Patent Reform Appearing More Likely: Senate Passes Key Procedural Test Vote – House Bill Soon to Follow?

March 8th, 2011

Highlights: The Patent Reform Bill of 2011 (a/k/a the “America Invents Act”) appears increasingly likely to pass the Senate and move to the House. On March 7, 2011, the U.S. Senate voted 87-3 for “cloture,” which limits debate on the Senate Bill 23 (S.23). This clears the way for a full Senate vote as early as Wednesday, March 9, 2011.

If passed by the Senate, patent system reform will make its way to the U.S. House of Representatives, which is expected to pass a similar bill.

News details can be found here.

Key details from the Senate bill that is likely to pass include the following:

  • The current system that awards patents to the “first to invent” will be replaced by a “first inventor to file” system. This is very controversial – experts differ on which patent system stakeholders will benefit from this change. It is not perceived by many to be beneficial to small businesses and individuals.
  • Fee diversion will be eliminated – the USPTO should be able to keep most if not all of the user fees it collects. This is a good development. Additional funds will allow hiring of more examiner and improving the IT infrastructure, all of which are needed to reduce the down on the backlog of pending applications (believed to be in the realm of 500,000).
  • The bill has new and expanded procedures for challenging patents in the examination stage, and in the post-grant, inter partes, and supplemental review processes. This will likely weaken patents, since more mechanisms for challenge typically lead to more challenges, period – whether or not the challenges are well founded.
  • Tax strategy schemes would be barred from patenting.
  • Business method patents would be subject to additional review and scrutiny.
  • The USPTO would establish a number of satellite offices around the country.
  • A new “small business ombudsman” would provide another voice for small businesses at the USPTO.
  • Certain litigation related damages and venue selection provisions were removed from the bill.

According to some, these reforms are the most significant in 60 years – the most significant since the 1952 Patent Act, which was the last major conceptual overhaul of the law. However, patent law amendments in 1995 (the GATT Amendments) and 2000 also made significant changes to the patent system.

If passed, which now appears likely, the changes would be profound and affect the way that patents are obtained and enforced.

by: John R. Harris