Senate Votes 93-5 to End Debate on Patent Reform, Vote Imminent

The United States Senate voted 93 to 5 earlier this evening to end debate on patent reform, which should set up a vote on H.R. 1249 in the coming days.

The United States Senate first passed its own version of patent reform, dubbed the America Invents Act – S. 23, in February 2011. The House of Representatives took up patent reform in the Spring, ultimately passing H.R. 1249, also dubbed the America Invents Act. Because the House version of patent reform was not identical to the Senate version of patent reform the legislation pinged back to the Senate. Immediately before the Senate went out on its annual August recess Senate Majority Leader Harry Reid (D-NV) filed for cloture on H.R. 1249, scheduling the Senate’s first day back after the August recess as the day for the cloture vote. That cloture vote is what passed by a vote of 93-5.

Debate on patent reform is now over in the Senate. In the coming days the Senate will vote on and almost certainly pass H.R. 1249, sending it to the White House for the signature of President Obama. The Obama Administration has lobbied hard for this patent reform and although they are not getting everything they wanted, most notably an end to the practice of fee diversion, President Obama’s signature is guaranteed.

President Obama will sign this patent legislation as soon as it hits his desk, which could be even before his much anticipated speech on the economy on Thursday, September 8, 2011. Even if the bill is not through the Senate and signed by him expect President Obama to make reference to the patent reform bill at least in passing.

I could say that it is unclear to me why patent reform is being characterized by both parties as a jobs bill, but that would be a lie. It seems virtually certain that this particular patent reform will not create any jobs whatsoever, but President Obama, Congressional Republicans and Congressional Democrats are desperate for good news on the economy, good jobs numbers and a reduction in unemployment. In the U.S. we are a consumer driven economy and when unemployment remains high people become increasingly pessimistic, which means they lose confidence and a loss in confidence means less spending, which worsens the economic outlook. So despite the fact that patent reform will not result in any new jobs, it will be touted as a jobs bill on both sides of the isle and sold to the American people as one step toward a brighter economic future and jobs recovery.

Yesterday Professor Dennis Crouch of PatentlyO published the results of his online survey relative to patent reform, filtering out responses from those without any relevant experience in the field left 1161 responses.  On particular question, which asked whether patent reform is likely to create 200,000 jobs, as is the common claim.  Crouch’s survey shows pretty clearly that these claims are fairly well disputed within the industry, with 80% taking the position that patent reform will not create those jobs. See Patent Reform 2011 Survey Results.

Already, in the moments after the Senate cloture vote, the Innovation Alliance is out with a statement.  The sentiment expressed by the Innovation Alliance is likely nearly universally shared by everyone within the patent community.  The Patent Office is user supported with applicants paying fees for service, yet every year Congress siphons off some of those fees for wholly unrelated purposes.  Fee diversion needs to stop.  It is a tax on innovation.

Innovation Alliance Executive Director Brian Pomper said:

We commend the congressional sponsors of the legislation for their willingness to consider and accommodate many points of view over years of debate and discussion. We believe, however, that Congress risks missing this historic opportunity to end once and for all the diversion of fees that patent applicants pay to the U.S. Patent and Trademark Office (USPTO). Fee diversion is a tax on innovation that hinders both innovation and job creation, and ending fee diversion permanently is an issue that unites virtually all stakeholders on all sides of the patent debate. The Innovation Alliance believes there is no more important step we can take to promote the health of the innovation ecosystem in the United States. That is especially true in light of the variety of new resource-intensive responsibilities and procedures H.R. 1249 assigns to the USPTO. We remain committed to the goal of working with this Congress to end fee diversion permanently.

Had the Obama Administration been given what they asked for, which was an end to fee diversion that was originally supported in the Senate and championed by Republican Senator Tom Coburn (R-OK), patent reform well could have been characterized as a jobs bill.  Due in part to the U.S. Congress using the Patent and Trademark Office as a piggy bank over the last two decades the Office has well over 1 million applications pending.  Many technologies grow stale waiting for action.  Inaction by the USPTO holds up companies, particularly start-up companies.  They are unable to demonstrate the uniqueness of their technology to investors because the USPTO cannot even get around to considering their application in a timely manner.  Such delay does cost the economy jobs — likely millions of jobs over the last two decades.

