With House passage of the Leahy-Smith America Invents Act (H.R. 1249), reform of U.S. patent law moved closer to enactment. Because the proposed legislation, approved in the U.S. House of Representatives on June 23, 2011, by a 304-117 vote, differs in some respects from the Senate’s reform measure, the bills must be reconciled before the reforms become law. U.S. Patent & Trademark Office (USPTO) Director David Kappos applauded the House vote, claiming that the bipartisan legislative effort “will transform our patent system, enhance our Nation’s competitiveness and promote economic growth and job creation.”
Like the Senate version, the House bill would adopt a “first-to-file” rule that will align U.S. law with that of other countries, changing how this country grants patents, which are currently awarded to the “first to invent.” Other reform provisions would establish a new process for reviewing patents after they are issued and allow third parties to provide information on other parties’ patent applications. The legislation would also give inventors a grace period following public disclosure of their inventions to file for patents. Both bills would slow down the “false patent marking suits” that have created a new litigation industry by allowing only the U.S. government to file suits to recover the statutory penalty. Competitors injured by false marking could sue for damages equal to the competitive injury. Neither final bill includes provisions that would have restricted patent infringement damages.
A compromise that allowed the House bill to move to a vote will allow USPTO fees, collected in excess of its annually appropriated budget, to be held in a reserve fund for the office’s sole use. The House will, however, be required to separately authorize USPTO’s use of any part of the fund. This provision may undergo revision during the reconciliation process; according to the White House Office of Management and Budget, the provision does not ensure access to the reserve fund, and “[t]he administration looks forward to working with Congress to provide additional direction” that will provide “timely access to all of the fees collected.” The compromise resolved concerns that allowing USPTO to be self-funding would prevent effective appropriations oversight. According to a news source, the American Intellectual Property Law Association, which supports the House and Senate bills, has expressed reservations about the fee compromise.
Other concerns raised during House deliberations included a potential conflict with the Genetic Nondiscrimination Act. According to Representative Louise Slaughter (D-N.Y.), the Act’s sponsor, a manager’s amendment to the patent reform bill could allow human genes to be patented, which would jeopardize the Act. In this regard, she reportedly said, “If I didn’t already have enough complaints against this manager’s amendment, I want to call attention to the House that after 13 years of work, we finally got genetic nondiscrimination passed in this Congress so that people could feel free to have genetic tests. This manager’s amendment for the first time talks about the patenting of human genes. That must never, ever happen.”
Some patent law practitioners and scholars oppose the proposed reforms, primarily because they would “undeniably expand the size of the federal bureaucracy and increase the cost and complexity of the American patent system.” George Washington University Law School Research Professor John Duffy recently explained his opposition to the “big government reform bill” by describing the new administrative proceedings that have been added to existing procedures.
Those proceedings, if finally approved, would add to existing “patent examination,” “interference,” “reissue and correction,” “ex parte reexamination,” and “inter partes reexamination,” three procedures that Duffy designates as “post-grant review,” “supplemental examination” and “a special ‘transitional post-grant review proceeding for review of the validity of covered businessmethod patents.’” According to Duffy, “Even the last three decades—which, in terms of historical precedent, have seen extraordinary inflation in bureaucratic processes at the Patent Office—are outdone by this single bill.” See The New York Times, June 21, 2011; The Hill, June 22, 2011; USPTO Press Release, June 23, 2011; The Wall Street Journal and The National Law Journal, June 24, 2011.