By Donald Zuhn --
On Tuesday, the Senate passed the America Invents Act (S. 23) by a 95-5 vote (see "Senate Passes S. 23"). While the provisions that made it into the bill were not entirely clear yesterday, a version of the legislation as passed was posted on the THOMAS website today. The bill moving to the House contains provisions on the following:
• First inventor to file (Sec. 2)
• Inventor's oath or declaration (Sec. 3)
• Virtual marking and advice of counsel (Sec. 4)
• Post-grant review proceedings (Sec. 5)
• Patent Trial and Appeal Board (Sec. 6)
• Preissuance submissions by third parties (Sec. 7)
• Venue (Sec. 8)
• Fee setting authority (Sec. 9)
• Supplemental examination (Sec. 10)
• Residency of Federal Circuit judges (Sec. 11)
• Micro entity defined (Sec. 12)
• Funding agreements (Sec. 13)
• Tax strategies deemed within the prior art (Sec. 14)
• Best mode requirement (Sec. 15)
• Technical amendments (Sec. 16)
• Clarification of jurisdiction (Sec. 17)
• Transitional program for covered business-method patents (Sec. 18)
• Travel expenses and payment of administrative judges (Sec. 19)
• Patent and Trademark Office funding (Sec. 20)
• Satellite offices (Sec. 21)
• Patent Ombudsman Program for small business concerns (Sec. 22)
• Priority examination for technologies important to American competitiveness (Sec. 23)
• Designation of Detroit satellite office (Sec. 24)
As we reported yesterday, a number of patent and industry organizations, including the American Intellectual Property Law Association (AIPLA), Innovation Alliance, Biotechnology Industry Organization (BIO), and Coalition for Patent Fairness, were quick to release statements regarding the Senate's passage of S. 23 (see "Reaction to Senate Passage of S. 23"). The Patent Office also issued a statement about the legislation, albeit prior to the Senate vote. In a short press release issued in anticipation of the Senate vote, USPTO Director David Kappos "urge[d] the Senate to pass this crucial legislation," which he said would "help to deliver a 21st century patent system that better equips the USPTO to move innovative ideas with sound patent protection to the marketplace." Not surprisingly, Director Kappos focused on provisions that would impact Office funding, citing an Federal Trade Commission (FTC) report recommending, in the Director's words, that "for our patent system to best serve America's innovators, it is essential that the USPTO have adequate funding to address the backlog of patent applications -- one of the key reforms this legislation would make possible."
Last week, the Director wrote on his blog that the patent system was in "immediate need of attention," and that S. 23 would "update our patent system by offering greater certainty about patent rights, lower fees for independent inventors and micro-entities and faster alternatives to expensive litigation," as well as "enable a financially stable USPTO that promotes growth for innovators in all industries and of all sizes." In his post, the Director cited the Statement of Administration Policy on S. 23 from the Office of Management and Budget (OMB), which notes that "[t]he Administration supports Senate passage of S. 23," stating that:
As a whole, this bill represents a fair, balanced, and necessary effort to improve patent quality, enable greater work sharing between the United States Patent and Trademark Office (USPTO) and other countries, improve service to patent applicants and the public at the USPTO, and offer productive alternatives to costly and complex litigation.
The Administration's statement continues:
By moving the United States to a first-to-file system, the bill simplifies the process of acquiring rights. This essential provision will reduce legal costs, improve fairness, and support U.S. innovators seeking to market their products and services in a global marketplace. Further, by providing authority for the USPTO to establish and adjust its fees to reflect changes in costs, demand, and workload, the bill would enhance productivity -- reducing delay in the patent application process -- and ensure full cost recovery at no taxpayer expense.
With respect to the Senate bill's first inventor to file provision, the Director writes that:
By moving the United States to a First-Inventor-to-File (FITF) system, the bill establishes greater speed and certainty about property rights in the innovation marketplace, while also leveling the playing field for anyone seeking to participate in global commerce. While I recognize some have concerns about this switch, the reality is that the current First-to-Invent system is fraught with peril. Under the current system, a host of objections can be raised in litigation that undermine a patentee’s rights. Such litigation is expensive and time consuming.
The patent reform debate now moves to the House. Based on the Administration's comments concerning S. 23, if the House passes legilsation resembling the Senate bill, the six-year trek to enact some form of patent legislation could be at an end.