Legislation aimed at making a number of changes to patent law in the United States has now been passed by both the Senate and the House of Representatives. This proposed legislation overcame one of its final major hurdles on June 23, 2011, when the House of Representatives approved its version of the America Invents Act by a clear vote margin of 304 to 117. The Senate had passed its version of the bill in March of this year. The House and Senate must now agree on a single draft bill before it can be passed into law on approval from the White House.

First Inventor to File and Patent Office Funding

Two of the more significant changes introduced by the House and Senate bills relate to awarding the right to obtain a patent among competing inventors, and how fees paid to the U.S. Patent and Trademark Office (USPTO) by patent applicants and patentees are utilized.

Under both the House and Senate bills, the U.S. patent system would move from a first-to-invent standard to a first-inventor-to-file standard. This change would harmonize the United States with patent regimes in most other jurisdictions in the world, including Canada, which already operate on a first-inventor-to-file basis. It would also end interference proceedings under the current first-to-invent regime that seeks to determine who among competing inventors was the first to invent a particular invention, and that then awards the right to the first inventor to obtain a patent.

The USPTO's use of the fees it collects from patent applicants and patentees would also change as a result of this new legislation, but the House and Senate bills diverge on how much freedom the USPTO should have in this respect. Historically, the USPTO has not been allowed to keep and use all of the fees collected from patent applicants and patentees. Instead, some of the fees have been redirected to other government programs. The USPTO and certain users of the U.S. patent system have expressed the wish to have the government's fee diversion ended and the USPTO given more freedom to implement improvements to service and alleviate the backlog of more than 700,000 patent applications awaiting examination.

The Senate bill proposes ending fee diversion altogether, thus allowing the USPTO to keep and use all the fees it collects. The House bill, however, would require the USPTO to place the fees it collects in a revolving fund, which would be overseen by Congress. Both bills permit the USPTO to set its own fees. Reconciling the House and Senate bills on this issue of funding could be a challenging aspect to finally achieving patent reform in the United States.

Additional Changes to the U.S. Patent System

The bills also propose other changes to the patent system, including provisions relating to damages, postgrant review, false marking, best mode and a special re-examination process for business method patents.

Is Patent Reform Finally at Hand?

It is generally thought that the two branches of Congress will be able to reconcile their bills, given their similarities. And with White House support likely, it seems that the first major amendment to the U.S. patent system since 1952 will soon be at hand.

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