The House passed legislation June 23 to overhaul the patent system after approving an amendment to allow congressional appropriators to maintain control of U.S. Patent and Trademark Office (USPTO) funding, which comes entirely from user fees.

Under the appropriations language in H.R. 1249, as passed by the House, Congress would continue to set USPTO appropriations based on user fee projections, but excess revenue from fees would be put into an account that USPTO could use through further appropriations. This differs from provisions supported by the ABA in earlier versions of patent reform approved by the House Judiciary Committee and passed by the Senate as part of its patent overhaul bill, S. 23. The ABA-supported provisions would establish a revolving fund into which USPTO fee collections would be deposited and from which the office would have immediate access to operating funds.

In a June 23 letter to all members of the House, ABA Governmental Affairs Director Thomas M. Susman warned that the House-passed language would eliminate the guarantee of certainty and stability in providing paid-for resources to the USPTO and would relegate the flow of funds to operate the nation’s patent system to the existing system of delay and diversion. In the past several years, he noted, more than $700 million of fees paid to the USPTO never reached the office for its use and were diverted to other programs.

While the association prefers the funding provisions in the Senate-passed bill, both House and Senate bills include a rule change supported by the ABA.

Provisions in both bills would institute a “first-inventor-to-file” rule for obtaining a patent – an action that would replace the United States’ current and more complex “first-to-invent” standard that relies on “proof-of-invention” dates. The United States stands alone in the world, Susman said, in using the first-to-invent standard, which increases opportunity for competing claims to the same invention and facilitates protracted legal battles in administrative and court proceedings that are extremely costly, in both time and money.

 

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