It looks like my prediction on Tuesday that the Senate would pass H.R. 1249, the America Invents Act, prior to President Obama’s much anticipated jobs and economy speech that begins at 7:00pm ET today, Thursday, September 8, 2011. The Senate voted to pass H.R. 1249 and send the House version of the America Invents Act to the White House for President Obama’s signature by a vote of 89 to 9. The Coburn Amendment, which would have once and for all put an end to fee diversion, was unsuccessful, being tabled by a vote of 50 to 48.
Beginning at 4:00pm ET the Senate started considering three separate amendments to H.R. 1249. The passage of any would have required the legislation to ping back to the House of Representatives, but that was not to happen.
The first amendment considered was offered by Senator Sessions. The Sessions Amendment would have removed section 37 of the American Invents Act relating to the calculation of the 60-day period for applying for certain patent term extensions. At 4:10pm the roll call was run through for the first time with only 9 Senators having voted. Over the next 22 minutes 89 other Senators would make their way to the Senate floor to cast their votes. At 4:32pm the vote was announced; the Senate voted 51 to 47 to defeat the Sessions Amendment.
Immediately after the defeat of the Sessions Amendment attention turned to the Cantwell Amendment, which would return section 18, the special procedure for challenging business method patents, to the more limited language of the Senate bill. Senator Cantwell spoke in favor the amendment and pointed out that the language of Amendment was agreed to by 95 Senators when they passed S. 23 in February 2011.
Senator Schumer took to the podium in opposition to the Cantwell Amendment, no doubt to assist his big-bank constituents who are not particularly fond of business method patents. While everyone deserves to have a viewpoint, I found Senator Schumer’s articulation of the patent laws disturbingly naive. Indeed, Schumer demonstrated a rather acute lack of understanding of the patent system and the Patent Office.
According to Senator Schumer the House language is required because the Patent Office is doing a terrible job with business method patents, handing them out to anyone and everyone. He even said that several years after something has been done an individual can race to the Patent Office and obtain a patent on the business method. He railed against the Eastern District of Texas and patent litigation plaintiffs more generally. One has to wonder exactly how much experience with the USPTO Senator Schumer has. It is certainly not easy to get a business method patented, and it was the infamous “second pair of eyes” review of business method patents (ultimately extended to all patents under the Dudas Administration) that made it difficult to get any patents issued and virtually impossible to get business method patents issues. In the wake of the Federal Circuit and then Supreme Court decision in Bilski v. Kappos getting disembodied business methods patented is impossible. Business methods remain patentable but require great discussion of the technology implementing the method. Simply stated, Schumer’s critque of business method patents was ill-informed. Notwithstanding, at 4:54pm ET it was announced that the Senate voted 85 to 13 to defeate the Cantwell Amendment.
The final Amendment to be considered was the Coburn Amendment, which would reinstate in section 22 the revolving fund language that would remove the USPTO from the Congressional appropriations process and end fee diversion. Speaking in support of his Amendment Senator Coburn explained:
If you pate into the Patent and Trademark Office to have a patent evaluated that money ought to be spent on the process. We have not stolen almost $900 million from the Patent Office, we have almost 1 million patents in arrears, we have fantastic leadership in the Patent Office and we won’t send them the money to do their job. It is unconscionable that we won’t do this.
Rebutting Senator Coburn was Senator Leahy, who ultimately moved to table the Coburn Amendment because he said the Coburn Amendment would kill the bill and this patent reform bill will help the economy. Exactly how this bill will help the economy beyond it being some kind of nebulous “jobs bill” remained unexplained, likely because in no intellectually honest way is the America Invents Act a jobs bill. Senator Leahy also severely mischaracterized the House bill, either getting the facts completely wrong or intentionally misleading those watching and his fellow Senators. Leahy said the USPTO would get the funds, so killing patent reform “over a mere formality” was not justified. Of course, the USPTO will not get the funds paid by user fees unless Congressional Appropriators give them the funds. So we are at the exact same spot we have been over the past two decades under the America Invents Act relative to USPTO funding. Expect Congressional siphoning of USPTO funds to continue.
In response to Senator Leahy, Senator Coburn said his Amendment “will guarantee the Patent Office has funds it needs to have… This bill will not be killed because we are going to make sure the money for patents goes to the Patent Office.”
Unfortunately, the vote to table the Coburn Amendment was successful. The Senate voted 50 to 48 to table the Coburn Amendment, which means funding for the U.S. Patent and Trademark Office continues to be at the pleasure (and whim) of Congressional Appropriators who have routinely shown that they prefer to treat the USPTO as a piggy bank.
Shortly after the tabling of the Coburn Amendment the full Senate voted 89 to 9 to pass H.R. 1249. The House version of the America Invents Act will become the law upon signature of President Obama.
PROGRAM NOTE: The Practising Law Institute has planned a Patent Reform 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.