SAN JOSE, Calif. – A committee of the U.S. House of Representatives voted overwhelmingly to send a draft patent reform bill to the full House for debate. The 34-to-3 vote momentarily took the breath away from one of its sponsors, Rep. Lamar Smith (R., Texas).
"Wow, that is great," said Smith when results of the roll call vote were announced following debate over as many as 30 amendments to the bill.
The bill (H.R. 1249) faces makes sweeping changes on several fronts including a move from a first-to-invent to a first-to-file system. At least two amendments to strike the first-to-file provision were voted down.
Representatives agreed to strike from the draft bill language that would have redefined prior art. However, they agreed to continue to work on the issue with the goal of inserting a new definition into the final bill before a full vote of the House which could come within weeks.
The draft bill is likely to go through another tough round of horse trading behind the scenes as competing groups from the electronics sector and other industries try to make last minute changes. It must also be reconciled with a separate but similar bill passed by the Senate last month. President Barack Obama has already indicated he likely will sign the bill.
In a sign of the breadth and complexity of the issues, members considered as many as 21 amendments to the bill and 12 amendments to a manager's amendment submitted by Rep. Smith. Competing factions from the electronics industry are issuing letters of qualified support or rejection of the bill that amount to scorecards based on which amendments pass and fail.
The version of the bill that goes to the full House includes provisions to let the patent office set and keep all its own fees. There is wide support to improve funding for the agency which faces a backlog of nearly 800,000 applications.
It also makes several changes to the ways patents can be re-examined. For example, it extends to 12 months after a patent infringement suit has been filed the time allowed to challenge an existing patent. The Senate bill called for a nine month limit.
Rep. Zoe Lofgren (D., Calif.) tried and failed to insert an amendment that would have given accused infringers more time to challenge patents. She proposed a limit of 30 days after a Markman hearing that determines how patents and claims will be construed in a given case.
The bill also allows third parties to submit prior art for an application in process in an effort to keep poor quality patents from being awarded. The bill also calls for the patent office to complete within four years a study of the impact of the new legislation.
Much of the tension in the electronics industry in the debate comes from competing interests between large product-oriented corporations and smaller companies with large licensing businesses.
The Coalition for Patent Fairness which represents Silicon Valley giants including Apple, Cisco Systems, Google, Hewlett-Packard, Intel and others offered "qualified support" for the bill, but "reserved the right to support additional amendments on longtime goals" such as changes in policies for challenging existing patents.
The Coalition conditioned its support based on the rejection of a redefinition of the term prior art which would replace "the well-defined terms 'public use' and 'sale' in current law with the heretofore undefined term, 'public disclosure,' and making related changes," the group said in a letter to Congress. "As you know, the definition of prior art is at the very core of the patent system, and any alteration of it can have major consequences," it said.
The Innovation Alliance--representing companies with large licensing businesses such as Dolby, Qualcomm and Tessera—raised concerns about several elements in the bill including one that could put infringement suits on hold while patents are re-examined.
"The net effect would be a patent litigation system that protects the interests of large infringers and undermines the enforceability of patent rights to the detriment of innovation-based job growth," it said in a letter to Congress.
After today's hearing IA issued a statement that it supports the current draft but still wants some changes in a final bill. "In particular, we believe the provisions relating to business method patents, extended deadlines for inter partes re-exam, joinder, and prior user rights are harmful and should be removed," said Brian Pomper, executive director of the group in a press statement.
The markup hearing initially was bogged down in parliamentary issues related to the complexity of the number of amendments and controversies over them.
"It is impossible for any one group to get everything they want, [but] this bill represents a fair compromise," said Rep. Smith in an opening comment.
"The last major patent reform was nearly 60 years ago, [and] since then, American inventors have helped put a man on the moon, developed cell phones and created the Internet," Smith said. "But we cannot protect the technologies of today with the tools of the past," he added.
"Members on the large business side, particularly in the tech community, still want more [but] I think we’ve been fair to tech industries and fair to all sides," Smith said.
The U.S. Senate passed a draft patent reform bill earlier this year. The House must pass its own bill and the two must be reconciled before a final bill can be passed into law.