Publications of interest

In a rare display of bipartisan, bicameral cooperation, the Patent Reform Act of 2007 (H.R. 1908 and S. 1145) were introduced simultaneously on April 18, 2007 in an effort to provide the first substantial overhaul of the U.S. patent system in 50 years. While recognizing that certain aspects of America’s patent system may be in need of updating or reform, the small-business members of the National Small Business Association oppose the specifics of this particular effort.

Background
H.R. 1908 was introduced by Reps. Howard Berman (D-Calif.), chair of the House Judiciary Subcommittee on Courts, the Internet, and Intellectual Property, Lamar Smith (R-Texas), and Rick Boucher (D-Va.), and co-sponsored by twenty-one additional representatives. On July 18, the House Judiciary Committee approved-—by voice vote-—an amended H.R. 1908, and on Sept. 7, the full U.S. House of Representatives passed an amendment in the nature of a substitute of the bill in a 220-175 vote.

S. 1145 was introduced by Sens. Patrick Leahy (D-Vt.), chair of the Senate Committee on the Judiciary. It is co-sponsored by Sens. Robert Bennet (R-Utah), Larry Craig (R-Idaho), John Cornyn (R-Texas), Mike Crapo (R-Idaho), Orrin Hatch (R-Utah), Ken Salazar (D-Colo.), Chuck Schumer (D-N.Y.), Gordon Smith (R-Ore.), and Sheldon Whitehouse (D-R.I.). S. 1145 was approved by the Senate Committee on the Judiciary on July 19, in a 13-5 vote—with the understanding that work on the bill was not yet complete and that it would later be amended.

Outlook
The outlook for further Senate action is unclear, but Senate Majority Leader Harry Reid (D-Nev.) previously indicated a desire to bring the measure to the floor in the near future, possibly as early as February. A draft committee report on S. 1145, by Sen. Leahy, already has been informally circulated. The comprehensive and methodical report seems aimed at setting the stage for congressional action in the coming year.

With Sen. Leahy expected to propose a manager’s amendment (which could be coordinated with the House bill), any bill considered by the full Senate is expected to differ somewhat from the version that the Senate Judiciary Committee approved in July. Nonetheless, many of the provisions outlined in the report simply have been carried over from earlier drafts.

NSBA Position
NSBA opposes this proposal, and the patent reform legislation already passed by the House of Representatives, due to its failure to take into account the unique needs of small-business innovators. While S. 1145 includes a multitude of major provisions that specifically disadvantage small-business innovators, the following provisions are of chief concern:

First-to-Invent to First-to-File Conversion
Despite the appeal of international harmonization, America’s unique patent system—and its singular ability to harness and protect the country’s small inventors—has played a fundamental role in helping it achieve its status as the global leader in technological innovation.

The first-to-invent patent system has been a major mechanism for the dynamism of small business innovation. It guarantees that carefully and well-developed inventions are patented and at much less expense to the patentee than in first-to-file countries.

While the National Academy of Sciences report recommends reducing international inconsistencies in patent law, it also recognizes that, “Continuing high rates of innovation suggest that the patent system is working well and does not require fundamental change.”

Post-Grant Patent Challenges and the Broad Expansion of USPTO Powers
Administrative decisions such as those outlined in S. 1145 are more susceptible to lobbying and backroom maneuvering than judicial review. Furthermore, it is not evident that it is in the best interests of America’s most-vulnerable innovators to grant broad rulemaking authority to the USPTO.

This attempt at broad patent reform could be potentially devastating to America’s most productive yet vulnerable innovators. The effect this legislation would have on America’s entrepreneurs has not been appropriately examined, and NSBA urges very careful consideration before the Senate moves forward.


Cfr : NSBA

The Senate is scheduled to take-up the economic stimulus bill (H.R. 5410) this afternoon, Feb. 6, based on a package that passed the Senate Finance Committee with bipartisan support. It would surpass the cost of the House’s bill by roughly $40 billion. Lawmakers are hoping to pass a stimulus bill before Congress begins a week-long recess on Feb. 16.

The House-passed bill, with an estimated $146 billion price-tag, gives individuals rebates of $600, with an additional $300 for each child. High-income individuals would be gradually phased-out, beginning with those who earn between $75,000 and $87,000, and low-income individuals would get a portion ($300) of the rebate, as long as they earned at least $3,000 in 2007.

The Senate proposal—estimated to cost roughly $200 billion—gives individuals $500, with an additional $300 for each child. High-income individuals would be gradually phased-out between the $150,000 and $160,000 mark, and low-income individuals earning more than $3,000 per year, including veterans and Social Security benefits income, would be eligible for the full rebate. The Senate Finance Committee version prohibits Members of Congress from receiving a rebate, and clarifies that illegal immigrants are ineligible.

The House bill includes increased loan limits for the Federal Housing Administration (FHA) from $362,000 to $729,750, as well as increased limits for Fannie Mae and Freddie Mac, from $417,000 to $729,750. The Senate Finance Committee agreement does not have such a provision, but one is expected to be included in the final package voted on by the Senate.

Both the House and Senate Finance Committee versions include a restoration of the bonus-depreciation write-off—although Senate negotiations are still underway on whether or not this will make the final cut—which would allow firms to deduct 50 percent of the purchase price of manufacturing facilities and other capital equipment in the year it is put into service. Additionally, small business would be given an immediate, but temporary, increase on Section 179 expensing up to $250,000—doubling the current level—on new and used equipment.

The Senate Finance Committee version includes an extension—from the two years in current law to five years—on net-operating-loss carryback, which would allow business owners to offset one year's losses against another year's income. The package also would provide $5.5 billion in tax breaks to boost renewable energy incentives, extend unemployment insurance benefits, and expand the tax-exempt mortgage revenue bonds that states can offer to help fund low-income housing and low interest mortgages by $10 billion over the next three years.

In the past week, debate over the bill, its contents, and the procedure to amend and vote on the bill has been contentious, with Senate Minority Leader Mitch McConnell (R-Ky.) seeking to eliminate the provision that would give rebate checks to individuals based on their veterans and Social Security benefits income. Senate Majority Leader Harry Reid (D-Nev.) has rebuffed this request—implementing a procedure called “filling the tree” to block any amendments from Republicans—and will instead push for a vote on the Senate Finance Committee agreement with the inclusion of House-passed FHA, Fannie-Mae and Freddie-Mac language and an additional $1 billion in low-income heating assistance.

With several moderate Republicans already supporting the measure, Senate Finance Committee Chair Max Baucus (D-Mont.) expressed confidence that his Committee’s proposal would garner the requisite 60 votes. The Republican leadership in the Senate has been critical of the proposal and the process, however.