy is Still yanking the football away before Charlie Brown can kick it, and CB never seems to learn at all. Fortunately Gary is going to be the US ambassador to China very shortly, which he is emminently qualified for, but he will be hard to replace as th Commerce Secretary. He was my Goverenor of the great state of Washington for 8 years, and he seriously turned the economy around towards the positive in only about 3 years or so.

    I think I will start working on a new flavor this weekend, called Mecurial Memory Mango kook-aid. Usually after an especially egregious imbibement, the user will remember nothing from the day before, so might bbe somewhat *pliable*, let us say…

    Aufweidersehen alles, and welcome to harmonization with the rest of the world, in their infinite wisdom. Sour grapes I know, but they will have to answer for their very inept attempts to *fix* US patent law. They don’t seem to have had the slightest clue in the last 10 years or so, and this bill is arguably thee worst of the lot. Our only chance seems to be if several Constitutionality challenges in the next few weeks, which might make the Senate go ballistic at what the House did to Their bill. Leahy will be all over passing it, but there a few Senators that might just call their bluff.

    Stan~

    Stan~

  9. Oops-
    Sorry about the typos before. I would like to remind all that Now might be a good time to start contacting your Senators if you disagree with the HR 1249 bill, as they will have to sell it to the Senate usually in a conference, but it sounds as if they are just going to hand it off to the Senate as is and hope they buy it this time. I don’t think they will buy it, and the President will probably not sign the bill anyways unless it includes a definate end to fee diversion from the USPTO. I recently discovered that the US Postal Service is also completely paid for by their customersl. All other US agencies are subsidized by the US public.

    Stan~

  10. Just curious, in the last decade has any other self funded government agency had funds siphoned off to the extent of the USPTO? Any agency lost even $100M compared to the USPTO $1B?

    Why is the USPTO being singled out?

  11. I can’t be the only voter who finds it completely ridiculous that the House has stripped the least controversial provision from this bill (ending fee diversion) and passed the most contentious provisions. Without an end to fee diversion, “patent reform” is a waste, or worse.
    http://www.aminn.org/patent-reform-act-2011-s23

  12. Dave-
    Yes I have heard of other Federal programs being *taxed*, but not nearly to this extant. I think the real problem is that that the USPTO budget is so large, running up past 2 or 3 billion per year, that the House especially seems to think that it is Their money to spend as they see fit. I have a bulletin for them though, which appertains to their abilities to get re-elected. The House in particular has nearly destroyed my chances to succeed, and I object very strenuously to their extremely clueless *patent reform* efforts. I hope you are very happy Mr. Partrick Leahy, at the success of your efforts to destroy much of the value of US patents for your constituants in Vermont, the IBM state. Your success will probably destroy most of the possibility for small businesses to succeed, but why should you care about that? You have successfully subverted a patent system that has been the envy of the world for nearly 200 years, so an independent inventor has to wonder why you are doing so.

    The House has denied the USPTO their funding in contravention of the Senate S. 23 bill, and seem to now being insistent on them taking on a whole new task of refereeing Your new Post Grant Review duties? I would respectfully submit that you have lost what is left of your mind, and that you might want to consider retiring. Do you have any idea of how many thousands of inventions you are supressing with your precious *patent reform* efforts? Probably many thousands, just so you can report to IBM that you got various things done. How sad that a US Senator can be bought so cheaply, or perhaps expensively, to stab American inventors in the back, so to speak.

    Color me very pessimistic and jaded right about now. I am guessing that the House thinks they *fixed* the US patent system, which is very tragically wrong and the exact opposite of *fixing* anything.

    Aufwiedersehen Herr Leahy,
    Stan~

  13. Gene,
    I wonder if you happened to see this bit of loveliness: http://www.rollcall.com/issues/56_146/a_late_addition_patent_bill_worth_214_million_MDCO_WilmerHale-206838-1.html?pos=htmbtxt (h/t to Yglesias – thinkprogress.org/yglesias/issue), and what your thoughts might be on that…
    For myself, when I woke up this morning, I didn’t have any blood pressure problems, but after reading that, I think that I might now. Representative democracy in action – Woo!
    My other thought, of course, is to take this as a cautionary tale: remember folks, it’s important to stay on top of your dockets. Unless, of course, you’ve got your congressperson on speed-dial; in that case, hey, what evs, it’s cool…
    cheers,
    Ron Q. Dry, Pseudonymous Docketing Guy

  14. Devin,
    I took a look at popvox, and I don’t really see what it provides that govtrack and opencongress do not. I do, however, see what it fails to show – a list of organizations that endorse or support this bill through some forum _other_ than popvox. This seems a pretty substantial thing to miss, especially since it basically means that those organizations that don’t use popvox will not have their voices heard by popvox’s users.

    -Aaron

  15. To all,

    Here’s a link to of a private bill appended the House version of the AIA:

    http://www.rollcall.com/issues/56_146/a_late_addition_patent_bill_worth_214_million_MDCO_WilmerHale-206838-1.html?pos=htmbtxt

    “The House might have sworn off earmarks, but that didn’t stop the chamber from essentially passing one last week that would allow a single drug company to avoid generic competition while saving a powerful law firm from paying out $214 million in a malpractice suit.”

    Reading this article will make you ill to know how our Congress will prostitute and sell its soul on just about anything in pursuit of the gold. I’m one American ready to declare my independence (again) from our corrupt federal government.

  16. Ron Q Dry,

    My apologies, I didn’t realize I was stealing your thunder. And I stand by what I said in my comment.

  17. EG,
    No apologies necessary! If it gets folks talking about that amendment, you can have every last bit of thunder that I’ve ever had.
    And, I’ll not argue with your comment at all; I’ll just add my US$0.02: silly, naive fool that I am, I can remember a time when I thought that “equal justice under law” was something that we Americans aspired to, at least… Ah, youth.
    cheers,
    Ron

  18. [...] has now been several weeks since the U.S. House of Representatives passed H.R. 1249, dubbed the America Invents Act, which is commonly referred to as patent reform.  In February [...]

  19. [...] now been several weeks since the U.S. House of Representatives passed H.R. 1249, dubbed the America Invents Act, which is commonly referred to as patent [...]

  20. [...] Leader Harry Reid (D-NV) filed cloture on the motion to proceed to H.R.1249, the Patent Reform bill passed  by the House of Representatives by a vote of 304 – 117 on June 23, 2011.  By unanimous consent, the cloture vote for H.R. 1249 will occur on Tuesday, [...]