By Kevin E. Noonan --
An anonymous correspondent writes:
48 hours ago, it looked like the Patent Reform Act was a done deal. Today, it's not at all that clear.
Tuesday afternoon, Harold Rogers (Chairman of the House Appropriations Committee) and Paul Ryan (Chairman of Budget) wrote a letter to Chairman Smith insisting on maintaining the power of these two committees to raid the Patent Office of its user fees. [See "Patent Reform News Briefs," June 7, 2011.] What isn't mentioned in the letter is that Chairman Rogers was one of the main architects of fee diversion in the early part of the decade.
Wednesday, four senior members of the Appropriations Committee reiterated their preference for fee diversion.
It can be expected that almost all stakeholders will come out in opposition to the bill if the appropriators get their way.
On Wednesday afternoon, in a debate between Robert Armitage (Eli Lilly) and Steven Miller (Proctor & Gamble) as proponents of the bill, against Pat Choate (an economist) and Jonathan S. Massey of Massey & Gail (a former Supreme Court clerk) in opposition to the bill, reports are that audience members came away with the realization that the bill raises real questions, that it may indeed be harmful to companies outside the Fortune 100, that the opponents of the bill have valid concerns, and that constitutionality of some provisions is certainly sufficiently questionable to create commercial uncertainty.
In a third letter, Rep. Adam Schiff [D-CA] joined other legislators that have expressed concerns with several provisions of the bill.
One knowledgeable source (who wished not to be identified) expressed the opinion at the end of the day Wednesday that the bill was no longer a "done deal," that its passage was truly an open question.
Phone calls that seemed hopeless a week ago could now be decisive -- the fate of the bill turns on about 5000 phone calls to representatives.
The letters in question raise legitimate questions. As noted in an earlier Patent Docs post, Representatives Harold Rogers (R-KY) and Paul Ryan (R-WI) object to provisions of the House "patent reform" bill (H.R. 1249) by citing Constitutional concerns (transferring appropriation authority from Congress to the Executive) and partisanship (characterizing this change as being contrary to "the new Republican majority's commitment to restraining spending, improving accountability and transparency, and reducing the nation's unparalleled deficits and debt" and saying that "it would be both irresponsible and unwise to allow the PTO to operate solely under the authority of bureaucrats and White House political appointees," conveniently forgetting that the Bush White House ended fee diversion from 2004-2008).
These sentiments were echoed (almost word-for-word) in a second letter from Rep. Rogers, joined by Representatives Frank Wolf (R-VA), Norman Dicks (D-WA), and Chaka Fattah (D-PA).
On the other hand, Rep. Adam Schiff (R-CA) (at left) writes to oppose the "First to File" system set forth in Section 2 of the bill. Rep. Schiff writes that this change will be "counterproductive" because it will hurt "the most creative inventors in our economy and lead to rushed patent filings." In support of this proposition, he notes that "[t]he driving force of innovation comes from small, agile firms that marshal creative energies in exciting and productive ways" and that "[i]t is precisely these small firms" that will be hurt by this change, in his opinion. Rep. Schiff cites the need for such small companies "to do additional market research, talk to venture capitalists or investors, develop their idea further and a myriad of other necessities" that the current system permits and a "first to file" regime will inhibit. He also ties the need for outside patent counsel to prepare applications that will ultimately be discarded as a misuse of resources that would otherwise be used for "hiring and actual act[s] of invention."
Artful lobbying and crafty politics (as well as a genuine belief that "patent reform" is necessary to address the backlog and other perceived weaknesses in the patent system) have gotten us to this moment. Whether sufficient political opposition can be mounted to prevent passage of H.R. 1249 is an open question, one that will only be answered if enough stakeholders who think the bill is fundamentally flawed exercise their franchise and let their Representative know. The time (once again) is now.
Pardon me for being cynical(in addition to being Skeptical), but "[t]he time (once again) is now" to (re)fill the coffers of Congress by lobbyists.
Posted by: Skeptical | June 09, 2011 at 06:40 AM
The problem that Congressmen most often have with precluding fee diversion is not the abiltiy to raid the income for general fund purposes, but rather exercising continuing control over the agency that does not need to come to Congress to fund its operations. An agency that does not have to answer to Congress each year for what it spends money on, becomes independent of Congress, which is a circumvention of Congress' function over the power of the purse and secondarily to control the executive brance in response to policy issues that may arise. There is no greater clarity of mind in an executive official, than the posibility that a Member may take action action on their budget if they are not responsive.
Posted by: Louis Ventre, Jr. | June 09, 2011 at 08:25 AM
Louis Ventre,
You rargument is poignant, yet flawed.
