UPDATED: March 9, 2011 @ 2:35pm

By a vote of 95 to 5, the Senate last night passed comprehensive patent reform legislation. S.23, “The America Invents Act”. But the path forward for passage of the measure in the House of Representatives remains unclear.

The bill – which was introduced by the Senate Judiciary Committee’s Chairman, Sen. Patrick Leahy (D-VT), Sen. Orrin Hatch (R-Utah), and the Committee’s Ranking Republican, Sen. Charles E. Grassley (R-IA) – moved quickly through the Judiciary Committee, with a Committee vote of 15-0.  Catching some critics off-guard, S.23’s advocates were able to take advantage of the light Senate floor schedule that often exists early in a new Congress and to capture the attention of Majority Leader Harry Reid (D-NV).   Specifically, S.23’s bipartisan posture, fueled by an Administration eager to advance innovation and job creation policy initiatives, made the bill an attractive floor measure for Senate Leadership, who was otherwise consumed by a heated, partisan battle over federal government funding.

Louis Foreman

Yesterday from the floor of the Senate, while debating whether the Senate should pass patent reform bill S. 23, Senator Amy Klobuchar (D-MN) cited a letter from Louis Foreman in support of patent reform, which was entered into the record without objection.  The name Louis Foreman is well known to those in the inventor community.  Foreman is the publisher of Inventors Digest, the Executive Producer of Everyday Edisons, an inventor himself and a serial entrepreneur.

Foreman, who supports patent reform efforts generally and S. 23 specifically, started his first business as a sophomore in college twenty years ago.  He has successfully started 8 business in that twenty year period and has been an integral part of twenty additional ventures.  Foreman has ten U.S. patents and his firm, enventys, has helped develop and file for another 400 patents.  This experience easily has shown Foreman, in his own words, that “the USPTO is hampered by a system that is in dire need of reform.”

Beginning at about 12:30pm Eastern Time today the United States Senate closed debate on the amendment offered by Senator Diane Feinstein (D-CA) relating to the removal of first-to-file provisions from the patent reform bill S. 23.

The Senate Roll was called and a vote taken on whether to table the Feinstein Amendment.  The votes were 87 in favor and 13 against, thereby killing the Feinstein Amendment and keeping the first-to-file provisions within S. 23.

Late yesterday afternoon it came to my attention that an article I recently wrote was referenced by Senator Jon Kyl (R-AZ) on the floor of the United States Senate. The article is titled Senate to Vote on Patent Reform, First to File Fight Looms and addresses the potential change from a first to invent system (which we have currently) to a first to file system (as proposed by S. 23). Needless to say, I was flattered by the attention given to this article by Senator Kyl.

As flattering as it was to be inserted into the patent reform debate in some peripheral way, the real news from yesterday was the Manager’s Amendment was passed by a vote of 97-2.  The Manager’s Amendment, cosponsored by Senator Patrick Leahy, Senator Charles Grassley (R-IA) and Senator Kyl, included language that would allow the United States Patent and Trademark Office to keep the fees it collects.  The Manager’s Amendment reportedly also included insertions favored by Congressman Lamar Smith (R-TX), who is chair of the House Judiciary Committee.   See Momentum build for patent bill.  Thus, it seems quite likely that patent reform will soon become a reality.

Earlier today I wrote about the FOX News piece on patent reform last night on the 6pm news show Special Report.  What was shown during Special Report seems to have been a condensed version of a longer (4:27) piece from earlier in the day.  While I’m sure everyone will find something to disagree with and argue about, it does strike me as pretty fair treatment of the issues and arguments of the parties for and against patent reform.

Last night patent reform was big enough news to make the FOX News 6pm news hour, but frankly there wasn’t much “news” to report from activities in the Senate yesterday.  Senator Leahy initiated discussion on S. 23, the Senate version of patent reform, and a brief discussion ensued.  More is expected today on patent reform in the Senate. 

