Republicans propose compromise to save patent reform

House Republicans are working furiously to sell a compromise on patent reform legislation as a late dispute on U.S. Patent and Trademark Office fees threatens to scuttle the six-year effort.

The America Invents Act, based on legislation that passed the Senate overwhelmingly earlier this year, appeared likely to be signed into law this summer after a coalition of supporters, including the technology and entertainment industries, lined up behind the bill.

The leadership of the House Appropriations and Budget committees, however, recently voiced opposition to a key provision that would let the PTO set and keep the patent application fees it collects in hopes of using the resources to address a growing backlog of more than 1 million patents.

Critics argue the provision would make PTO financially independent and essentially free from congressional oversight. In hopes of mollifying those concerns, House Judiciary Chairman Lamar Smith (R-Texas) offered a compromise that would create a fund for fees collected by the PTO.

The money in the fund would be reserved for use by the Patent Office for processing applications, but Congress would maintain oversight of the budget process. The House Rules Committee is set to discuss the bill late Tuesday.

"This maintains congressional oversight, while making sure that fees collected by the PTO can no longer be diverted to other federal programs by appropriators," Smith said in a statement.

“Since 1992, nearly $1 billion has been diverted from the PTO. The average wait time for patent approval is three years. Inadequate funding of the PTO hurts America’s innovators and job creators."

It remains unclear whether supporters of the bill in the business community will back the compromise. Even if the amended bill passes the House, the changes would have to be reconciled with the Senate bill, which allows the Patent Office to keep its fees. Supporters including Smith argue the PTO badly needs the additional resources.

“Since 1992, nearly $1 billion has been diverted from the PTO. The average wait time for patent approval is three years," Smith said. "Inadequate funding of the PTO hurts America’s innovators and job creators."

The bill has other opponents who argue the switch to a first-to-file patent system will lead to a migration of patents towards firms and organizations with the resources to constantly file for patents.

Groups representing small inventors and some Democrats, includuing House Judiciary ranking member John Conyers (D-Mich.), are among those opposing the bill on grounds other than the fee diversion dispute.

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