09.06.11

Senate Begins Debate On Leahy-Smith America Invents Act

WASHINGTON – The U.S. Senate Tuesday night took an important step toward final passage of legislation to make the first comprehensive reforms to the nation’s patent system in nearly six decades.

The discoveries made by American inventors and research institutions, commercialized by American companies, and protected and promoted by American patent laws have made our system the envy of the world,” said Senator Patrick Leahy (D-Vt.), the bill’s chief Senate sponsor.  “We cannot stand on a 1950s patent system and expect our innovators to flourish in a 21st Century world.”

“The America Invents Act will keep America in its longstanding position at the pinnacle of innovation,” said Leahy.  “This bill will establish a more efficient and streamlined patent system that will improve patent quality and limit unnecessary and counterproductive litigation costs, while making sure no party’s access to court is denied.”

The Senate voted overwhelming Tuesday night on a procedural motion to start debate on The Leahy-Smith America Invents Act (H.R.1249).  The U.S. House of Representatives passed the legislation in June with more than 300 votes.  In March, the Senate adopted a similar bill (S.23) by an overwhelming vote of 95-5.

This is the sixth consecutive year in which patent reform has been debated in Congress.  The Leahy-Smith America Invents Act will improve and harmonize operations at the U.S. Patent and Trademark Office and improve the quality of patents that are issued.  The bill will move the nation’s patent system to a first-inventor-to-file system and provide the U.S. Patent and Trademark Office with the resources it needs to work through its backlog by providing it with fee setting authority, subject to congressional oversight. 

The America Invents Act is supported by cross-sector manufacturers, innovators, small businesses and inventors, high-tech industries, universities, biotech and life sciences, labor organizations, financial planners and others.  It is also supported by the Obama administration.

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Statement Of Senator Patrick Leahy (D-Vt.),
Chairman, Senate Judiciary Committee,

On H.R. 1249, The Leahy-Smith America Invents Act

September 6, 2011

The Senate is today turning its attention back to the America Invents Act - a measure that will help create jobs, energize the economy and promote innovation without adding a penny to the deficit.  This legislation is a key component of both Democratic and Republican jobs agendas, and is a priority of the Obama administration. 

Too often in recent years, good legislation has failed in the Senate because bills have become politicized.  That should not be the case with patent reform.  Innovation and economic development are not uniquely Democratic or Republican objectives – they are American goals.  That is why so many Democratic and Republican Senators have worked closely on this legislation for years, along with a similar bipartisan coalition of House Members. 

And that is why a Democratic Chairman of the Senate Judiciary Committee can stand on the floor of the Senate and advocate, as I do today, that the Senate pass a House bill, H.R. 1249, sponsored by the Republican Chairman of the House Judiciary Committee, Lamar Smith of Texas.  As Chairman Smith and I wrote earlier this year in a joint editorial, “Patent reform unleashes American innovation, allowing patent holders to capitalize on their inventions and create products and jobs.” 

This bill, which passed the House with more than 300 votes, will make crucial improvements to our outdated patent system. These improvements can be divided into three important categories that are particularly noteworthy. 

First, the bill will speed the time it takes for applications on true inventions to issue as high quality patents, which can then be commercialized and used to create jobs.  There are nearly 700,000 applications pending at the Patent and Trademark Office (PTO) that have yet to receive any action by the PTO.  The Director of the PTO often says that the next great invention that will drive our economic growth is likely sitting in that backlog of applications. 

The America Invents Act will ensure that the PTO has the resources it needs to work through its backlog of applications more quickly.  The bill accomplishes this objective by authorizing the PTO to set its fees and creates a PTO reserve fund for any fees collected above the appropriated amounts in a given year – so that only the PTO will have access to these fees. 

Importantly, the bill also provides immediate tools the PTO needs to fast track applications, and continues discounts for fast tracked applications requested by small business, as well as for applications involving technologies important to the Nation’s economy or national competitiveness, thanks to amendments offered in the Senate by Senators Bennet and Menendez. 

Second, the America Invents Act will improve the quality of both new patents issued by the PTO, as well as existing patents.  High quality patents incentivize inventors and entrepreneurs by providing a limited monopoly over the invention.  Low quality patents, conversely, can impede innovation if the product or process already exists. 

The bill makes common sense improvements to the system by allowing, for example, third parties to comment on pending applications so that patent examiners will have more and better information readily available.  The bill also implements a National Academy of Sciences recommendation by creating a post-grant review process to weed-out recently issued patents that should not have been issued in the first place. 

The bill will also improve upon the current system for challenging the validity of a patent at the PTO.  The current inter partes reexamination process has been criticized for being too easy to initiate and used to harass legitimate patent owners, while being too lengthy and unwieldy to actually serve as an alternative to litigation when users are confronted with patents of dubious validity.      

Third, the America Invents Act will transition our patent filing system from a first-to-invent system to the more objective first-inventor-to-file system, used throughout the rest of the world, while retaining the important grace period that will protect universities and small inventors, in particular.  As business competition has gone global, and inventors are increasingly filing applications in the United States and other countries for protection of their inventions, our current system puts American inventors and businesses at a disadvantage. 

