Patent Reform in the 112th Congress: Innovation Issues

Wendy H. Schacht
Specialist in Science and Technology Policy

John R. Thomas
Visiting Scholar

Congressional interest in patent reform has increased as the patent system becomes more significant to U.S. industry. Patent ownership is perceived as an incentive to the technological advancement that leads to economic growth. Yet, this augmented attention to patents has been accompanied by persistent concerns about the fairness and effectiveness of the current system. Several studies, including those by the National Academy of Sciences and the Federal Trade Commission, recommended reform of the patent system to address perceived deficiencies in the operation of the patent regime. Other experts maintain that major alterations in existing law are unnecessary and that the patent process can adapt, and is adapting, to technological progress.

Two omnibus patent reform bills introduced in the 112th Congress, S. 23, the America Invents Act, and H.R. 1249, the Leahy-Smith America Invents Act, would make significant changes to the patent system. Both bills would adopt a first-inventor-to-file priority system, allow assignee filing, establish USPTO fee-setting authority, provide for post-issuance review proceedings at the USPTO, and introduce other reforms. Several of these proposals have been the subject of discussion within the patent community for many years, but others present more novel propositions.

Although S. 23 and H.R. 1249 have many similarities, the two bills differ in some respects. For example, S. 23 would address the residency requirement of judges serving on the U.S. Court of Appeals for the Federal Circuit, while H.R. 1249 would not. Unlike S. 23, H.R. 1249 would significantly broaden patent law’s first inventor defense. Other distinctions with respect to funding for the USPTO and other topics exist as well.

While the provisions of the proposed legislation would arguably institute the most sweeping reforms to the U.S. patent system since the 19th century, many of these proposals, such as preissuance publication and prior user rights, have already been implemented in U.S. law to a more limited extent. These and other reforms, such as the first-inventor-to-file priority system and postgrant review proceedings, also reflect the decades-old patent practices of Europe, Japan, and our other leading trading partners.

Some observers are nonetheless concerned that certain of these provisions would weaken patent rights, thereby diminishing incentives for innovation. Other experts believe that changes of this magnitude, occurring at the same time, do not present the most prudent course for the patent system. Patent reform therefore confronts Congress with difficult legal, practical, and policy issues, but also with apparent possibilities for altering and possibly improving the legal regime that has long been recognized as an engine of innovation within the U.S. economy.


Date of Report: June 30, 2011
Number of Pages: 38
Order Number: R41638
Price: $29.95

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