IEEE-USA, others challenge patent reform

SAN JOSE, Calif. – A handful of groups fired off letters opposing a draft patent reform bill the U.S. Senate will debate starting Monday (Feb. 28). Their common theme: the legislation will disadvantage small and startup companies.

The IEEE-USA, the National Small Business Association (NSBA) and a group including seven other organizations said the draft bill will give large corporations a leg up in winning patents.

The bill, S.23, includes a number of complex provisions. The letters specifically called out a handful of them.

Their top concern was the shift from a first-to-invent to a first-to-file system. The move aims to harmonize the U.S. patent system with others around the world.

"Under a first-to-file system, U.S. inventors will need to file nearly twice as many applications as they file today," said Bruce E. Hayden, chairman of the intellectual property committee of the IEEE-USA.

The radical transformation to a first-to-file invention priority system effectively guts the American grace period [to file for a patent]," said Todd O. McCracken, president of NSBA in his letter.

Hayden of IEEE-USA also argued the first-to-file provision will weaken the existing grace period for filing a patent application.

"The grace period in the current law gives companies a year to raise capital, to assemble strategic partners, and to field test before filing a patent application," Hayden said. "In contrast, the proposed weak grace period of S.23 forces early, often multiple, filings, before good information is available," he added.

A separate letter echoed their concerns and was signed by groups including the American Innovators for Patent Reform, the National Congress of Inventor Organizations, the Professional Inventors Alliance USA and the U.S. Business and Industry Council.

Instead of changing the patent system, the groups called for more funding for the U.S. patent office, weighed down by a backlog of nearly 800,000 applications. The agency currently has to give the federal government's general fund any fees it generates beyond its planned annual budget.

"Rather than pursuing questionable reforms in S.23, we urge you to turn instead to a bill that would command immediate and universal support—a bill that adequately funds the PTO and allows the agency to retain the fees that it collects," said Hayden.

Senator Patrick Leahy (D., Vt.) challenged the groups' assertions in one of a regular stream of emails from his office promoting the draft bill. Leahy has been one of the leading champions of efforts over several years to pass a patent reform bill.

Leahy said the bill "will require the PTO to provide a 50 percent reduction in fees for small business and will create a new micro-entity designation for truly small and independent inventors [who] will receive a 75 percent reduction in fees," he said.

He also noted the bill would eliminate so-called interference hearings between competing inventors. "This costly proceeding is almost always won by larger corporations," he said.

Leahy listed dozens of groups and companies supporting the draft bill including the American Intellectual Property Law Association, IBM, General Electric, Honeywell, Motorola and SanDisk.