Today's Date: October 31, 2014 Search | Home | Contact | Services | Patent Attorney | Patent Search | Provisional Patent Application | Patent Application | Software Patent | Confidentiality Agreements

Senate Votes 89-9 to Pass Patent Reform, No End to Fee Diversion


Written by Gene Quinn
President & Founder of IPWatchdog, Inc.
Patent Attorney, Reg. No. 44,294
Zies, Widerman & Malek
Blog | Twitter | Facebook | LinkedIn
Posted: September 8, 2011 @ 6:00 pm
Tell A Friend!



The Ramifications of a Political Patent System
Join Gene Quinn, Judge Michel & Richard Baker for a discussion about the politics of patents
CLICK HERE to REGISTER. Thurs, Nov. 13, 2014, 12pm ET ~ Sponsored by Innography


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.

- - - - - - - - - -

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

Tags: , , , , , , , , , , ,
Posted in: America Invents Act, 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.

 

35 comments
Leave a comment »

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

  2. If doing the right thing (the Coburn amendment) is the WRONG thing “because he said the Coburn Amendment would kill the bill,” then I suggest that the WRONG thing is the bill.

    There is shame across this nation tonight.

  3. Shameful . . . Unconscionable . . .

    Predictable.

  4. Gene,

    Why did you ever believe that this bill was good for inventors and our economy? The first-to file provisions were tailor made to help our foreign competitors. The only trojan horse was ending fee diversion, but this clearly was never the real goal of this bill. This law has always been pushed by large multinational corporations that did not have the best interests of our nation at heart. The damage caused by this law will take decades to undue and our kids’ and grandkids’ standard of living will be significantly diminished.

  5. To all:

    Well, the Gong of Doom has sounded for the last time for the AIA. But at least give three cheers to Senator Tom Coburn for having the integrity to challenge a bad deal on fee diversion!

  6. “The Senate voted 50 to 48 to table the Coburn Amendment”

    Does this mean that this Amendment can still be voted on at a later point in time?

    Without an end to fee diversion, the Act is not really going to change very much. To demonstrate that we have a problem, I just received a first action from the United Kingdom IPO on a UK application national stage that was filed only six months ago. It will probably take three years before the counterpart U.S. action comes out.

  7. For small inventors – trade secrets, or filing away from USPTO (e.g. PCT, Canada, Europe, etc…) are attractive alternatives.

  8. Gene, can you please post a link of the roll call for the Coburn amendment. I would like to see how my two NJ Senators voted on this one. Thanks.

  9. As he rounds the bend, the upper torso of the Statue of Liberty reveals herself to Charlton Heston. He falls to the ground in dismay. “You stooped-id homo sapiens, you finally did it, didn’t you? You had to push that button! I was home all along and didn’t know it”. Ending scene in “Planet of the Apes” (the original one)

    That’s the way it feels as our wise Senators from the back woods pushed the yes button today on Patent Deform.

    September 7th 2011, a day and the following which will live in infamy.

  10. There are a lot of things wrong with this bill, but I’m not convinced that “first-to-file” is one of them. One way to evaluate a change is to mentally reverse the roles of old and new. If the current law was first-to-file, would we now be hailing first-to-invent as a great breakthrough? Or would we be scratching our heads at the byzantine provisions of USC 102 if they had just been passed as opposed to being in existence since 1952?

  11. As an alternative to the Coburn Amendment, we should at least demand the same “truth in labelling” required of a candy bar wrapper: Have the USPSTO Fee Schedule show each fee broken down into its “Patent Office Logistics And Administration” component and its “Being Diverted Directly To Congress / Probably Going To Be Wasted” component.

  12. 12 ‘‘§ 103. Conditions for patentability; non-obvious subject matter
    14 ‘‘A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not
    16 identically disclosed as set forth in section 102, if the differences
    between the claimed invention and the prior art
    18 are such that the claimed invention as a whole would have
    19 been obvious before the effective filing date of the claimed invention
    to a person having ordinary skill in the art to
    21 which the claimed invention pertains.
    Patentability shall not be negated by the manner in which the invention was
    23 made.’’.

