USPTO Fees Deal Clears Way For U.S. House Of Representatives To Debate Proposed Patent Reform Legislation

After an agreement reached between committees of the United States House of Representatives regarding fees collected by the United States Patent & Trademark Office (USPTO), the House version of the American Invents Act of 2011 is set to be debated by the full Congressional chamber. If passed, H.R. 1249 could eventually progress to the President for either a veto or his signature approving the passage of the bill into law.

The U.S. House’s Judiciary and Appropriations Committees have been debating what to do with USPTO fees – an issue that is but one among many important issues in legislation that would dramatically change U.S. patent law. For years, fees collected by the USPTO have been diverted for other uses. The two committees have now agreed on language for H.R. 1249 to end this fee diversion and give the USPTO the ability to set its own fees. The agreement provides that any fees collected over budget will be held in a fund to be used for the USPTO itself. Crucially, however, any disbursements from that fund would require congressional approval.

The bill is the latest attempt in a long history of proposed changes to United States patent law, which has not been significantly revised since 1952. This year, however, has seen perhaps the most notable progress in recent memory. In March, the Senate’s version of the bill, S. 23, sailed through passage, and the Obama administration has already suggested its support for this instance of patent reform legislation. With the committee deal, H.R. 1249, as it is officially known in the U.S. House of Representatives, has passed its last hurdle prior to being debate on the House floor.

One reason for the lack of clarity is uncertainty over the numerous changes the legislation proposes to make to U.S. patent law. One major change garnering significant attention is the switch from a system in which patent ownership is awarded to the first to invent to a first-to-file system. Other major changes are the allowance of third-party submissions and participation in the prosecution process, and other revisions designed to reduce the huge current backlog of pending patent applications. Another controversial issue is the section called the “bank bailout” clause that specifically relates to banks and financial institutions facing patent infringement litigation that would, if enacted, establish a transitional post-grant review proceeding for review of the validity of patents that claim “a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service.”

Despite the agreement, it is unclear whether it improves the chances the legislation will survive a full House debate and vote. Notwithstanding the significant overhaul to U.S. law that it represents, which itself will draw plenty of scrutiny, many commentators and lawmakers are sure to question whether congressional oversight of any USPTO fund injects an unnecessary and uncertain political role into the question of what to do with the significant fees collected by the agency.