Momentum for Patent Reform Bill Stalls

June 14, 2011

The U.S. House of Representatives is expected to consider the NSBA-opposed America Invents Act (H.R. 1249) in the very near future. The House had seemed poised to vote on the legislation this week, but growing concerns with the bill appear to have temporarily derailed the effort.

A House Committee on Rules hearing on the bill was scheduled for the afternoon of Wednesday, June 15, 2011. The hearing was postponed, however, as public opposition to various provisions in the bill mounted.

As previously reported, fifty-two members of the House of Representatives recently sent a letter to the chair and ranking member of the Committee on Rules, requesting that any resolution reported by the committee include a provision for a separate period of at least 20 minutes for debate on the constitutionality of H.R. 1249.

Another prominent salvo was fired by Reps. Paul Ryan (R-Wis.), chair of the House Committee on the Budget, and Harold Rogers (R-Ky.), chair of the House Committee on Appropriations, who recently detailed their concerns over a key provision in the bill to the lead sponsor of H.R. 1249: Rep. Lamar Smith (R-Texas), the chair of the House Committee on the Judiciary.

Ryan and Rogers oppose the provisions in the bill that would allow the U.S. Patent and Trademark Office (PTO) to collect and spend the fees it collects without going through the appropriations process. They wrote: “We strongly oppose this proposed shift of billions in discretionary funding and fee collections to mandatory spending. Putting PTO funding on auto-pilot is a move in exactly the wrong direction, given the new Republican majority’s commitment to restraining spending, improving accountability and transparency, and reducing the nation’s unparalleled deficits and debt.”

NSBA supports ending the PTO’s fee diversion. The office is underfunded and overworked and its role in American innovation and the economy is too important to neglect. The PTO currently collects millions of dollars more than it receives in appropriations each year. In Fiscal Year 2011, it received $2.09 billion—or about $100 million less than it is expected to collect in fees.

Yet, the agency also is beset by a shocking backlog. Currently, there are more than 700,000 patent applications waiting to be examined and it takes a little more than three years for the office to process an application! This is unacceptable.

While NSBA supports ending the fee diversion, it remains firmly opposed to the provisions in America Invents Act (H.R. 1249) on post-grant patent challenges and its effective elimination of the American grace period. NSBA continues to contend that these provisions would put innovative small firms and startup businesses at greater risk than the current system and would result in a U.S. patent system strongly titled in favor of large incumbent corporations.

Please take a moment to urge your representative to oppose the America Invents Act (H.R. 1249).