    This is the new law.
    But what the @#$#@! do all those strange phrases actually mean and why?

  13. ‘‘§ 103. Conditions for patentability; non-obvious subject matter
    ‘‘A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not
    identically disclosed as set forth in section 102, if the differences
    between the claimed invention and the prior art
    are such that the claimed invention as a whole would have
    been obvious before the effective filing date of the claimed invention
    to a person having ordinary skill in the art to
    which the claimed invention pertains.
    Patentability shall not be negated by the manner in which the invention was made.’’.

    This is the new law.
    But what the @#$#@! do all those strange (highlighted) phrases actually mean and why?

  14. [...] the newly reformed laws under the AI Act, the legal ownership of a patent is conferred on the entity that’s the first [...]

  15. To all:

    OK, I realize the AIA is an utter “sham” (and have said as much), but we’ve now got to realize that the AIA is now “water under the bridge/over the dam.” It’s now time to figure out how to combat this monstronsity. In that regard, consider my prior post on IPWatchdog: http://ipwatchdog.com/2011/07/07/american-davids-of-innovation-start-your-engines-strategies-for-coping-with-first-to-file-under-the-america-invents-act/id=18008/ . I have no intention of letting the “Goliaths” (aka, the Coaltiion for Patent Fairness, such as Microsoft, Intel, Cisco, etc.) profit from this legislative nonsense without a fight (one that will be “tooth and nail” possibly).

  16. PTO Director David Kappos said:

    “effectively expedite application processing, drive down the backlog of unexamined patent applications, and issue higher-quality patents that are less likely to be subject to a court challenge—all without adding a dime to the deficit”

    How will USPTO be able to simultaneously cut down the backlog AND issuer higher quality? Unclear what Kappos has in mind here – unless there is a new tool in AIA that Examiners may use to more quickly reject patents.

    Secondly, if the first-to-file change does result in the anticipated sudden (even if only temporary) surge in patent applications – then even if there is a tool to reduce the backlog, we will soon suffer from another backlog.

  17. Stepback,

    Very interesting. Our we to compare our invention to a claimed invention instead of the specification? If so does this result in a narrower interpretation or broader interpretation of nonobviousness? Under Novelty, do we compare against the claims or the specification? If the specification, do we suddenly switch to the claims for obviousness?

  18. Stepback,

    Ignore my previous comment. Not at all sure what that means or how it will change things

  19. EG:

    Please see above posting number 12.

    This is the new and improved section 103 that will be the bread and butter of all patent prosecutors (and litigators) some 18 months from now.

    I highlighted some important phrases.
    Not because I want to show off AIA for the corrupt thing that it is, but because I would also appreciate the thoughts of others as to what these specific terms mean.

    What is the definition of “a claimed invention“?
    Don’t be cute and assume you know. Go to the definitions sections of the AIA and then come back with a fact based analysis.

    What is the definition of “the effective filing date” of the claimed invention?
    Again, don’t be cute. Look up the definitions section. Can you make heads you lose/ tails I win sense out of the definitions section?

    What is the definition of “the art” to which the claimed invention pertains and what is the definition of “the prior art” against which the whole of the “claimed invention” needs to be compared?

    The first jobs-creation aspect of AIA is probably a whole bunch of PLI courses trying to interpret what the heck all this means.

  20. Regarding the rewritten section 103. I don’t see a problem with the new language (aside from becoming nauseous over first the file which is embodied in the phrase “The effective filing date”). The prior language said “the invention”, the new language substitutes the phrase “the claimed invention”. That isn’t a change, it just puts in what is the law anyway because we use the claims to define the “invention” in applying section 103. There’s some grammatical rearrangement, but I don’t see a problem in that regard.

  21. 102 is where the wholesale change is to the novelty criteria. 103 is the obviousness criteria.