It appears as if the time has finally arrived for an up or down vote on patent reform in the United States Senate.  It has been widely reported that the full Senate will take up patent reform upon returning from recess this week, and it is now believed by many on the inside that the Senate will take up patent reform on Monday, February 28, 2011, the first day back.  Some are even anticipating that the Senate will vote on patent reform bill S. 23 late in the day on Monday, February 28, 2011.  See Crunch Time: Call Your Senators on Patent Reform.  That would seem exceptionally quick, particularly given the rancorous issues and Amendments still to be presented, but nothing will surprise me.

As we get closer to a vote in the Senate the rhetoric of those for and against patent reform is heating up to a fever pitch.  The big fight, once again, is over first to file, with battle lines drawn that run extremely deep.  Senator Diane Feinstein (D-CA) is expected to file an Amendment stripping the first to file provisions, which could be supported by Senate Majority Leader Harry Reid (D-NV).

EDITORIAL NOTE: What follows is a letter to Congress from Gary K. Michelson, MD, published here with permission.

President and inventor, Abraham Lincoln

As Abraham Lincoln said “The Patent system added the fuel of interest to the fire of genius”.

Many inventions allow a worker to be more productive.  That is to provide more service or more product with no increase in the work performed.  For example in the era of the building of the great canals in America steam shovels appeared such that one man and such a machine (an invention) could displace 100 men with shovels.  Similarly a large room full of typists with typewriters were replaced by a single person with a word processor (an invention) who was then capable of turning out an unlimited supply of originals.

It’s crunch time.  The Patent Reform Act of 2011 is scheduled for an up-or-down vote on the Senate floor this Monday, Feb. 28.  It’s time for all intellectual property professionals to look carefully at the Patent Reform Act, and decide: is this bill good for American innovation or bad?

I am convinced that it is bad.

This bill (and its predecessors) has been extensively lobbied.  A handful of large, multinational companies have lobbied vigorously for it.  A handful of other large entities have lobbied vigorously against it.  Yet consistently, small businesses, start-ups, entrepreneurs, and independent inventors – the present and future job creators in the U.S. – have said that this bill will hurt them today and it will hurt U.S. competitiveness tomorrow.

Live from New York it’s the 5th Annual PLI Patent Law Institute.  Okay, it doesn’t roll off the tongue quite the same way, but over the next two days we will explore all aspects of the practice of patent law, from litigation, to transactional practice to patent prosecution.

Starting off day one is the newly minted private citizen Sharon Barner, who most recently was the Deputy Director of the United States Patent and Trademark Office.  Barner was introduced by John White (of PLI patent bar review fame), who pointed out that during her tenure she continued to commute weekends back to Chicago from Alexandria, VA so as to not uproot her family.  Over her tenure, which was about 16 months, Barner also managed to fit in no less than 8 trips to China on official government business, among the 17 foreign missions she participated in.  Let’s just say she really racked up some frequent flyer miles!

Today Barner is here to talk to us about what is going on at the USPTO.  She is discussing the USPTO Strategic Plan, which she was primarily responsible for pulling together during her tenure.  She also went on to discuss appeals to the BPAI, the IT system overhaul, patent reform, patent politics, Microsoft v. i4i and much more.  As a former Deputy Director we are getting not only the facts, but her opinions as well.  An excellent, informative and candid presentation.

Earlier today Chief Judge Paul Michel (ret.) of the United States Court of Appeals for the Federal Circuit testified before the Subcommittee on Intellectual Property, Competition and the Internet, a subcommittee of the House Committee on the Judiciary.  The House IP Committee held the hearing titled “Crossing the Finish Line on Patent Reform: What Can and Should be Done?”

Substantively, Chief Judge Michel also explained that “[t]he PTO desperately and immediately needs:  several thousand additional examiners, dozens of additional board of appeals members, and major modernization of its IT systems, which are antiquated, inadequate and unreliable.” The funds for additional hiring and improved IT systems would come from the Patent Office being allowed to set its user fees and keep the fees it collects.  Greater resources are necessary, Chief Judge Michel explained, because of the extraordinary increase in the size and complexity of patent applications over the last two decades, which makes the 20 hours on average provided to patent examiners wholly inadequate.

