The one good feature of the “America Invents Act,” an end to fee diversion, is now removed.  Nothing remaining in the bill justifies the disruption and transition costs. Please ask your representative to vote no, and ask your clients to do the same. The bill is up for final vote on Wednesday (it has already passed the Senate, this is the final major vote), so urgent action is required.

In order to pass the bill through the Senate, Sen. Coburn added language that would permanently end fee diversion. Sen. Coburn’s amendment provided that all fees collected by the Patent Office would be available to the Office, with no possibility of tampering or mischief by Congress.

However, on Friday, House leadership leaked an agreement among Speaker Boehner and several committee chairmen regarding fee diversion, set out below. Note that the agreed language essentially tracks today’s 35 U.S.C. § 42(b) and (c), except it gives a fancy name to the earmarked account that’s been in existence for 19 years. It does not give the Office the right to spend the money it collects. Former staffers for the Congressional appropriations process have confirmed that there is no practical difference—Congress will still be able to take funds raised by the Patent Office, and give the PTO worthless IOU’s in return. IOU’s that the PTO cannot spend. IOU’s that the PTO cannot count on for multi-year planning. IOU’s that are useless for updating the PTO’s IT infrastructure. IOU’s that cannot hire new examiners or raise pay for existing examiners.

Sec. ___. There is established in the Treasury a Patent and Trademark Fee Reserve Fund. If fee collections by the Patent and Trademark Office for a fiscal year exceed the amount appropriated to the Office for that fiscal year, fees collected in excess of the appropriated amount shall be deposited in the Patent and Trademark Fee Reserve Fund. To the extent and in the amounts provided in appropriations Acts, amounts in the Fund shall be made available until expended for obligation and expenditure by the Office for the purposes described in Section 42(c) of title 35, United States Code.

Because of the way House procedural rules operate, there is no longer an opportunity to change this or amend it. If the bill passes, fee diversion will continue.

If you haven’t already made up your mind on this bill, this should make it up for you. The proponents have not been able to counter the showings by the folks who create start-ups that this bill takes away the legal machinery that venture capital and other investors need—star-tup formation will fall precipitously, along with the innovation and jobs that they create. Proponents have been unable to give any numbers for cost savings of the bill that even approach the transition costs, let alone create savings after those transition costs are borne. The one thing that united the proponents of the bill was an end to fee diversion, and that’s now gone.

Now it’s up to you. All that’s required for the triumph of evil is for good people to do nothing. But all that’s required to stop this bill is about 3000 phone calls from constituents. Please go to and find your representative’s phone number, and phone today. (Phone. Emails won’t be read in time — the bill is up for a final vote Wednesday.)  Say these words:  “Please vote no on the rule for the patent bill, H.R. 1249, and vote no on final passage.” (“Vote no on the rule” means “don’t allow the bill to come to the floor for a vote.”) The person that answers the phone will not know enough to ask you detailed questions, those 19 words will do the trick. Then call five of your clients and ask them to do the same.

Second, and far less important, please email me PatentProcedure [at] gmail [dot] com, the names of companies (name of company, city and state, name of contact person, and an email address) that would be willing to sign on to a letter stating opposition to the bill of fee diversion is not ended.

Today’s post is by Guest Barista David Boundy, Vice President and Assistant General Counsel for a well-known financial services firm.

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