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On March 8, 2011, the Senate voted to pass a patent reform bill that now heads to the House of Representatives for consideration. Patent reform has been a topic on the Congressional floor since 2005, and each proposed bill has gone through several iterations. The current Senate bill, called the America Invents Act and passed by a 95-5 vote, provides a variety of amendments to title 35 of the U.S. Code. If passed into law, some of the more significant provisions include:

• Adoption of a first-inventor-to-file system, replacing the current first-to-invent system. This adoption is intended to align U.S. law with international laws and treaties regarding the determination of which inventor is entitled to a patent when multiple applicants claim the same subject matter. A one-year grace period for filing still exists, however the grace period is limited to disclosures by the inventors or derived from the inventors, rather than the present grace period available as to all disclosures. First-inventor-to-file would take effect beginning with applications filed 18 months after the law becomes effective. The bill further provides for derivation proceedings to replace current interference proceedings in instances where a later applicant claims that a first applicant derived the invention from th e later applicant's work.
• Implementation of new post-grant review procedures.
• Within nine months of grant, any person other than the patent owner may petition for a post-grant review of a patent on any ground of patentability based on prior art or Section 112 compliance.
• After nine months post-grant or the conclusion of any post-grant review, patents could be challenged inter partes on the basis of patents or printed publications.
• A supplemental examination procedure is provided for a patent owner to request the USPTO consider, reconsider, or correct information believed relevant to the patent, thereby permitting patent owners to cure allegations of possible inequitable conduct arising from the original prosecution by making post-grant submissions to the USPTO. If a substantial new question of patentability is raised by the request, the Director will order reexamination of the patent. Ex parte reexaminations will continue to be available if requested by a patent owner or a third party, upon a showing of a substantial new question of patentability.
• A transitional post-grant procedure to review the validity of business method patents that pertain to the practice, administration, or management of a financial product or service is also provided.
• Elimination of failure to disclose the best mode of making and using the claimed invention as a basis for finding patent invalidity, although the USPTO would continue to require the best mode be disclosed in patent applications.
• Permission of the USPTO to be a fee setting authority, in contrast to the current system where the USPTO must receive approval from Congress to set fees. This provision may result in higher fees. The bill also halts fee diversion such that the USPTO may retain the fees it collects.
• Establishment of a "micro entity status" as a subset of the "small entity" status, where micro entities, such as applicants with fewer than five patent applications or state institutions of higher education, could enjoy a 75% discount on USPTO fees compared to the 50% discount provided for small entities.
• Permission for third-party submissions of prior art during prosecution of an application.
• Establishment that failure of an accused infringer to obtain an opinion of counsel or to produce such opinion during litigation cannot be used to prove willful infringement.
• Limitations on who may sue regarding false markings.

Notably, provisions regarding damages in infringement lawsuits were omitted from the bill. No prior user rights are provided as a defense to infringement. The Senate bill instructs the USPTO Director to analyze and report on the operation and effects of prior user rights in other industrialized countries. The proposed effective dates are not the same for each provision, and some provisions are retroactive in nature while others are not. The bill is next considered by the House Judiciary Committee. The Chairman of this Committee, Sen. Lamar Smith, indicated that the House will introduce similar legislation this month. If the House bill passes and is different than the Senate bill, the differences will have to be reconciled before a final bill is brought before the President for signature.