August 5, 2011

Patent reform will likely have to wait until after Labor Day

3 min

In February 2011, the United States Senate overwhelmingly passed S.23, its version of the patent reform bill, also known as known as the America Invents Act. In June 2011, the U.S. House of Representatives passed its own version, H.R. 1249. However, the House bill differs from the Senate's version of patent reform, so the two bills must be reconciled by Congress before a unified bill can be presented to the President for his signature.

For many, the most important difference between the two bills relates to funding for the United States Patent and Trademark Office ("USPTO"). The bill passed by the Senate would put an end to the practice of fee diversion, the practice where Congress has diverted patent examination fees collected by the USPTO into the government’s general fund, which is used for purposes other than the operation of the United States Patent and Trademark Office. However, before the House bill was put to a full floor debate, a compromise was required within the House related to the fee diversion provision. House Judiciary Chairman Lamar Smith, the bill’s sponsor, offered a manager's amendment which created a fund for the excess fees that Congress could use to appropriate money back to the USPTO. Ultimately, the House version that was passed included the compromise provision for a special fund to be controlled by the Appropriations Committee.

It remains to be seen how the Senate and House versions will be reconciled. A formal conference on the bill appears to be unlikely, which would mean that the Senate would need to reach an agreement on an acceptable fee diversion provision, while also being acceptable to the House. The timing of reconciliation also appears to have been pushed back due to the recent focus by Congress on the debt ceiling issue. With the House and Senate both scheduled for their annual August recess from August 8th to September 5th, there is little time before the August break for the patent reform bill to be finalized. Indeed, on August 2nd, the Senate agreed to vote on the House bill, H.R. 1249, once the Senate reconvenes on September 6th. Senate Majority Leader Harry Reid filed cloture on the motion to consider H.R. 1249, thus placing a time limit on any debate of the bill. Under the cloture rule, the Senate may limit consideration of a pending bill to 30 additional hours, but only by vote of three-fifths of the full Senate. Considering the Senate unanimously approved the cloture vote, it is likely that there will be enough votes to end debate on H.R. 1249 quickly, which will bring it to a vote, most likely sometime later in the week of September 6th.