The issue is very much the diversion of unds, as the budget process (even with fee diversion ended) still required Congressional approval. The need to come to Congress was still there. The power of the purse was still there.
The power to rape inventors and use the money inventors pay for other things is the critical issue.
Posted by: Skeptical | June 09, 2011 at 11:10 AM
What is hilarious is that they can solve the backlog with the stroke of a pen. Don't consider deps until after allowable subject matter is indicated and limit the number of inds. Then allow infinite deps and possibly very related inds after allowance.
/backlog end
Posted by: 6 | June 09, 2011 at 12:58 PM
The need to satisfy customers is a far better control mechanism than a bunch of politicians putting their sticky fingers into the till. Ergo, the Patent Office will run much better as a fee-supported agency, neither going hat in hand to Congress nor being pick-pocketed by politicians, than it will under Congress' dubious "oversight".
Posted by: Sven Marcus | June 09, 2011 at 02:05 PM
6 suggests omitting from the FAOM any mention of the dependent claims. This doesn't strike me as doing much for the efficiency of the examination process. How does Applicant know how to get to an allowable claim?
Does 6 see any merit in the standard format EPO opinion, attached to its search report issued just a few months after filing the appln, typically along the lines of: As for the dependent claims, the prior art applies as follows, .........(but putting into the independent claim the feature of claim 6 might produce an allowable claim).
At the EPO the rule is that, after the FAOM, Applicant gets one shot at amendment. After that, no further amendment can be admitted to the proceedings without the consent of the Examining Division. The EPC has no notion of continuing applications and there is a 2 year cap on filing divisionals. This double whammy concentrates minds wonderfully.
In my experience, the backlog at the EPO is more and more under control. It would not be though, if the EPC had continuations. For as long as they are a feature of the landscape, I have no idea how to bring down pendency, however much money is thrown at the problem. The bottom line is that Applicants want "something pending", throughout the term of the patent, and are willing to pay whatever that costs.
Thus it is, that the PTO is a golden goose for a Congress perpetually looking for more money. As we all know, eating the golden goose is a BIG mistake.
Posted by: MaxDrei | June 10, 2011 at 04:02 AM
Just because they call it “reform” doesn’t mean it is. Patent reform is a fraud on America. This bill will not do what they claim it will. What it will do is help large multinational corporations maintain their monopolies by robbing and killing their small entity and startup competitors (so it will do exactly what the large multinationals paid for) and with them the jobs they would have created. According to recent studies by the Kauffman Foundation and economists at the U.S. Census Bureau, “startups aren’t everything when it comes to job growth. They’re the only thing.” This bill is a wholesale slaughter of US jobs. Those wishing to help in the fight to defeat this bill should contact us as below.
Small entities and inventors have been given far too little voice on this bill when one considers that they rely far more heavily on the patent system than do large firms who can control their markets by their size alone. The smaller the firm, the more they rely on patents -especially startups and individual inventors. Yet small entities create the lion's share of new jobs.
Please see http://truereform.piausa.org/ for a different/opposing view on patent reform.
http://docs.piausa.org/
Posted by: staff | June 10, 2011 at 11:34 AM
H.R.1249 is an embarrassment. Urge Leadership to halt movement of this bill!
Posted by: StopPatentReformNow | June 10, 2011 at 04:38 PM
Drama over reform of Patent Law has dragged on for years. Once again Congress has introduced a legislative flop, H.R.1249. This legislation is poorly written, includes bail-outs for Wall Street banks, and attacks small businesses. STOP H.R.1249!!
Posted by: SPTKGX | June 10, 2011 at 05:40 PM
SPTKGK-
Exactly correct and extremely disheartening for an independent like myself. Fortunately one of the proponents of stealing USPTO funding is my US Representative Norm Dicks. I think I will not say a word about patent reform to him, so that he can blithely kill the chances for the passage of H.R. 1249. I would like to believe that is what he is trying to do with his efforts, but I suspect not. It is very safe to say that he will never get a re-election vote from me again. I sincerely hope that Rep. Dana Rohrebacher (sp. ck)from California will come to our rescue, as he is very passionate about Patent *reform* and knows how treacherous it really is and has been.
Stan~
Posted by: Stan E. Delo | June 11, 2011 at 01:42 PM
Until reading this week's articles on the topic, I thought that ending fee diversion was pretty much universally accepted as being the only sensible option in preventing the USPTO (an important driver of the economy) from imploding. After having read this article, I still can't see how anyone in his or her right mind would oppose the anti-fee-diversion provisions in the pending patent reform act.
http://www.aminn.org/patent-reform-act-2011-s23
Posted by: patent litigation | June 13, 2011 at 04:32 PM