Senate Passes Landmark Patent Reform Bill

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The Senate on Tuesday overwhelmingly approved landmark legislation to overhaul the U.S. Patent and Trademark Office, a reform effort more than half a decade in the making that aims to improve the quality of patents and curb frivolous litigation.

The America Invents Act, originally titled the Patent Reform Act, cleared the upper chamber by a vote of 95 to five, a resounding legislative victory for the bill’s author, Judiciary Committee Chairman Patrick Leahy (D-Vt.), who has backed efforts to reform the patent system in each of the previous three Congresses.

“Reforming the nation’s antiquated patent system will promote American innovation, create American jobs. It will grow our economy,” Leahy said today on the Senate floor.

Chuck Grassley (Iowa), the Ranking Republican on the Judiciary Committee, and Orrin Hatch (R-Utah) were original co-sponsors of the bill.

The debate over patent reform has been closely watched by members of the tech sector, which have long pressed for measures to shield themselves from patent litigation that they argue is often a burdensome distraction. At the same time, several groups representing inventors and small businesses have long campaigned against any provision that would weaken the legal mechanisms available to their members to assert their patents.

Excluded from the bill was a controversial amendment, backed by many tech companies, that would have eased the process for initiating an in-house administrative review process at the Patent Office for challenges to patents that have been granted, a measure billed as a less costly alternative to private litigation.

Ed Black, the president and CEO of the Computer and Communications Industry Association, a trade group whose members include Google, Microsoft and Oracle, warned that excluding the post-grant review provisions from the patent reform bill could make “the current situation even worse for the tech industry.”

Sen. Mark Udall (D-Colo.), one of the co-sponsors of the amendment, said he would seek to include it in the final version a negotiating committee would produce to reconcile the Senate bill with legislation produced by the House.

Rep. Lamar Smith (R-Texas), the chairman of the House Judiciary Committee who authored patent reform legislation in 2005 that provided the original framework for the Leahy bill, hailed the Senate’s passage, and pledged to introduce his own legislation in short order.

“The Senate bill makes several important changes to our patent system,” Smith said in a statement. “The House will introduce similar legislation this month that will help turn the ideas of American innovators into companies and jobs.”

The Senate bill would transition the Patent Office to a so-called first-to-file system, bringing the U.S. system in line with the patent regimes of much of the rest of the world. The shift would confer patent rights on the first inventor or company to file an application, rather than the current first-to-invent system.

Supporters of first-to-file contend that it will lower the cost and complexity of patent disputes. Critics, meanwhile, warn that it will result in a race to the patent office and play into the hands of large corporations. An amendment to strike the first-to-file provision, offered by Dianne Feinstein (D-Calif.), was handily defeated last week.

Other, less controversial provisions of the bill include language to end fee diversion, a measure that would ensure that the filing fees patent applicants pay fund the Patent Office. Over the years, patent fees have been diverted to fund other government programs, a condition that has left the office strapped for resources and seen its backlog swell to more than 700,000 applications.

The America Invents Act would also provide an expedited review for applications for patents describing inventions deemed key to national priorities, such as clean energy technology.

The White House has endorsed the bill as a key plank of President Obama’s economic agenda.

“Creating new jobs and new opportunities in a fiercely competitive world demands policies that encourage and support American innovation and ingenuity. So I’m pleased that, on a bipartisan basis, the Senate has passed the most significant patent reform in over half a century,” Obama said in a statement responding to today’s passage of the bill.

“I want to thank Senators Leahy, Grassley and Hatch for their leadership on this issue, and I look forward to working with the House of Representatives to pass patent reform legislation I can sign into law.”

Kenneth Corbin is an associate editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.