The differences cause confusion and inefficiencies for American companies and innovators.  These problems exist both in the application process and in determining what counts as “prior art” in litigation.  We debated this change at some length in connection with the Feinstein amendment in March.  That amendment was rejected by the Senate by a vote of 87 to 13.  The Senate has come down firmly and decisively in favor or modernizing and harmonizing the American patent system with the rest of the world. 

The House, to its credit, improved on the Senate bill in this area by including an expanded prior user right with the transition to a first-inventor-to-file system.  Prior user rights are important for American manufacturing, in particular. 

There is widespread support for the America Invents Act, and with good reason.  In March, just before the Senate voted 95-5 to pass the America Invents Act, The New York Times editorialized that the America Invents Act will move America “toward a more effective and transparent patent protection system” that will “encourage investment in inventions” and “should benefit the little guy” by transitioning to a first-inventor-to-file system. 

A few weeks ago, The Washington Post editorial board added that “[i]n the six decades since its last overhaul, the patent system has become creaky,” but the patent bill “poised for final approval in the Senate would go a long way toward curing [the] problems.”

The Obama administration issued a Statement of Administration Policy in connection with the House bill, in which it argued that “[t]he bill’s much-needed reforms to the Nation’s patent system will speed deployment of innovative products to market and promote job creation, economic growth, and U.S. economic competitiveness – all at no cost to American taxpayers.” 

The House bill is not the exact bill I would have written.  It contains provisions that were not in the Senate bill, and it omits or changes other provisions from the Senate bill that I supported.  But that is the legislative process, and the core elements of the House bill are identical or nearly identical to the core elements of the Senate bill.  In addition, the House bill retains amendments adopted during Senate consideration of S. 23, including amendments offered by Senator Bennet, Senator Menendez, Senator Kirk, Senator Stabenow, Senator Bingaman, and Senator Reid, among others.  

The America Invents Act, as passed by the House, will not only implement an improved patent system that will grow the economy and create jobs, but it is the product of a process of which we should all be proud.  Democrats and Republicans in the House and Senate have worked together with the administration and all interested stakeholders – large and small – to craft legislation that has near unanimous support. 

I thank Senator Kyl, the minority whip, for his comments early today.  I agree with him that sending this House-passed bill directly to the President will begin the process of demonstrating to the American people that we can work together, Democrats and Republicans, House and Senate, on their behalf.

Those now advocating for enactment of the America Invents Act without further amendment include the United States Chamber of Commerce, the United Steelworkers, the National Association of Manufacturers, the Association of American Universities, BIO and PhRMA, Community Bankers, the Coalition for 21st Century Patent Reform, the Coalition for Patent Fairness, the Small Business & Entrepreneurship Council, and businesses representing virtually every sector of our economy. 

In a recent letter from Louis Foreman, a well known independent inventor, he wrote of his support for the America Invents Act saying:  “The independent inventor has been well represented throughout this process and we are in a unique situation where there is overwhelming support for this legislation. . . . HR 1249 is the catalyst necessary to incentivize inventors and entrepreneurs to create the companies that will get our country back on the right path and generate the jobs we sorely need.”  

American ingenuity and innovation have been a cornerstone of the American economy from the time Thomas Jefferson examined the first patent application to today.  A recent Department of Commerce report attributes three-quarters of America’s post-World War II economic growth to innovation.  It is the patent system that incentivizes that innovation when it holds true to the constitutional imperative to “promote the progress of science and useful arts, by securing for limited times to . . . inventors the exclusive right to their respective . . . discoveries.”

The Founders recognized the importance of promoting innovation.  A number were themselves inventors.  The Constitution explicitly grants Congress the power to “promote the progress of science and useful arts, by securing for limited times to . . . inventors the exclusive right to their respective . . . discoveries.”  The time for Congress to undertake this responsibility and enact patent reform legislation into law is now. 

The discoveries made by American inventors and research institutions, commercialized by American companies, and protected and promoted by American patent laws have made our system the envy of the world.  But we cannot stand on a 1950s patent system and expect our innovators to flourish in a 21st Century world.  

The America Invents Act will keep America in its longstanding position at the pinnacle of innovation.  This bill will establish a more efficient and streamlined patent system that will improve patent quality and limit unnecessary and counterproductive litigation costs, while making sure no party’s access to court is denied.    

The President recently called on Congress to pass patent reform as soon as it returned from recess because it will create jobs and improve the economy without adding to the deficit.  This bill is bipartisan, it is the product of years of thoughtful bicameral discussions, and it should be sent to the President’s desk this week.  There is no reason for delay. 

When we proceeded to the Senate version of this legislation last February, we did so by unanimous consent.  The Senate proceeded to approve patent reform legislation with 95 votes.  It is disappointing that we are being delayed from completing this important legislation.  Further delay does nothing for American inventors, the American economy, or the creation of American jobs.  It is time, time to take final action on the America Invents Act.    

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