WASHINGTON — Congress has given the U.S. patent system its first major overhaul since the age of the transistor radio by passing legislation designed to spur innovation and provide a sorely needed boost to the job market.
Senate passage Thursday of the America Invents Act, which sends it to President Barack Obama for his signature, is the first significant change in patent law since 1952. It took years to accomplish, with the final vote coming a little more than an hour before Obama appeared before a joint session of Congress to pitch his plan for promoting jobs growth.
“Today you passed reform that will speed up the outdated patent process so that entrepreneurs can turn a new idea into a new business as quickly as possible,” Obama said in his speech. “That’s the kind of action we need.”
The vote was 89-9, a rare example recently of Democrats and Republicans, and the House and Senate, working together for a common cause. Despite the emphasis from both parties this year on finding work for the unemployed, political divisions have resulted in almost no concrete jobs legislation.
The bill, said Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., “is an opportunity to show the American people that Democrats and Republicans can come together to enact meaningful legislation for the American people.”
Leahy’s partner on the bill, House Judiciary Committee Chairman Lamar Smith, R-Texas, said it was the most important change to patent law since the Patent Act of 1836 and hailed it as “one of the most significant jobs creation bills enacted by Congress this year.”
The legislation is aimed at streamlining the patent process, reducing costly legal battles and giving the U.S. Patent and Trademark Office the money it needs to process patent applications in a timely fashion.
Six years in the making
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, with increased prospects of another deadlock. The Senate was voting on a version already passed by the House.
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. Their concerns were voiced by Sen. Maria Cantwell, D-Wash., who said, “This is not a patent reform bill. This is a big corporation patent giveaway that tramples on the rights of small inventors.”
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 legal costs, said Sen. Jon Kyl, R-Ariz.
The bill ensures 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 in fees.
Reduce litigation, improve quality
The bill gives assurance the agency will have access to more money but maintains congressional controls. Senators defeated an amendment by Sen. Tom Coburn, R-Okla., that would have given the agency more leeway to set fees and keep all the fees it collects.
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.
IBM Senior Vice President Robert C. Weber, in a statement, praised “our elected officials for producing a bipartisan, common-sense bill that will significantly improve the U.S. patent system.”
IBM has been the top U.S. patent recipient for the past 18 years.