Patent reform legislation appears to be held up over differences between the House and Senate versions of the bill.

"We're intransigent now," Rep. John Conyers Jr., chair of the House Judiciary Committee, said during the committee's May 5 hearing on the U.S. Patent and Trademark Office. "We appear to be stuck."

Conyers, D-Mich., added that he did not know what was causing the legislation to be held up. The Senate Judiciary Committee issued a revised draft version of the legislation in March (¹ Also see "Patent Reform Bill In Senate Could Reduce "Inequitable Conduct" Litigation" - Pink Sheet, 1 March, 2010.). The original version of the bill was reported out of committee in April 2009.

The House hearing primarily focused on how Congress could help the patent office get adequate funding to reduce its backlog of more than 750,000 patent applications and cut patent pendency.

In case the logjam over the patent reform legislation does not break, Conyers asked PTO Director David Kappos if he would support a stand-alone bill that gave the agency the authority to set fees and ended diversion of fees from the office to other government programs. Kappos responded that he was in favor of pressing forward with comprehensive patent reform.

PTO's Kappos Pushing For Final Patent Bill

Rep. Zoe Lofgren, D-Calif., pressed Kappos on whether he would support a separate bill if their diligent efforts for comprehensive legislation failed.

"My view is we can get this legislation done," Kappos said.

"But if you're wrong ... you're saying no thanks to fee-authority?" Lofgren asked. Kappos repeated that he would like to work with both houses of Congress to get the legislation and it would be premature for him to make a comment on getting authority to set fees separate from that measure.

"That is stunningly disappointing that you'd rather not have the money," Lofgren replied.

Robert Budens, president of the Patent Office Professional Association, which represents more than 6,000 examiners, criticized several aspects of the patent reform bill. He said he believed the post-grant review provision for reevaluating patents after they are issued would siphon money away from initial examinations.

Post-grant review "will only serve to provide one more expensive and time-consuming process for a party to use to protract litigation," he said.

Lofgren commented that as Congress has tried to implement patent reform the courts have moved forward. She asked Kappos if the U.S. Supreme Court's forthcoming ruling in the Bilski case will make adjudication of patents simpler and relieve the burden on the patent office. A PTO officially recently announced that the office has set up a task force to implement the decision, which is to define what is patentable subject matter (² Also see "PTO Creates Task Force To Respond To Upcoming Bilski Decision" - Pink Sheet, 23 April, 2010.).

"It's quite possible that it could be very helpful to clarifying standards for the first time in many years, providing direction to the USPTO and the entire court system underneath the Supreme Court," Kappos replied. "That will enable us to put new strong clear guidelines in place for our examiners to do a really solid job."

Rep. Darrell Issa, R-Calif., raised the issue of false patent marking suits. In the past five months, hundreds of suits have been filed against companies because a patent on their product did not apply to the product or had expired. The revised Senate patent reform bill has a provision that would limit suits to those who suffer injury from false marking. Issa has introduced a stand-alone bill with identical language to the patent bill.

Issa noted that the Congressional Budget Office has said these cases could bring in $4 million to $12 million in revenue to the federal government and asked Kappos if the cost to the court to deal with these suits would be higher than that.

Kappos said it would be somewhere in that range and would not include the cost of defending the litigation. "A cottage industry has rapidly developed around false marking," he said. The pharmaceutical industry has been embroiled in these cases. From December to mid-March, 11 pharma companies had been sued for false patent marking, including Amgen and Merck (³ Also see "New Qui Tam Worry: Lawsuits Over False Patent Markings" - Pink Sheet, 22 March, 2010.).

- Brenda Sandburg ( ⁴ b.sandburg@elsevier.com )

Patent Reform Bill Is Bogged Down, Rep. Conyers Reports At Hearing

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