Patent Reform Stalled in the Senate Thanks to Debt Ceiling

It 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 2011, the U.S. Senate passed S. 23, their version of patent reform.  In their infinite wisdom, or lack thereof depending upon your perspective, the House did not pass a bill that was identical to S. 23, which means that before patent reform will become a reality it needs to once again be taken up by the Senate.  But what are the odds of that happening any time soon?

Even the most casual observer likely knows that the United States is in the middle of a debt crisis.  According to Treasury Secretary Timothy Geithner we have until August 2, 2011, within which to raise the debt limit and allow for more borrowing.  Apparently the failure to raise the debt ceiling will trigger calamitous events that will cascade into an economic catastrophe.  Yes, pretty big stuff seems to be at issue over the debt limit, which is consuming all of the oxygen in the room.

According to Senator Rand Paul (R-KY), he will filibuster anything not related to the debt ceiling. “We’ve had not one minute of debate about the debt ceiling in any committee,” Paul explained in an interview on C-SPAN’s “Newsmakers” that aired on Sunday, July 3, 2011. “We haven’t had a budget in two years. We haven’t had an appropriations bill in two years. So I’m part of the freshmen group in the Senate that’s saying, ‘no more.'”  Paul promised to “filibuster until we talk about the debt ceiling, until we talk about proposals.”  He did, however, say that he would be willing to vote to raise the debt ceiling, the condition being that Congress pass a balanced budget Amendment to the United States Constitution and pass it along to the States for ratification.  As much as I like that idea, it seems terribly unrealistic in the time available and given that the leaders of neither party have embraced the plan.

Meanwhile, as debt negotiations continue behind closed doors at the White House, Senator Kent Conrad (D-ND) released his own planto reduce the deficit by $4 trillion over the next decade.  The Conrad Plan would not touch Social Security at all and would make only modest cuts to Medicare, effectively taking the two major driving forces of future debt spending off the table.  According to the Washington Times, the Conrad Plan raises taxes on the wealthy, will extend Alternative Minimum Tax relief, proposes to cut $800 billion in defense spending, would freeze pay for civilian government workers for two-years, freeze Congressional and White House budgets for three-years and further includes a 20 percent reduction in the federal vehicle fleet.  Conservatives are already calling the Conrad Plan a $2 trillion tax hike.  Regardless of whether that is true, if it is the perception of the Right then the Conrad Plan will be a non-starter and potentially only deepen the divide and mistrust in Washington.

What does this all mean?  With the continued acrimonious environment in Washington, D.C., particularly surrounding debt negotiations, little or nothing seems likely to get done in the foreseeable future.  After all, the fight over the debt ceiling has devolved into a fight over the vision of the country.  Larger government and more spending versus smaller government and less spending.  The stakes are high for the economy, the stakes are even higher for the upcoming election and the stakes are most high for the United States as a whole.  Will we take a path that makes us more like Europe, or will we start to realize that we cannot spend money we don’t have and borrowing nearly 40 cents of every dollar we spend is hopelessly unsustainable.

If Senator Paul and his fellow freshman, fiscal conservative U.S. Senators stick to the promise to block anything not related to the debt ceiling until that issue has been addressed patent reform legislation will not be coming up anytime soon.  President Obama has created a false deadline of July 22, 2011, within which to reach a deal on the debt ceiling, which is two-weeks ahead of the August 2, 2011, deadline set by Treasury Secretary Geithner.  Color me cynical, but I see no way that we have a debt deal by July 22, 2011.  For one thing there are many that seem to believe that August 2, 2011, is not a hard and fast date, so there may be some who will push the envelope in order to demonstrate that the horrible predictions of the Obama Administration were not completely correct.  For another thing, any deal worth doing isn’t done until the 11th hour, or later.  Believing that there will be a compromise reached two-weeks ahead of the Geithner drop-dead date when the philosophical and ideological divide is so great seems extraordinarily naive if you ask me.

Where does this leave patent reform?  Let’s say that the debt ceiling negotiations carry right up to August 2, 2011, or perhaps even a day or two past that Geithner drop-dead date.  That would leave only a matter of a few days before the Senate would go out for August Recess.  Will the Senate be anxious to bring up patent reform with only a few days remaining before the August Recess?  I doubt there would be much appetite for doing that.  It also means that those who want to fight patent reform would need to only slow the process for a matter of days on the tail end of debt negotiations before the August Recess.  That being the case it seems likely to me that patent reform won’t be picked up in the Senate until after Labor Day in September.

What does this mean for patent reform?  Who knows!  I personally cannot see the Senate capitulating to the demands of the House of Representatives, and Senator Tom Coburn (R-OK) has already fired a shot across the bow prior to the House voting on H.R. 1249 suggesting he plans to make a big deal about USPTO funding, which was stripped from H.R. 1249.  If the Senate does not accept H.R. 1249 and instead modifies the bill that would mean it would have to go back to the House.  We might get into a game of ping-pong because I am told there will be no Conference on this legislation.

The fight continues.  If you like patent reform you better not get too complacent.  If you don’t like patent reform or certain provisions, don’t give up.  There is likely another chapter or two to be written prior to anything being signed by the President.