Tuesday, October 6, 2009

PTO Backs Leahy Bill, Fee-Setting Ability

Patent and Trademark Office Director David Kappos reiterated on a call with reporters Tuesday the Obama administration's support of a Senate bill that would make big changes to the U.S. patent system. Kappos said that while no industry stakeholders have gotten exactly what they want out of the measure, "it moves us forward [and] that is better than the status quo." Major high-tech and pharmaceutical companies spent months divided over the bill's handling of how damages are assessed in infringement lawsuits and recent debate has focused on administrative procedures for challenging granted patents.

Commerce Secretary Gary Locke wrote to Senate Judiciary Chairman Patrick Leahy on Monday saying the bill "incorporates the essential elements of patent reform," but lawmakers should go further to address related issues as it heads toward the floor. Leahy, whose panel approved the measure in April, said he wants to work with Majority Leader Harry Reid to tee the bill up for a vote before the end of the year. Read more in CongressDaily here (subscription required).

On the same teleconference, Commerce Department General Counsel Cameron Kerry, who is the younger brother of Sen. John Kerry, D-Mass., told reporters that provisions of the Leahy bill are "important to jump-starting the economy again and getting innovation going again." He said the bill is "long overdue" and, if passed, would help the PTO "make the American patent system function the way that it ought to."

The PTO wants the ability to set fees and recover costs, which Locke and Kappos have said would better address the agency's operational funding needs in a time of economic uncertainty. The agency will begin fiscal year 2010 with an estimated $200 million budget shortfall, which will dramatically limit patent processing, hiring and IT system upgrades, Kappos said. "We would very much benefit from having some short term financial help... in the form of some kind of interim fee supplement," he said.

One possibility lawmakers are considering would be a 15 percent surcharge. Imposing such a fee -- applicable for one or two years -- should not lead to an extreme change in applicant behavior, Kappos said, acknowledging that the proposal is still "a significant ask." He also said he wants a four year phase-in for implementing post-grant review procedures because of the numerous internal changes at the PTO that would be required by the Senate bill. That approach would let the agency "walk before we run."