The U.S. Patent and Trademark Office would gain power over the revenue it collects under an amendment the Senate approved Tuesday, a step seen as critical to reducing the lengthy backlog in processing patent applications.
The Senate measure would end the practice of diverting fees paid to the patent office to other government programs. It came as an amendment to legislation that would carry out the first major overhaul of the patent system in almost 60 years.
Sen. Tom Coburn, R-Okla., who promoted the amendment, said that last year some $53 million in application and other fees paid to the patent office was spent elsewhere.
The provision, which also allows the office to set its own fees, aims to rectify a backlog: 700,000 applications are awaiting initial action, and it takes three years to get a patent request granted.
The overall bill, which is expected to pass this week, would also carry out fundamental changes in how patents are processed. Instead of the current system where patents are given to the first to invent, the United States would adapt the system used by all other industrialized nations, where they go to the first to file.
The White House, which supports the bill, said the first-to-file system would simplify the process of acquiring patent rights, reduce legal costs, improve fairness and support U.S. innovators.
The switch has been opposed by independent inventors and smaller companies concerned that they wouldn't have the resources to compete with corporate competitors, but Patent and Trade Office Director David Kappos told reporters Tuesday that the transition comes with increased legal certainty to assure that smaller businesses would not be disadvantaged.
"First-inventor-to-file is a win for all American innovators, of all sizes and all industries," Kappos said.
Kappos also welcomed provisions giving his office more control over fees, saying it would allow the office to hire more qualified examiners and upgrade its technology, resulting in the issuing of higher-quality patents in a faster period of time.
Sen. Patrick Leahy, D-Vt., chairman of the Judiciary Committee and a lead sponsor of the legislation, said it was "crazy that it takes two years for an inventor to get an initial ruling on his or her patent application and another year or more to receive a patent."
There are 700,000 applications waiting for action and another 500,000 in the pipeline, and "among them could be the next medical miracle, the next energy breakthrough, the next leap in computing ability, or the next killer app," Leahy said.
After clearing the Senate, the bill would go to the House, where Judiciary Committee Chairman Lamar Smith, R-Texas, is working on similar legislation.
Congress has been trying for years to overhaul patent law that dates back to a 1952 act but has been thwarted by divisions among the many interested parties, including major corporations, high tech companies, pharmaceuticals and independent inventors.
The Senate amendment that passed Tuesday on a 97-2 vote also removes several provisions concerning awarding damages and determining court venues that had raised objections from the high-tech community.
The Coalition for Patent Fairness, which represents such high-tech companies as Apple, Google and Intel, applauded the Senate vote, saying that as a result of the amendment "the bill is moving in a promising direction." It said the high-tech community still supports additional changes and will be working with senators as the bill goes forward.
The overall bill also sets new standards for third parties to challenge patents that have not yet been approved and streamlines the system for challenging the validity of existing patents so as to cut down on litigation costs.