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House Votes On Patent Reform
- 7/1/2011

On June 23, 2011, Congress took another step towards patent law reform, as the House of Representatives voted to approve its version of the “America Invents Act.” 

The Senate passed a similar version of the bill in the spring, which included changing the U.S. patent system from a first-to-invent system to a first-to-file system.  Other changes in the Senate version include setting limits for damages in false marking suits, allowing for a post-grant review for defendants in a patent-related litigation, and limiting damages resulting from patent litigation.  The Senate version also provided for pre-issuance submissions to allow any third party to submit any printed publication for consideration by an Examiner while an application is pending and after the application has published. 

Click here for more information on the Senate version.             

The House of Representatives’ version includes the provisions set forth in the Senate’s version, within some additional provisions.  One provision was included to address Patent Office fees that have been diverted to other congressional programs.  The House version of the America Invents Act allows the Patent Office to set its own fees, although surpluses are to placed in a fund that is overseen by appropriations panels.  Thus, there is concern that Patent Office revenue will still be diverted out of the Patent Office.

Another new and potentially controversial provision in the House version regards a transitional program for “covered business method patents.”  The rule specifically defines a “covered business method patent” as a patent that “claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions.”  According to the rule, a person who has been sued or is otherwise charged with infringing a business method patent may file a petition with the Patent Office to invalidate the patent.  The rule requires that the grounds for the petition must be based upon prior art.  Some members of Congress, including John Conyers, Jr. (a Michigan Democrat), complain that the bill unfairly takes patent rights away from patent holders, and gives large banks a “special new bailout at the expense of small inventors and the American taxpayer.”  Moreover, the bill is retroactive, which covers holders of “covered business method patents.” 

The next step in the legislative process is to reconcile the Senate version and the House version.  Once that is done, the bill gets voted on by both houses of Congress, and then given to the President for signature.  Industry-wide lobbying is now taking place to strike certain provisions in the bill or stop its passage altogether.  It seems likely at this point, however, that some version of the bill is likely to pass into law. 

Click here for a copy of the House version of the America Invents Act, and check back with the Ostrolenk website for further updates on this important story.  



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