An end to fee diversion would be a jobs bill.  Appropriators, you know those folks who got us into this budget mess, were the ones in the House who prevented the USPTO from being guaranteed to keep 100 cents of every user fee paid dollar.  The Senate is poised to capitulate now and move on to what is next.  I do hope the Innovation Alliance keeps up the pressure; I know I will.  Unfortunately the reality is that the USPTO will continue to be a piggy bank for Congress, which is revolting.

Soon we will be able to start to turn our attention from “if” patent reform will happen to how to handle patent reform now that it has been enacted.  The Practising Law Institute has a tentatively planned program in San Francisco, CA, which will be broadcast via the web, on September 26, 2011.  I will be on the panel along with Robert Armitage, Stephen G. Kunin and Brad Pedersen.  Stay tuned for more details.


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Join the Discussion

17 comments so far.

  • [Avatar for Stan E. Delo]
    Stan E. Delo
    September 9, 2011 01:44 am

    Did the Coburn Amendment survive to prevent fee diversion? I think I will try fire at least one of my Senators, as in Patty Murray, as she has apparently quaffed too freely of the re-election kool-aid. My other Senator Maria Cantwell I can support perhaps, as she was a one in 95 holdout in past efforts at Patent Reform, which made me very proud of her. I think some Jaded Jasmine tea is in order, with a heavy infusion of Juniper berries to give it some tang, as well as a who cares about anything anymore sort of attitude. Maybe a litle dose of wolf-bain as well, just to see where that takes me.

    Hasta la adios zum alles,

  • [Avatar for CHOC AULIT' TARD]
    September 8, 2011 05:11 am

    It will now be voted in for sure. The Tard as Susan and Mickey call her in their notes has figured it all out. and it will be another step closer to no more Patent Attorneys unless you have lots of money to Buy Congress. But then what they did to me wasn’t even FTF. I just hope “TO YOU” your Education will have been worth all of this.
    Choc aulit’ Tard

  • [Avatar for Stan E. Delo]
    Stan E. Delo
    September 7, 2011 08:11 pm

    At least they perhaps took Gene’s suggestion by calling this Senate session Patent Law CHanges, instead of Patent Reform, the latter of which is definately a misnomer for this (H.R. 1249) legislation. I think I feel a Jaded Jasmine kool-aid jag coming on. At least I didn’t miss all of the *debate*, as more debate is up next. I can hardly wait to hear how this wonderful new legislation will magically put us all back to work at top wages again. This oughtta be really rich, in a sad misguided sorta way.

  • [Avatar for 1984 by 2012?]
    1984 by 2012?
    September 7, 2011 05:46 pm

    I’m with you, Lawrence.

    And when added to other gov “initiatives,” “policies,” “rules,” and laws, it sometimes feels like we’re closer to George Orwell’s “1984” than ever.

    Too many of the politicians have turned rights into wrongs . . . and wrongs into rights.

  • [Avatar for Lawrence S. Cohen]
    Lawrence S. Cohen
    September 7, 2011 04:05 pm

    We have been over and over how the new Patent Law will do bad or good things. For me, the only good thing was ending fee diversion. But now, the scariest thing is how the politicians either misunderstand the consequences of the new legislation, or they just plain lie about it to the public (while hiding their true goals, like attracting contributions). It is scary because I have to assume that the same kind of false information is given to us about all legislation. I wish I didn’t get to see this because when I was ignorant (OK, not really ignorant, but less clearly informed), I could at least feel some level of confidence that we are in reasonable hands, with reasonable goals. Now I just despair for the future of our country with a Government that either can’t or won’t do anything to save us.

  • [Avatar for Beth Hutchens]
    Beth Hutchens
    September 7, 2011 03:03 pm

    Interesting. I’ll have to think about this one. Let me look into it over the next couple of days and maybe I’ll write one of my rants in the next couple of weeks. Feel free to inbox me.

