House rejects key amendments to patent reform bill

“If the amendment is not adopted, the issue will be litigated all the way up to the Supreme Court,” he said.

Despite these arguments, and separate debate on the constitutionality of the bill on Wednesday night, the House voted against his amendment 129-295.

In a related vote, the House rejected an amendment from House Judiciary Committee Ranking Member John Conyers (D-Mich.) that would have delayed the move to a first-inventor-to-file system until the President finds that other countries have in place a one-year grace period that allows inventors to disclose inventions without losing their right to file for patents. That amendment failed in a 105-316 vote.

Another controversial element of the bill is Section 18, which several groups have said could allow banks to escape current business method patents. Several companies that hold these patents, related to check scanning processes and other technology, argue that financial services companies are hoping to use legislation to continue their so far unsuccessful efforts to litigate away these patents.

In contrast, the financial services industry supports the language as something that will allow the government to vacate “low quality” patents, which they define as patents that should never have been granted. In particular, language in the bill would allow patents to be challenged based on evidence of prior use or sale, which are factors that cannot be considered now under current rules.

Rep. Aaron Schock (R-Ill.) argued that Section 18 amounts to an earmark that favors financial services companies. He was joined by Rep. Dan Lungren (R-Calif.), who argued that Section 18 would allow a re-examination of business method patents that have survived court review, since the Constitution says court decisions can only be reviewed by higher courts.

“This is an obvious, blatant violation of the Constitution,” Lungren said.

House Judiciary Committee Chairman Lamar Smith (R-Texas) said he opposes the amendment because the bill would only create a pilot program for reviewing what might be low-quality business method patents. He was joined by Rep. Joe Crowley (D-NY), who said many of these are “nuisance patents” that have been used to sue the Red Cross and other organizations.

Schock’s amendment to strike Section 18 from the bill was defeated in a 158-262 vote.

Members also defeated an amendment from Rep. Don Manzullo (R-Ill.) that would have stripped language in the bill that allows the U.S. Patent and Trademark Office (USPTO) to set patent application fees. Manzullo argued that USPTO has said it would like to increase fees, which he said would hurt small businesses, and said Congress should set those fees.

But opponents of Manzullo’s language said USPTO offers discounts to small businesses, and the amendment was defeated 92-329.

Members did approve one amendment by recorded vote, after agreeing to retake the vote over Democratic objections. The vote was on language from Rep. John Conyers (D-Mich.) that would restore language in the bill involving the calculation of the 60-day period in which there is a right to file for a patent term extension.

This amendment initially failed in 208-209 vote, but Democrats argued that a member was in the well trying to vote when the vote was shut off too early. After some discussion, Democrats asked for unanimous consent to retake the vote, and House Majority Leader Eric Cantor (R-Va.) agreed. The amendment then passed in a 223-198 vote.

The House accepted a handful of other non-controversial amendments by voice vote. These included language from Rep. Gwen Moore (D-Wis.) to have USPTO track the diversity of patent applicants, one  from Rep. Gary Peters (D-Mich.) requiring a USPTO study on what it can do to help small companies obtain and enforce patents, and language from Rep. Ben Lujan (D-NM) that adds requirements to the process of selecting USPTO satellite office locations.

Members also accepted by voice vote language from Rep. Jackie Speier (D-Calif.) that directs USPTO to require parties to provide evidence to prove and rebut claims in patent disputes, and one from Rep. Sheila Jackson Lee (D-Texas) that stresses the importance of protecting small business patents.

Also rejected by the House on Thursday were amendments from:

Rep. Tammy Baldwin (D-Wis.), to strike language in the bill that expands prior user rights arguments against patents. Failed in 81-342 vote.

Rep. Dana Rohrabacher (R-Calif.), to exempt small companies from post-grant patent reviews. Failed in 81-342 vote.

Rep. Jared Polis (D-Colo.), to allow tax strategy patents currently being applied for to be exempted from language in the bill that ends tax strategy patents. Rejected in voice vote.