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Patent-Fee Compromise Doesn’t Ensure Passage Patent-Fee Compromise Doesn’t Ensure Passage

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Patent-Fee Compromise Doesn’t Ensure Passage


Ranking House Judiciary Committee member Rep. Lamar Smith has a compromise on patent reform(Mark Wilson/Getty Images News)

A compromise over sweeping patent-reform legislation has cleared the way for floor debate in the House on Wednesday, but the proposed deal was met with skepticism from key senators who helped draft and pass a similar bill.

The America Invents Act has been held up because of a dispute over so-called fee diversion, in which Congress takes fees collected by the Patent and Trademark Office and allocates the money for unrelated programs.


The issue is important because industry groups have been demanding for years that the PTO be better funded so that products can be granted protection more quickly. The diversion of funds has only added to the PTO’s infamous backlog.

House Judiciary Chairman Lamar Smith, R-Texas, the bill’s sponsor, said the compromise creates a fund for excess fees from which Congress could appropriate money back to the Patent and Trademark Office. It may be acceptable to conservative appropriators because it allows Congress to control the money, but lawmakers can’t just use it for anything—it must go to the Patent Office. However, some critics dispute how well the plan would actually work.

Smith says the proposed changes would still preserve all PTO fees for the agency.


“After six years of working towards patent reform, we are near the finish line,” Smith said in a statement. He said the bill “maintains congressional oversight, while making sure that fees collected by the PTO can no longer be diverted to other federal programs by appropriators.”

If the House passes the bill, differences will need to be worked out with the Senate, which passed its version of patent legislation, 95-5, in March.

The White House released an official Statement of Administration Policy in support of the bill on Tuesday, but expressed reservations about the revised fee diversion language.

House Appropriations Chairman Harold Rogers, R-Ky., and Budget Chairman Paul Ryan, R-Wis., said the bill’s original language, which would have forbidden fee diversion altogether, was potentially unconstitutional and could undermine Congress’s power of the purse.


House Minority Whip Steny Hoyer, D-Md., expressed optimism that the compromise would gather support. “As a former appropriator I am appreciative of the concept assuring that there is oversight of the appropriations and expenditures,” Hoyer told reporters.

House Speaker John Boehner, R-Ohio, and Majority Leader Eric Cantor, R-Va., joined some major tech companies, including IBM, in supporting Smith’s proposal.

But senators, whose version of patent reform would completely end fee diversion, were not enthusiastic.

Sen. Tom Coburn, R-Okla., who proposed language abolishing fee diversion in the Senate, told National Journal Daily that he is “not excited” about approving the House version of the legislation without more debate.

Smith’s counterpart, Senate Judiciary Chairman Patrick Leahy, D-Vt., who sponsored his chamber’s bill, issued a statement on Tuesday that although the House compromise is a “step in the right direction” for solving the fee-diversion problem, he is “disappointed” that the House bill won’t include the stronger Senate provision. Leahy signaled, however, that he wouldn’t stand in the way of the compromise language when working with Smith to send a final bill to President Obama for approval.

Some industry groups also expressed skepticism over the compromise, calling it just another chance for lawmakers to say one thing and do something else.

Brian Pomper, executive director of Innovation Alliance, which criticized the changes before they were publicized, said there is little to prevent future lawmakers from deciding to raid the PTO funds once again.

“While appropriators have promised not to divert the fees [PTO] collects, current and future budget pressures will only increase, and future appropriators may not feel as constrained from diverting [the] fees to other uses. This language does nothing to prevent that from happening,” Pomper said.



Ben Terris contributed contributed to this article.

This article appears in the June 22, 2011 edition of NJ Daily.

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