It is admittedly hard to get worked up about the prospects of patent reform given that over the last 5 to 6 years we have be variously told that it was only a matter of time, a done deal, imminent and/or guaranteed.  Of course, patent reform hasn’t happened; legislative efforts have simply been unable to cross the finish line.

Notwithstanding, Congress is at it once again, with the Senate Judiciary Committee reporting out a bill last week that remarkably resembles the bill that has been unable to gain any traction in the Senate for the last several years.  That would suggest that the same fate is in store for this legislation.  Not so fast!  I have a suspicion that this year things are different and that we really could be on the cusp of patent reform.  Whether that is for better or for worse will largely be in the eye of the beholder, but what is emerging feels different and I think we are closer to change, and perhaps an end to fee diversion, than we have been at any point over the last 6 years.

Senator Tom Coburn (R-OK)

Earlier today the current version of patent reform legislation in the United States Senate, S. 23 titled “Patent Reform Act of 2011,” was marked up in the Senate Judiciary Committee.  The amendments offered by the Senators seemed relatively minor for the most part, with one notable exception.  Senator Tom Coburn (R-OK) presented an amendment to the bill that would once and for all put an end to fee diversion and allow the United States Patent and Trademark Office to access its fees.

The Coburn Amendment would create a specialized fund within the Department of Treasury known as the “United States Patent and Trademark Office Public Enterprise Fund.”  The PTO Director would have access to monies in the Fund for expenses ordinarily and reasonably necessary for running the Office.  Perhaps most importantly, the Fund could grow so monies in the Fund could be accessed by the Director without fiscal year limitation.  This could allow the Fund to grow in certain years to a critical mass that may be needed for capital expenditures. This is a brilliant idea and one that the industry needs to get behind wholeheartedly.

Earlier today the United States Patent and Trademark Office announced more details relating to the “Three-Track” program, which was first published for public comment in June 2010.  See USPTO Announces New Examination Rules).  The Three-Track initiative is designed to enable applicants to choose the speed with which their patent application is processed. On Friday, February 4, 2011, the USPTO will publish in the Federal Register a notice of proposed rulemaking on “Track One” of the program, which will give applicants the opportunity for prioritized examination of a patent within 12 months of its filing date for a proposed fee of $4,000.

Sadly, because the Patent Office does not have fee setting authority there will be no reduction in fees available to small entities who otherwise normally pay 50% of most Patent Office fees. Because the Congress controls which fees qualify for small entity preference everyone will need to pay $4,000 to accelerate under Track One. Perhaps this will get Congress to stand up and take notice of the patent system they have so long neglected. I can only imagine the outcry from independent inventors and the small business community. If you are offended by the high fee just be sure to direct your ire where it is deserved; namely in the direction of Congress.

The 111th Congress once again left patent reform efforts on the table without any resolution or even a vote. That might be just as well given that in the minds of most the patent reform efforts were not truly “reform,” but rather were merely changes that would not have made for a stronger Patent Office or otherwise addressed some of the pressing issues that require Congressional attention.

At some point during 2011, however, I suspect that Congress will become engaged and interested as innovators find themselves on the short end of the Supreme Court sick in the Microsoft v. i4i case. We all know that the Supreme Court only takes patent cases to overrule or at least modify the law of the Federal Circuit. That only makes sense since there is but one Circuit responsible for patent law, thus no splits among the Circuits to resolve. So in taking the Microsoft-i4i case that asks whether there should be as broad a presumption of validity as required under the well-established law of the Federal Circuit, it doesn’t take a rocket scientist to figure out that the presumption of validity will be eroded by the Supreme Court, perhaps in this term. That being the case, it is at least plausible that Congress could be persuaded to become involved, perhaps even undertaking sensible reforms that protect innovators.  Yes, I realize how naive that sounds, but please keep reading!