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CBO: 'Negligible' budget effect of Senate patent bill

The Senate's version of patent litigation reform is expected to have a "negligible" effect on the federal budget, according to a Congressional Budget Office (CBO) report released Friday. 

The budget scorekeeper found it would cost about $70 million for the U.S. Patent and Trademark Office (PTO) to implement portions of the law over the next five years. Another $3 million would come from administrative costs to alter judicial procedures. 

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But most of that spending would be offset by the PTO raising fees on patent applicants to cover the cost. The office largely operates through patent fees. 

The Federal Trade Commission could see a slight boost in revenue, because the bill authorizes the consumer protection agency to go after false or misleading patent demand letters claiming infringement. But the CBO expects the revenue from fines to be insignificant "because of the small number of cases that the agency probably would pursue."

Both chambers are working on competing bills to stop "patent trolls" who are accused of filing frivolous patent infringement lawsuits then strong arming defendants to settle. The legislation — a priority for the tech industry — is aimed at cutting off some of the legal tactics exploited by trolls. 

The House and the Senate bill contain many of the same reforms. But there are key differences in the Senate bill, which have appeased some industries who believe broad reform could harm inventors. The timeline for movement is unclear in both chambers. 

Because of a number of changes to procedures at the PTO included in the Senate bill, it would cost about twice as much to implement than the House bill. Those numbers, $14 million and $7 million per year respectively, are still insignificant by comparison. And both would be offset at the PTO by an increase in fees. 

The CBO concluded that the Senate bill — just like its analysis of the House bill — "would affect the decisions of inventors to initiative lawsuits for patent infringement."