On June 23, the House passed patent reform legislation that may significantly change the patent system in the United States. By a vote of 304-117, the House passed the America Invents Act (H.R. 2149). In March, the Senate passed its version of the bill. (S. 23) Differences between the House and the Senate versions now need to be worked out before a final version can be sent to the White House. President Obama has expressed support for the bill.
Assuming the legislation is ultimately enacted close to its present form, it will change the patent system in the United States from “first to invent” to “first inventor to file.” Currently, an inventor that can prove he or she was the first person to conceive of an invention and reduce it to practice is entitled to a patent, even if another person files an application for a patent to that invention first. Disputes about priority of invention are now typically resolved by an interference proceeding in the Patent Office. The legislation would do away with interference proceeding. Instead, the first party to get its application on file is the one entitled to the invention regardless who was the first to invent. This change harmonizes patent practice in the U.S. with most other countries.
Among other things the legislation also adds a post-grant review procedure, modifies judicial review of inter partes reexaminations, and adds a derivation proceeding where a party can challenge an earlier-filed patent application on the basis that the earlier-filed invention was derived from the party’s own work.
The House and Senate versions of the bill are very similar. Perhaps the most significant issue to be worked out in conference is how fees collected by the PTO will be distributed. Right now PTO fees go to the public fisc and the PTO’s budget is separately appropriated by Congress. By allowing the PTO to use the fees it collects, the Office will have more money available to hire examiners and speed the examination process. Both versions of the bill provide a fund to hold the fees collected by the PTO for use in paying PTO operations expenses. In the House version, in language added by a Manager’s Amendment, Congress must appropriate moneys from this fund to the PTO. Under the Senate version, the PTO can use collected fees without prior appropriation but subject to congressional reporting and budgeting requirements.