Senate Passes Patent-Reform Bill to Significantly Change Patent System

On March 8, 2011, the U.S. Senate passed the America Invents Act in a 95 to 5 vote. The bill proposes changing the U.S. patent system to honor the first to apply for a patent instead of maintaining the current system, which grants a patent to the first to invent a patentable product, machine or process.

The bill also includes provisions that would change the patent application and review process. The bill is sponsored by Senators Patrick J. Leahy, D-Vermont; Charles E. Grassley, R-Iowa and Orrin G. Hatch, R-Utah.

In addition, the America Invents Act would give the U.S. Patent and Trademark Office the power to regulate their funding. This would likely result in increased patent-application fees to fund the processing of over 700,000 backlogged applications.

If passed, the bill would offer – for an increased fee – an expedited review process with a guaranteed decision on the application within one year. Currently it takes about three years for a patent application to be approved. The bill also proposes a post-grant review system meant to keep the number of patent litigation cases low.

President Obama favored the bill, commenting that it was “long overdue” and that, if passed, it would “increase transparency and certainty for inventors, entrepreneurs and businesses, [and] help grow our economy and create good jobs.”

Caterpillar Inc., 3M Co. and General Electric Co. are members of the Coalition for 21st Century Patent Reform, which has pushed for patent reform for many years. They argue that the bill will synchronize the U.S. Patent and Trademark Office with other nations’ patent offices and make it simpler to settle disputes over inventors’ rights.

However, small businesses and entrepreneurs counter that the bill favors large companies that have the resources to rush patent applications to the Patent Office.

Dell, Google, I.B.M and Microsoft are members of the Information Technology Industry Council, which wrote a letter to Senator Leahy explaining their opposition to one provision of the bill. These companies believe the proposed process for re-examining patents will actually increase patent cases heard in courts instead of reduce them.

Whether the bill will be passed by the House of Representatives is unclear. The New York Times reported that the bill is unlikely to be passed by the House anytime soon. However, the Wall Street Journal claimed the office of the House Majority Leader Eric Cantor, R-Virginia, said that patent reform is definitely on the House agenda.

If you would like more information on the patent-application process or patent litigation, contact an experienced patent law attorney in your area.