All sides agree letting the patent office set and keep all its fees is an improvement, given the agency has a backlog of more than 700,000 applications and takes on average three years to grant a patent.
"The key to the reform bill is ending fee diversion to reduce wait times and improve quality of patents being issued," said Mike Mclean, a vice president at UBM TechInsights, an IP consulting and analysis group. "The compromise on that issue in the House bill is a step in the right direction, but the Senate bill is much stronger in that regard and as a result would be the preferred option," he said.
The bill also creates a new post-grant review process at the patent office, aiming to weed out bad patents early and reduce a backlog of court cases challenging the validity of patents.
The new review process "allows expert statements, deposition and discovery so it will be a much more adversarial proceeding," said Baum, noting the process has successfully reduced court challenges in Europe.
The new patent office review could cost "a couple hundred thousand dollars," more than twice as much as today's post-grant reviews, Baum said. But that's still well below the alternative of a court challenges than can cost an order of magnitude more.
"This gives small companies an option to have a more meaningful challenge, and big companies will use this extensively against one another, too," he said.
The House bill also lets a company already using a technology have a prior use right to it, even after a patent application is granted to another company. IBM and Intel welcomed the provision, though Intel said the language could be clearer for applying it to products as well as processes.
"We spend a very long time developing our [chip] manufacturing processes, and we want to keep them secret and not share them with competitors," said Simon. "We do patent a lot of it, and a lot of patents have issued on our tri-gate transistors for instance, but there's a lot of stuff we don’t patent but keep it secret," he said.
The bill also limits the ability to bring a single suit against many unrelated companies for infringing a patent, a provision Intel and other large companies praised. "These cases become huge unworkable messes," said Simon.
The House bill also ends the practice of suing companies for marking their products with patents that have expired. "Patent attorneys filed hundreds of these suits, and it's driving big companies nuts—it's an abuse of the system," said Baum.