  • [Avatar for Mark Nowotarski]
    Mark Nowotarski
    September 7, 2011 01:42 pm

    @Mark- Would you expand a bit on your copyright theory? I can see it for software inventions, maybe even business methods, but how about mechanical inventions? Thanks

    @Beth, As I understand it, open hardware and open design licenses release design files for physical objects under essentially an open source copyright license. What the license demands is that you cannot use the design files to create physical objects unless you release any improvements you make to the design files under a similar open source license. So it would be copyrights to the design files that you are enforcing. The CERN license is one example.

    Here is a link to the CERN license

    Are there any copyright experts out there who can say if you really can enforce a copyright in this manner?

  • [Avatar for Beth Hutchens]
    Beth Hutchens
    September 7, 2011 11:39 am

    Cue the clown music! We can have a viewing party! BD can bring the kool aid and I’ll bring my Magic 8 Ball.

    btw, BD, I’ve been looking into trade secret protection as an alternative to patents for a bit now. It’s starting to look more and more attractive

    @Mark- Would you expand a bit on your copyright theory? I can see it for software inventions, maybe even business methods, but how about mechanical inventions? Thanks

  • [Avatar for Michael Bowman]
    Michael Bowman
    September 7, 2011 11:20 am

    HR1249, Section 14 (Tax Strategies Deemed Within the Prior Art), will eliminate portions of the Class 705 (i.e., Business Methods) schedule, and thus is actually anti-innovation. The banking, tax prep and analysis, and insurance industries will be directly affected.

  • [Avatar for Stan E. Delo]
    Stan E. Delo
    September 7, 2011 09:52 am

    Patent Law Changes are up next at 10:00 AM Eastern on C-Span-2.

  • [Avatar for Mark Nowotarski]
    Mark Nowotarski
    September 7, 2011 07:08 am

    If you want to see IP creating jobs, take a look at some of the newer forms of IP being developed based on extensions of copyright. Creative Barcode, for example, is a way for inventors to share early stage ideas before they meet the requirements for patentability. Open hardware is a way for inventors to build development communities around core technologies. New companies and new jobs are being created right now using these new forms of IP.

  • [Avatar for Blind Dogma]
    Blind Dogma
    September 7, 2011 07:05 am

    Soon we will be able to start to turn our attention from “if” patent reform will happen to how to handle patent reform now that it has been enacted.


    Do you have training courses for “Optimal Protection Through Trade Secrets”?

  • [Avatar for EG]
    September 7, 2011 06:53 am

    To all:

    The Gong of Doom has now sounded. If only I could have Tom Coburn as my senator instead of the two “clowns’ I’ve got (Sherrod Brown and Todd Portune).

  • [Avatar for Blind Dogma]
    Blind Dogma
    September 6, 2011 10:26 pm

    deluged by the onslaught of meaningful patent filings

    Step – you got this part right – the deluge will happen so that as many applications will receive the benefit of the current set of laws before this new legislation takes effect.

    Strap yourself in for the rollercoaster as we climb the big first hill…

  • [Avatar for Anonymous]
    September 6, 2011 09:52 pm

    Why is the bill not being opposed by the biotech industry for the simple matter of the inclusion of this incredibly vague language?:

    “Notwithstanding any other provision of law, no patent may issue on a claim directed to or encompassing human organism.”

  • [Avatar for step back]
    step back
    September 6, 2011 08:30 pm

    Strap on your seat belts fellow IP Watchdoggers.

    The genius and ingenuity of American inventors will be “unleashed” all too soon by passage of this bill and then we will be deluged by the onslaught of meaningful patent filings and by the landslide of wealth-enhancing job creations that are sure to follow from such passage.


  • [Avatar for Ron Robinson]
    Ron Robinson
    September 6, 2011 07:45 pm

    Eugene, you should take a look at Section 18 of the law as it currently stands – that will make the law a major jobs killer.

    Section 18 gives big banks and Wall Street another bite at the apple for getting a patent revoked after being defeated in court.

    What do you think will happen to investment $$ when investors see that go into effect?