CQ TODAY ONLINE NEWS
June 22, 2011 – 4:26 p.m.

Opposition to Patent Bill Spreads

Opposition to Patent Bill Spreads

Under the arrangement, the patent office would continue to receive an annual appropriation, but excess revenue raised from user fees paid by patent applicants would be set aside in a separate account. Those funds would be allocated to the patent office in future appropriations.

Rogers offered assurances that those funds would go only to the patent office. But critics say there is nothing to prevent the money from being diverted in the future for other purposes.

Unless GOP leaders drop the new fee provisions, which is unlikely, they will have to either persuade enough Democrats to stay with them to make up a bipartisan majority or line up more support within the Republican caucus for the bill to pass.

Smith was hopeful Wednesday that the House would pass the bill.

“With any piece of legislation of this size and scope, it is difficult to make every stakeholder 100 percent happy 100 percent of the time,” he said. “But we all agree that patent reform is critical to growing our economy and generating jobs.”

Problem With Other Provisions

Even before the rebellion over the fee language, Smith and his allies were grappling with bipartisan opposition to several major provisions, including language that would shift the basis for awarding patents from “first to invent” to “first to file.” Opponents argue that the shift is unconstitutional and would harm independent inventors.

Some lawmakers are opposed to language that would create a new process for reviewing the validity of financial-services-related “business method” patents. Opponents see that as a boon to Wall Street banks fighting patent infringement lawsuits. Watt said that he negotiated a compromise on that issue with opponents at the request of Republicans, but that the GOP did not include the compromise language in Smith’s manager’s amendment.

“My reputation as an honest broker has been jeopardized here,” Watt said.

Some opponents of the bill also argued that the bill violates a House budget rule that bars legislation mandating new government spending unless it includes offsetting spending cuts. This put GOP leaders in the awkward position of waiving points of order against the bill under the “cut-as-you-go” requirement in the rule for floor debate, which was adopted 239-186 on Wednesday.

The waiver was needed for technical reasons, Republicans argued, because the underlying bill would have increased mandatory spending without offsetting spending cuts — in violation of cut-as-you-go. By restoring the patent office fees to control of appropriators, they said, the amendment will put the measure back in compliance with cut-as-you-go.

But Democratic critics said the amended bill would end up increasing the federal budget deficit in comparison with the underlying bill.

Citing the Congressional Budget Office, Democratic critics said the version of the bill reported out of the Judiciary Committee would have reduced direct spending over the 2011-2021 period by $725 million and revenues by $8 million, for a net deficit reduction of $717 million.

Opposition to Patent Bill Spreads

The amendment reclassifying the fees as discretionary, however, would eliminate $712 million in savings scored to the original bill, according to the analysis. That means the amended version would increase the deficit compared with the bill reported out of committee.

The House began debate on the bill Wednesday. But votes were pushed off to give Smith time to shore up support. That also gives opponents more time to build a majority of their own.

“There are more and more people getting disillusioned,” said Michigan Democrat John Conyers Jr., ranking member on the Judiciary Committee and an opponent of the bill.