House Judiciary Committee Approves Patent Reform Proposal

The House Judiciary Committee has approved the America Invents Act (H.R. 1249), a bill to modernize and reform the patent system. The bill was reported favorably to the House floor by a vote of 32-3.

Similar to legislation supported overwhelmingly by the Senate in March, H.R. 1249 implements a first-inventor-to-file standard for patent approval, creates a post-grant review system to weed out bad patents, and helps the Patent and Trademark Office (PTO) address the backlog of patent applications.

House Judiciary Committee Chairman Lamar Smith (R-Texas), the bill’s primary sponsor, praised the Committee vote.

Chairman Smith: “Today’s vote puts much-needed patent reform one step closer to enactment.  The America Invents Act updates our patent system to make it easier for innovators to produce new technologies that drive economic growth and generate jobs.

“This important legislation is long overdue.  The last major patent reform was nearly 60 years ago.  Since then, American inventors have helped put a man on the moon, developed cell phones and launched the Internet. But we cannot protect the technologies of today with the tools of the past.

“In order to have a healthy economy, we must have a healthy patent system. These reforms discourage frivolous suits, enhance patent quality and streamline international principles. After six years of bipartisan efforts, I look forward to crossing the finish line on patent reform.”

Below is a summary of some of the main components in the House patent reform bill:

First Inventor to File: Creates more certainty about patent ownership by adopting a first-inventor-to-file standard for awarding patents.

Post-Grant Review: Establishes a new administrative construct called post-grant opposition that allows disputes involving patent quality and scope to be settled.

Business Method Patents: Authorizes a special ex parte reexamination of business-method patents.  This process allows business method patents to be re-examined using the best prior art as an alternative to expensive litigation and helps invalidate poor-quality patents.

Third-Party Submission of Prior Art: Prevents bad patents from being awarded by permitting third parties to submit information regarding a patent application that may be relevant for the patent examiner to review.

PTO Fee-Setting Authority & Revenue Retention: Authorizes the PTO Director to establish patent and trademark fees to recover the costs of services rendered to inventors and trademark filers. Allows the PTO to retain revenue generated by these fees in order to hire new examiners and address the patent backlog.

Best Mode: Retains the best mode requirement for purposes of submitting an application, but prevents a defendant from claiming that a plaintiff failed to comply with the best mode requirement when filing for a patent.

Also See:

Strong Growth in Demand for Intellectual Property Rights in 2012 – WIPO

USPTO Updates Professional Conduct Rules and Registration Examination for Patent Attorneys

Expanded SHIELD Act Filed to Combat Patent Trolls

USPTO Publishes Final Rules and Guidelines Governing First-Inventor-to-File

USPTO Seeking Comments on Matters Related to the Harmonization of Substantive Patent Law