In the midst of new objections from some Republican members of Congress to a patent reform bill recently approved by the House Judiciary Committee, ACS has released a new Issue Brief on the measure at issue in the bill, “Short Term Pain for Long Term Gain: Why Congress Should Stop Diverting U.S. Patent and Trademark Office User Fees.”
In the Issue Brief, A
merican Continental Group, Inc. Partner Marla Page Grossman explains the importance of ending fee diversion, a practice in which funds paid by patent and trademark applicants are diverted to other programs and agencies “entirely unrelated to the [U.S. Patent and Trademark Office],” significantly slowing down the approval process and thwarting innovation.
A provision to end fee diversion is contained in the America Invents Act, which was passed by the Senate and approved by the House Judiciary Committee with broad bipartisan support. But the provision encountered new opposition just last week, when House Appropriations Chairman Harold Rogers and House Budget Chairman Paul Ryan sent a letter to House Judiciary Chairman Lamar Smith opposing the fee diversion provision because it would hand “the Congressional power of the purse” to the Obama administration.
In the days that followed, “[i]t was Republican leaders who fired back,” Grossman explains, with Rep. Lamar Smith responding that “contrary to putting the USPTO on auto-pilot, H.R. 1249 would actually promote accountability and transparency, creating more channels for oversight than currently exist,” and Sen. Tom Coburn asserting, “[w]e cannot have true patent reform without ending fee diversion and providing the PTO with a permanent, consistent source of funding” and that the “power of the purse does not provide Congress authority of non-taxpayer funds.”
The Chamber of Commerce also expressed public support for the fee diversion provision this week, and more than 150 companies, schools and groups, including GE and Apple, submitted a letter reiterating the necessity of this provision.
In her Issue Brief, Grossman explains the importance of encouraging innovation through the patent system to spur needed economic growth, demonstrates the inefficiency and unfairness that comes from diverting patent fees paid by users, and presents a number of ways in which the USPTO could maintain control of their own fees, the best of which “is incorporated in this Congress‘s patent reform bills.”
She concludes:
USPTO fee diversion must stop, and must be stopped now, to ensure that the USPTO can engage in the stable, long-term planning necessary for the issuance of timely, high-quality patents. The best legislative solutions will necessitate congressional appropriators prioritizing U.S. innovation, jobs and the economy over “inside the Beltway” politics. But good policies often come with painful politics. If Congress can handle a little pain in the short term, the nation will likely be rewarded with a more efficient USPTO and national prosperity over the long term.
Read Grossman’s Issue Brief here and read a previous guest post by Grossman on this issue here.
Venture Capitalist Fred Wilson at AVC citing Lodsys’ legal threats to independent developers says “
The Obama Administration’s emphasis on stimulating the U.S. economy and creating U.S. jobs, as well as the increasing recognition from Congress that a strong patent system is critical to an innovation-friendly government, has made it more important than ever for Congress to pass a permanent legislative solution to the damaging practice of taxing innovation by diverting user fees away from the U.S. Patent and Trademark Office (USPTO). Such a solution is part of the patent reform bill recently passed in the Senate, 
, Inc. rejected a proposed settlement, which would have given Google the right to sell electronic copies of out-of-print books. The opinion is short, readable, and filled with eloquent quotations from objections, many filed pro se. It moves quickly through more issues than I could discuss in a blog post, so here I'll focus on its central holding, that this kind of "forward-looking business arrangement" is simply beyond the court's power to approve under Rule 23.