Patent reform on the brink

Patent reform on the brink! Credit: stuartbur/istockphoto

Congress stands poised to introduce dramatic changes to US patent law, switching from a first-to-invent to a first-to-file system. Late in June the House of Representatives passed its version of the American Invents Act (H.R. 1249), following similar actions of the Senate, which passed its patent reform bill last March. Despite this momentum, the two bills are sufficiently different to require negotiation and reconciliation—raising a whiff of doubt about the ultimate success of these reform efforts. One promising sign is that US Senate Majority Leader Harry Reid of Nevada announced that the Senate will take up patent reform on the first day back from its August recess. He urges the Senate to adopt the House bill, a procedural step that aims at simplifying reconciliation of their differences, but which also risks obstructionism. One key attraction of the House bill is that it incorporates a political compromise permitting the US Patent and Trademark Office (USPTO) to fund its activities in part through revenues from fees that it collects. Those provisions are “necessary to prevent user fees collected from patent and trademark applications from being redirected to other non-USPTO purposes,” according to the Biotechnology Industry Organization (BIO) in Washington, DC. More generally, both versions of this reform legislation would move the US patent system into a first-to-file system, thus aligning it with Europe and many other industrialized nations. BIO, the Pharmaceutical Research and Manufacturers of America of Washington, DC, and other industrial groups generally back these patent reform efforts, saying they will streamline patent reviews and will help to reduce costly litigation over patents and patent applications. However, critics of the new legislation argue that some of these provisions will weaken the hand of inventors at universities and startup companies. For example, Carl E. Gulbrandsen, who is managing director of the Wisconsin Alumni Research Foundation in Madison, Wisconsin, asserts that the reforms, if implemented, would “decrease the value of patents, make it more difficult to license and increase the cost of enforcement, which impacts innovators disproportionately more than large companies.” He also questions whether the new law is compatible with the US Constitution. “Times are hard enough as it is to start a company,” he says. “The last thing investors want is uncertainty, which is exactly what will happen if this proposed legislation becomes law.”

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Fox, J. Patent reform on the brink. Nat Biotechnol 29, 778 (2011). https://doi.org/10.1038/nbt0911-778a

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