  22. There was so much to gain from the Coburn Amendment.

    I am sadden that the decision makers have again failed to do what is better for the country and instead done what was best for them individually. The fact that the vote was so close makes it worse for me.

  23. P.delima-

    BRILLIANT! I love it!

    -Gene

  24. Brinskella,

    This observation, while extremely valid, was made long ago.

    The fact that Kappos mouths it again is a supreme discredit to him.

  25. Maybe it’s the new fast track with its significantly higher fee that Kappos thinks will reduce the backlog and bring in more funds. That plan had to be postponed due to the budget fight earlier this year. He may also be hoping that fee diversion will be at least reduced if not eliminated.

  26. [...] the newly reformed laws under the AI Act, the legal ownership of a patent is conferred on the entity that’s the first [...]

  27. [...] the newly reformed laws under the AI Act, the legal ownership of a patent is conferred on the entity that’s the first [...]

  28. “The fact that Kappos mouths it again is a supreme discredit to him.”

    Just following the lead of the boss …. cannot blame him for that. I don’t think he is in such a hurry to get back to non-public service so as to publicly disagree with the prez.

  29. Just visiting,

    I will disagree with the message (not with you saying it, nor the truth of what you say).

    Being a “good soldier” is not what is required for the pivotal leadership role as head of the Patent Office. It should be the other way around as the head of the Patent Office is supposed to be telling the president what is best.

    This is an abdication of leadership.

  30. “It should be the other way around as the head of the Patent Office is supposed to be telling the president what is best.”

    Actually, Kappos should be saying it (in private) to the Commerce Secretary who should be passing it to the President.

    First rule of keeping your job — make your boss look good. It isn’t a rule that anybody wants to publicize, but following that rule will rarely fail you.

    Also, in such a politically charged environment, being able to stay on message is important. If Kappos came out against the bill, the talk wouldn’t be about whether Kappos was right or wrong, the talk would be about how the Prez cannot keep control of his own appointments.

    I’m sure Kappos didn’t make VP at IBM because he ruffled a lot of feathers.

    Just sayn’ …..

  31. Thanks just visiting,

    Somehow my view of Leadership surpasses the mindset of “First rule of keeping your job.” I guess that I expect more from my leaders.

    As far as ‘staying on message,” somebody better be able to tell the Emporer that he is not actually wearing any clothes. I would hope the dignity of telling right from wrong outweighs the urge to “keep control of his own appointments.”

  32. SB,

    Thanks but no thanks, I’m not taking the “bait.” I wouldn’t touch your post 19 with a hundred foot pole for the very reasons you suggest: the nonsensical, idiotic language in the AIA. As Ron Katznelson has suggested, these “language landmines” were most likely planted there deliberately by the proponents of this malarkey (e.g., Microsoft, Intel, Cisco, and the rest of the Coalition of Patent Fairness ilk) to “blow up” at the appropriate time on some poor, unsuspecting patent owner in litigation.

  33. “I expect more from my leaders.”

    In the context of him expressing an opinion on legislation … he is a follower, not a leader. What people are, in essence, asking Kappos to do is kiss his job goodbye. There is a way to express disagreement with the legislation, but doing it publicly is NOT the way if you are a political appointee. The way to express disagreement is through private channels.

    “I would hope the dignity of telling right from wrong …”
    Dignity doesn’t pay the bills ….

  34. Just visiting,

    As to “In the context of him expressing an opinion on legislation … he is a follower, not a leader.

    We will have to agree to disagree. Look at the desginated roles that define Kappos’ job. You have abdicated one of them.

    Don’t be a whore to the job if that job costs you your soul. Kappos job is to be a Leader – and in this area particularly. If he cannot do so – or will not do so for fear of losing his job, then he should lose his job for that reason.

  35. Senator Maria Cantwell may have said it best: “This is not a patent reform bill. This is a big corporation patent give away that tramples on the rights of small inventors.”
    http://www.aminn.org/