From CongressDaily's PM edition on Wednesday::

Senate Minority Whip Jon Kyl today laid down a marker in the battle to overhaul the patent system by introducing a bill that departs substantially from the one sponsored by Judiciary Chairman Patrick Leahy and Sen. Orrin Hatch, R-Utah. The Kyl bill resulted from months of meetings with critics of the Leahy language.

It would boost Patent and Trademark Office authority on a number of fronts but does not grant the agency its biggest wish: mandatory applicant quality controls. Rather than requiring each application to be accompanied by a search report and analysis relevant to patentability, the bill makes that process voluntary and offers incentives for compliance.

Kyl's measure changes the "inequitable conduct" doctrine, which would require patent applicants to be more forthcoming to the PTO or face hefty fines. But unlike previous legislation, his bill would address allegations of misconduct administratively rather than through the courts.

The bill also would make permanent PTO's authority over money earned from patent and trademark applications. In recent years, appropriators have let the agency keep the funds instead of diverting them to unrelated projects. Sen. Tom Coburn, R-Okla., and others believe permanence would lead to more certainty in longer-term budgeting at the PTO.

Read the full story here and look for more in Thursday's AM edition.