Patent Reform Bill Passes House

On June 23, the U.S. House of Representatives approved H.R. 1249, the America Invents Act of 2011, by a vote of 304-117. The bill included a change to the provision the would ban the diversion fees to the USPTO. The change effectively allowed the status quo to remain, i.e., forcing the USPTO to go back through the appropriations process to seek access to funds. Banning fee diversion was one of the most favorable provisions in H.R. 1249 from the perspective of most stakeholders including NVCA. This change is also a huge departure from the Senate passed bill, S. 23. Because of this change, NVCA did not support H.R. 1249.

A new provision that would expand the prior user rights statute was also included in the final bill. Given the change to a first-to-file system, there were concerns that the first inventor might have had various reason not to file a patent application and may have already commercialized the invention. This new provision would apply to any technology. However, it would generally not allow the defense against patents owned by institutions of higher education. NVCA supported an expansion of prior user rights and believes it is an integral component of any new paradigm if the U.S. patent system changes to a “first to file” system.

Unfortunately, there were no changes made to the post-grant review provisions. NVCA voiced concern that the lower estoppels standard for post-grant review in the first window does not provide the adequate safeguards to deter larger companies from using PGR as a mechanism to harass small companies.

Senator Leahy, the Senate sponsor of S. 23 which passed the Senate in March, applauded the House action on H.R. 1249 and indicated that he will make an effort to move quickly and push the Senate to pass H.R. 1249 even though there are differences between the Senate and House bills.

The NVCA will continue to advocate for our major issues on this legislation but the further along in the process, the less likely changes to the bill will be made.

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