S 507 Info

By Joanne Hayes-Rines
President UIA-USA

Here's the info on Senate Bill 507, "The Omnibus Patent Act of 1997":

1.) The Senate Judiciary Committee states it will issue a report on its findings and there will be no floor action until the report is distributed. No schedule for issuance was given.

2.) After S. 507 was voted out of the Judiciary Committee on May 22, a "hold" was put on it by Sen. Kit Bond (MO), chair of the Senate Small Business Committee. In a letter to his fellow Senators dated June 5, Sen. Bond expressed the following concerns about S. 507:

-- "Problems remain in the bill that jeopardize the value, certainty and protection of the American patent, threatening the ability of independent inventors and small businesses to continue their incredible work."

-- Patent reexamination - . . . "[this would] expand those eligible to challenge a patent while decreasing the rights of the patent holder. Given the tremendous legal expense required to defend a patent, the new procedures are an easy target for abuse and may become a tremendous burden on inventors and small businesses."

-- Prior User Rights - "This bill creates a defense for patent infringers. . . Small businesses that have spent time and money creating an idea and bringing it to market could have the value of their patent dramatically reduced by one claiming to have had the idea first despite the fact that it was unpatented. . . this is contrary to our tradition of honoring the first to invent."

-- Patent Office Board -- "The legislation reserves only one space for independent inventors and no spaces for small businesses . . . it is not representative of the broad range of patent applicants as a whole."

-- Early Publication -- "This requirement was rolled back in the committee mark-up [those who do not file patent apps abroad were exempted from pre-grant publication] but is cherished by many proponents of the change."

-- "The changes proposed by S. 507 may have enormous consequences. It is vital that the supporting arguments be made before the full Senate and that this legislation be scrutinized by every member of Congress."

3.) The Association of American Universities has FINALLY spoken out on this legislation. Their silence on H.R. 400 was interpreted by some members of Congress to be tacit "support" for the bill. In a letter dated May 13, 1997, to Sen. Hatch, the president of the AAU, Cornelius J. Pings stated:

-- "Universities have preferred that patent term be the longer of 20 years from initial filing or 17 years from date of issuance. . . Universities would like language . . . that allows a patent applicant to claim an administrative delay in cases where pendency exceeds 3 years from initial filing."

-- Prior User Rights -- "The concept of prior user rights would place universities at a distinct disadvantage with respect to private industry because it favors trade secret protection over publication... it would dramatically interfere with the university-to-innovation process. Universities would prefer that S. 507 not include a provision on prior user rights."

-- Reexamination Procedures -- "Companies will be able to use the reexamination process to involve universities in extensive Patent Office procedures, exhaust university financial resources, and thereby prevail in patent disputes regardless of the merits of the case. Universities would prefer that S. 507 not include a provision on reexamination procedures."

4.) There are still a great many problems with S. 507. In addition to the concerns expressed by Sen. Bond and Mr. Pings, here are a few more concerns:

-- Cost of Publication -- Even though those who file abroad have been exempted from publication, S. 507 says they still may have to PAY for the early publication of other apps! The cost of publication shall be paid "by adjusting the filing, issue, and maintenance fees or by any combination of those methods". It does not specifically say that this will be ONLY for those who will file overseas. The decision on how to recoup the publication costs will be decided by the Commissioner who is clearly not a friend of the independent inventor. Therefore, it MUST be very clear that only those who publish pay for it or he will make you pay!

-- Corporatizing PTO -- Removing the protection of civil service status from the patent examiners could expose them to pressures from the outside from which they have historically been insulated. We all know the pressures that major corporations and international interests exert on Washington's political figures . . . dare to imagine what the examiners will be faced with if they are no longer shielded by civil service protection! Taking away this protection will open the door to incredible influence peddling because the stakes are so high.

-- Prior User Rights -- This is the first step toward creating a first to file patent system. There's no reason for it! It rewards the secret keeper! It's against the American tradition and will make it IMPOSSIBLE for you to guarantee a potential licensee that he or she will have an EXCLUSIVE license to your invention.

In summary, with pages of amendments and still more to come from the Senate floor, S. 507 and its House companion, H.R. 400, look like horses designed by a committee (that's the definition of a camel). S. 507 still has much wrong with it and should be killed.

I would urge you to contact your Senators and the members of the Small Business Committee. (To mail your comments, just address the envelope to: Senator ____, U.S. Senate, Washington, DC 20515. I don't think e-mail is as impressive as a letter or even a fax.) Here's the list of the Committee members:

6/22/97


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Page last updated 6/22/97