By Donald Zuhn —

In similar letters sent earlier today to the Chairman and Ranking Member of the House Judiciary Committee, Secretary of Commerce Gary Locke (at right) outlined the Department of Commerce's position on the House version of the America Invents Act (H.R. 1249), which was reported out of Committee almost seven weeks ago (see "House Judiciary Committee Approves H.R. 1249").  Secretary Locke began each letter by noting that "passage of needed reforms to our patent laws has been a high priority for me during my time as Secretary of Commerce because of its importance to America's competitiveness and our economic growth."

With the Republican-controlled House focused on cost cutting and deficit reduction, the Secretary reminded the letters' recipients, Chairman Lamar Smith (R-TX) and Rep. John Conyers, Jr. (D-MI), that "[e]nactment of a balanced bill is an important part of the Administration's goal of 'out-innovating' our economic competitors and winning the future — and it can be done with no cost to taxpayers and no addition to the deficit."  While acknowledging that the Senate (S. 23) and House versions of the bills are not identical, Secretary Locke stated that the Administration was "confident that the variations between the two can be resolved and that enactment of a bipartisan consensus bill is within reach."  The Secretary spent the remainder of each letter outlining the Administration's views on five "key provisions" of the House bill, which he said were "important to our goals of an appropriately funded and well-functioning USPTO and successful passage of a balanced bill."

Secretary Locke started by tackling the first-inventor-to-file provision, declaring that the Administration "strongly support[s] the proposed transition of the United States to a first-inventor-to[-]file system."  Arguing that this transition is "an essential feature of any final bill that will simplify the process of acquiring rights while protecting innovators," the Secretary pointed out that "[t]he first-inventor-to-file provision is consistent with the practices of our economic competitors, and would benefit U.S. businesses by providing a more transparent and cost-effective process that puts them on a level playing field with the rest of the world."  With regard to the grace period provided by the House bill — which has been a topic of debate in patent circles since the bill was reported out of Committee — Secretary Locke contended that H.R. 1249 "provides a more transparent and certain grace period (a key feature of U.S. law) and a definite filing date that enables inventors to promote, fund and market their technology while making them less vulnerable to costly patent challenges, which disadvantage small entity inventors."  According to the Secretary, these changes "will benefit all stakeholders, both small and large, regardless of the field of innovation."

Moving to the USPTO fee setting and funding provisions, Secretary Locke stated that the fee-setting authority provided in the bill would allow the USPTO to "ensure full cost recovery at no expense to America's taxpayers," as well as "process applications more quickly and produce higher-quality patents that are less likely to be subject to a court challenge."  Pointing to the "deliberative and transparent [fee] review process" set forth in the bill, the Secretary suggested that the bill contained "a comprehensive and appropriate set of mechanisms to ensure all fee changes are well-considered and well-calibrated."

Addressing the bill's post-grant review provisions, the Secretary stated that the Administration "supports establishing a new post-grant review proceeding and retooling the existing post-grant inter partes reexamination procedure," arguing that "[t]hese proceedings will serve to minimize costs and increase certainty by offering efficient and timely alternatives to litigation as a means of reviewing questions of patent validity," and "provide a check on patent examination, ultimately resulting in higher quality patents."  As for the Office's ability to handle the burden of these proceedings, Secretary Locke indicated that "[v]arious safeguards and flexibilities are included in the proposed proceedings to enable USPTO to effectively implement and manage them."

With regard to pre-issuance submissions, the Secretary contended that "the opportunity for third parties to submit potentially relevant prior art to the USPTO after publication of an application and before examination" will "increase the quality of patents."

The Secretary closed his letter by discussing the expansion in H.R. 1249 of the prior user defense to all areas of technology, stating that "[a]s a matter of fairness, we believe that innovators who independently create and commercialize technology should not be penalized for, or deprived of, their investment."  Taking note of the concerns raised by "some in the university community," Secretary Locke offered "to work with the Committee on any proposed revisions" to the provision.

In a press release concerning Secretary Locke's letter to House leadership, the U.S. Patent and Trademark Office indicated that the America Invents Act "enhances the U.S. patent system by increasing certainty of patent rights through implementation of a first-inventor-to-file standard for patent approval while also reducing the need for cost-prohibitive litigation, which all too often ties up new ideas in court, stifling innovation and holding back job creation," adding that "[u]ltimately, the proposed legislation will provide the most meaningful reforms to the U.S. patent system in 60 years."  The release also stated that the legislation will create an "updated patent infrastructure [that] will level the playing field for small enterprises seeking to participate in the global marketplace — reducing expensive and time-consuming litigation, simplifying the process of acquiring rights and creating a system that mirrors others around the world, all while enhancing American competitiveness and spurring economic growth."

For additional information regarding this and other related topics, please see:

• "Patent Reform News Briefs," May 11, 2011
• "Boundy Issues Call to Arms on America Invents Act," April 21, 2011
• "More Reaction to H.R. 1249," April 18, 2011
• "House Judiciary Committee Approves H.R. 1249," April 14, 2011
• "Reaction to Manager's Amendment to House Patent Reform Bill," April 13, 2011
• "House Judiciary Chairman Releases Manager's Amendment to H.R. 1249," April 12, 2011
• "Reaction to House Patent Reform Bill," March 31, 2011
• "House Introduces Its Version of 'America Invents Act,'" March 30, 2011
• "Patent Reform Discussion Moves to House," March 29, 2011
• "The Disappearance of Deceptive Intent in S. 23," March 23, 2011
• "'Reform' at the U.S. Patent and Trademark Office," March 22, 2011
• "Few 'Reform' Provisions Remain in S. 23 Relating to the Judiciary," Marech 21, 2011
• "Additional Opportunities for Pre- and Post-grant Review, and Brand New Patent Trial and Appeal Board in S. 23," March 17, 2011
• "Post-grant Review Provisions of S. 23," March 16, 2011
• "Inventor's Interests, If Not Rights, Limited by S. 23," March 15, 2011
• "What Are the Provisions of the Proposed "First-Inventor-to-File" System in S. 23?" March 14, 2011
• "Obama Administration Supports S. 23," March 9, 2011
• "Reaction to Senate Passage of S. 23," March 8, 2011
• "Senate Passes S. 23," March 8, 2011