House patent reform vote generates industry praise
Technology businesses and the Patent and Trademark Office expressed satisfaction with last week's House passage of legislation that is likely to significantly boost PTO revenues by raising patent fees, eliminating fee diversion and permitting reforms sought by the agency.
By a vote of 379-28, the House easily passed the bill, H.R. 1561, and that margin of victory was a major win for the technology industry and broader business community.
Business officials have long urged an end to diverting patent-related fees for general government revenue, a practice that has cost the agency $750 million over the past decade, bill sponsor Lamar Smith, R-Texas, said during the floor debate.
Bill supporters set their sights on educating senators about the issues and expressed optimism that agreements with House appropriators and the Small Business Committee will eliminate controversies that might delay Senate passage.
"This was a bill that could have gone nowhere and instead" passed easily, Smith said, because House leaders were "able to come up with a solution that did not step directly on the shoes of the appropriators."
Without the bill, PTO "would not be able to make much-needed improvements to ensure quality and expedite patent and trademark processing," said Jon Dudas, PTO's acting chief.
Business groups, which would foot an average 15 percent patent-fee increase under the bill, concurred. The groups said their members would support an increase if fee diversion stopped.
"It would be hard to overstate the sense of relief in the business community, particularly the high-tech sector," over passage of the bill, said National Association of Manufacturers President Jerry Jasinowski. He said his group has "watched with dismay" as PTO performance deteriorates.
"Modernizing the U.S. patent system will enable us to bring cutting-edge technologies to consumers faster, which could help spur economic growth and job creation in the U.S.," said Rhett Dawson, president of the Information Technology Industry Council, whose members include Apple, Canon, Dell, Eastman Kodak, Hewlett-Packard, IBM, Intel and Microsoft.
"For the first time, there has been something done" about the thorny issue of fee diversion, said Mike Kirk, executive director of American Intellectual Property Law Association. "If it passes the Senate, it would end diversion" and likely pave the way for the office to get far more money.
The lopsided margin of passage came after a January agreement to create a "refund" program designed to eliminate the incentive for diverting agency revenue to non-PTO programs. Under the amendment, patent revenues collected in excess of the amount appropriated to the agency would be deposited into a PTO "reserve fund."
"It does not take the PTO off budget, and that is a big step back" from the earlier language that was controversial with appropriators, Kirk said. Businesses concerned about administering rebates said they want appropriators to allocate the full amount instead.
Administering any rebates "may cause some angst," but patent interests "don't want to start playing around" with their best shot at ending diversion in a decade, Kirk said.