Senate passes bill to overhaul patent system

Jim Abrams/ Associated Press

Washington— A little more than an hour before President Barack Obama's address to Congress on job creation, the Senate late Thursday passed and sent him an overhaul of the U.S. patent system that Obama has long endorsed as one way to promote innovation and put Americans back to work.

Proving that Congress can, on occasion, put aside its partisan differences, the Senate voted 89-9 for legislation that supporters say will streamline the patent process, reduce costly legal battles and give the U.S. Patent and Trademark Office the money it needs to process patent applications in a timely fashion.

With passage, said Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., "we could unleash the genius of our country and put our entrepreneur class to work and create jobs. It can let us compete with the rest of the world."

The bill, he added, "is an opportunity to show the American people that Democrats and Republicans can come together to enact meaningful legislation for the American people."

Obama has urged Congress to send him what he has called "the most significant patent reform in over half a century." The legislation, which transforms a patent system now operating on legislation passed in 1952, passed the Senate in March and the House in June in a slightly different form. Thursday's Senate vote accepted the House version.

It wasn't easy. Congress has debated a patent bill every year over the past six years and, before final passage, the Senate had to defeat three proposed amendments that would have forced the bill to return to the House and increased prospects of another deadlock.

The measure would switch the United States from the "first-to-invent" system to the "first-inventor-to-file" system for patent applications. That change would put the U.S. in line with other industrialized countries.

The proposal has met resistance from some small-scale and independent inventors who say it will put them at a disadvantage with big corporations. Supporters say it will add certainty to a system now riddled by costly lawsuits.

With rivals having to rely on their own secret documents to prove they were the first inventor, it becomes difficult to "gain a clear picture of whether a patent is valid without years of litigation" and millions of dollars of discovery and other litigation costs, said Sen. Jon Kyl, R-Ariz.

The bill would ensure that the patent office has the money to expedite the application process. It now takes an average of three years to get a patent approved. The agency has a backlog of 1.2 million pending patents. More than 700,000 have yet to be reviewed.

Since 1992 the agency has lost nearly $1 billion because what it receives from Congress is less than what it collects.

The original Senate bill would have given the agency more leeway to set fees and keep all the fees it collects. The House bill does give assurance the agency will have access to more money, but maintains congressional controls.

Leahy and other Senate supporters, while saying they preferred the Senate approach, urged their colleagues to accept the House bill as a whole so that they can deliver the bill to the president's desk.

Sen. Tom Coburn, R-Okla., proposed an amendment that would have brought the bill back in line with the Senate on the fee issue, but it was defeated 50-48.

A separate amendment offered by Sen. Jeff Sessions, R-Ala., dealt with a House provision intended to clarify patent filing procedures, in light of a well-publicized court case.

A drug company was a day late in filing for a patent extension of a blood thinner; its application was rejected, at a cost of hundreds of millions of dollars. A court sided with the company and the House incorporated that ruling into its version of the patent bill. Session's attempt to strip that provision from the bill lost on a 51-47 vote.

The legislation also takes steps to reduce harassing litigation, and improve patent quality by enabling third parties to submit information that may be relevant to the granting of a patent.

It encourages U.S. manufacturing by allowing producers to continue to use a manufacturing process in this country even if another inventor later patents the idea.

While small-scale inventors are divided on the legislation, it has the backing of associations representing corporations such as Caterpillar Inc., and General Electric, as well as high-tech companies including Apple and Google, along with the U.S. Chamber of Commerce and the Association of American Universities.