In 2003, the Federal Trade Commission issued a report stating that to promote innovation, a proper balance of competition, patent law, and policy must be achieved. Consumers and innovators win when patents and competition policy are aligned.
At the 2011 Intellectual Property Business Congress (IPBC) currently taking place in San Francisco, now retired Chief Judge Paul Michel offered his thoughts on the long debated product of that (2003) FTC report relative to the “America Invents Act” (House Bill 1249) scheduled for debate this week.
While Mr. Michel pointed to numerous flaws in HB 1249, he said, “90 percent of the problem (in patent reform) is lack of resources at the USPTO, where delays are job killers and innovation killers.”
Traditionally, Michel said, Congress focused its patent reform efforts on (patent) litigation issues, ignoring the PTO’s delay and backlog problems where today approximately 1.2 million patents await examination and patent issuances take 3-4 years. Such crippling delays adversely affect patent value.
There remain some problematic aspects to HR 1249, Judge Michel says, particularly in that Section 18 that does not offer relief to some key business uncertainty issues regarding business method patents, shift to first to file, shrinking of the “American grace period,” tax strategies, post grant review procedures, etc. But a particular sticking point, according to Michel and the Intellectual Property Owners Association in HR 1249 is the funding issue. Over the past 20 years USPTO has collected but not been able to use nearly $900 million in user fees, i.e., fee diversion , which the and Michel refer to as a "a tax on innovation.” The Senate version of the Bill allows USPTO to self- fund and spend what it takes in, and it was key to passage; a compromise worked out in House Committee allows USPTO to keep up to the appropriations level. Whatever is worked out on the House floor this week, the funding issue will have to be hammered out for us to see the new law.