The United States Senate voted 93 to 5 earlier this evening to end debate on patent reform, which should set up a vote on H.R. 1249 in the coming days.
The United States Senate first passed its own version of patent reform, dubbed the America Invents Act – S. 23, in February 2011. The House of Representatives took up patent reform in the Spring, ultimately passing H.R. 1249, also dubbed the America Invents Act. Because the House version of patent reform was not identical to the Senate version of patent reform the legislation pinged back to the Senate. Immediately before the Senate went out on its annual August recess Senate Majority Leader Harry Reid (D-NV) filed for cloture on H.R. 1249, scheduling the Senate’s first day back after the August recess as the day for the cloture vote. That cloture vote is what passed by a vote of 93-5.
Debate on patent reform is now over in the Senate. In the coming days the Senate will vote on and almost certainly pass H.R. 1249, sending it to the White House for the signature of President Obama. The Obama Administration has lobbied hard for this patent reform and although they are not getting everything they wanted, most notably an end to the practice of fee diversion, President Obama’s signature is guaranteed.
President Obama will sign this patent legislation as soon as it hits his desk, which could be even before his much anticipated speech on the economy on Thursday, September 8, 2011. Even if the bill is not through the Senate and signed by him expect President Obama to make reference to the patent reform bill at least in passing.
I could say that it is unclear to me why patent reform is being characterized by both parties as a jobs bill, but that would be a lie. It seems virtually certain that this particular patent reform will not create any jobs whatsoever, but President Obama, Congressional Republicans and Congressional Democrats are desperate for good news on the economy, good jobs numbers and a reduction in unemployment. In the U.S. we are a consumer driven economy and when unemployment remains high people become increasingly pessimistic, which means they lose confidence and a loss in confidence means less spending, which worsens the economic outlook. So despite the fact that patent reform will not result in any new jobs, it will be touted as a jobs bill on both sides of the isle and sold to the American people as one step toward a brighter economic future and jobs recovery.
Yesterday Professor Dennis Crouch of PatentlyO published the results of his online survey relative to patent reform, filtering out responses from those without any relevant experience in the field left 1161 responses. On particular question, which asked whether patent reform is likely to create 200,000 jobs, as is the common claim. Crouch’s survey shows pretty clearly that these claims are fairly well disputed within the industry, with 80% taking the position that patent reform will not create those jobs. See Patent Reform 2011 Survey Results.
Already, in the moments after the Senate cloture vote, the Innovation Alliance is out with a statement. The sentiment expressed by the Innovation Alliance is likely nearly universally shared by everyone within the patent community. The Patent Office is user supported with applicants paying fees for service, yet every year Congress siphons off some of those fees for wholly unrelated purposes. Fee diversion needs to stop. It is a tax on innovation.
Innovation Alliance Executive Director Brian Pomper said:
We commend the congressional sponsors of the legislation for their willingness to consider and accommodate many points of view over years of debate and discussion. We believe, however, that Congress risks missing this historic opportunity to end once and for all the diversion of fees that patent applicants pay to the U.S. Patent and Trademark Office (USPTO). Fee diversion is a tax on innovation that hinders both innovation and job creation, and ending fee diversion permanently is an issue that unites virtually all stakeholders on all sides of the patent debate. The Innovation Alliance believes there is no more important step we can take to promote the health of the innovation ecosystem in the United States. That is especially true in light of the variety of new resource-intensive responsibilities and procedures H.R. 1249 assigns to the USPTO. We remain committed to the goal of working with this Congress to end fee diversion permanently.
Had the Obama Administration been given what they asked for, which was an end to fee diversion that was originally supported in the Senate and championed by Republican Senator Tom Coburn (R-OK), patent reform well could have been characterized as a jobs bill. Due in part to the U.S. Congress using the Patent and Trademark Office as a piggy bank over the last two decades the Office has well over 1 million applications pending. Many technologies grow stale waiting for action. Inaction by the USPTO holds up companies, particularly start-up companies. They are unable to demonstrate the uniqueness of their technology to investors because the USPTO cannot even get around to considering their application in a timely manner. Such delay does cost the economy jobs — likely millions of jobs over the last two decades.
An end to fee diversion would be a jobs bill. Appropriators, you know those folks who got us into this budget mess, were the ones in the House who prevented the USPTO from being guaranteed to keep 100 cents of every user fee paid dollar. The Senate is poised to capitulate now and move on to what is next. I do hope the Innovation Alliance keeps up the pressure; I know I will. Unfortunately the reality is that the USPTO will continue to be a piggy bank for Congress, which is revolting.
Soon we will be able to start to turn our attention from “if” patent reform will happen to how to handle patent reform now that it has been enacted. The Practising Law Institute has a tentatively planned program in San Francisco, CA, which will be broadcast via the web, on September 26, 2011. I will be on the panel along with Robert Armitage, Stephen G. Kunin and Brad Pedersen. Stay tuned for more details.