Both of Iowa’s senators voted against the deal to raise the debt ceiling in early August, but only one of them voted last night to block a $500 billion debt ceiling increase, which was part of that agreement.
Earlier on September 8, Senators Tom Harkin and Chuck Grassley helped send a patent reform bill to President Barack Obama. The president and Senate Majority Leader Harry Reid have characterized patent reform as a job creation measure. Follow me after the jump for more on yesterday’s Senate votes.
President Obama’s major jobs speech was in some ways an exercise in political theater. Immediately afterward, Senate Republicans tried a bit of their own showmanship. Josiah Ryan reported for The Hill,
Under the debt-ceiling agreement reached in early August, the Obama administration was authorized to immediately raise the debt ceiling by $400 billion. Another $500 billion increase was authorized this month, although that could have been blocked if both the House and Senate approved resolutions expressing disapproval. […]
The House and Senate resolutions are identical, and read:
Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That Congress disapproves of the President’s exercise of authority to increase the debt limit, as exercised pursuant to the certification under section 3101A(a) of title 31, United States Code.
That resolution never made it to the Senate floor. Instead, senators rejected a motion to proceed with considering it on a mostly party-line 45 to 52 vote. Grassley voted for the motion to proceed, as did all the Republicans present except for Scott Brown of Massachusetts. Harkin voted against the motion to proceed, as did all the Democrats present.
The House of Representatives may pass its own resolution disapproving the $500 billion debt ceiling increase, but that vote would be purely symbolic given last night’s Senate action.
Earlier yesterday, both Harkin and Grassley voted for a patent reform bill that passed on a lopsided 89 to 9 vote (roll call). The House approved the same bill in June with bipartisan support and bipartisan opposition (roll call). Iowa Republican Tom Latham (IA-04) and Democrats Bruce Braley (IA-01), Dave Loebsack (IA-02) and Leonard Boswell (IA-03) were among the 304 votes for patent reform, while Republican Steve King (IA-05) was one of 117 representatives voting no.
Brad Plumer covered the most significant provisions in the patent bill here. Excerpt:
The most contentious provision is the shift from a “first to invent” to a “first to file” system. The upside, proponents say, is that this change will harmonize our system with Europe’s and Japan’s. It could also tamp down the bickering over who thought of what first. But critics say this provision mainly benefits large corporations – the ones with the legal resources to rush things to the patent office – over smaller firms and start-ups. What if, for example, a tiny tech company takes an idea to a venture capitalist that’s not bound by a non-disclosure agreement and the VC, in turn, hands the idea over to one of the bigger companies in its portfolio? While the bill technically contains provisions for small firms to defend themselves, patent lawyers say it’s not clear that they’d win out in practice. Canada’s experience under first-to-file appears to bear this out.
What about the less-noticed aspects of the bill? Yar Chaikovsky, a patent lawyer at McDermott Will & Emery, says that while the “first to file” change gets all the press, smaller bits of the law could eventually prove significant. For instance, the bill has a “post-grant review process” that allows companies to challenge frivolous patents through the patent office, rather than getting bogged down in the courts. Many experts have argued that tech firms won’t take advantage of this provision. But Chaikovsky points out that there were lots of minor bits of the American Inventors Protector Act in 1999 – such as the inter partes reexamination procedure to knock down dubious patents – that seemed inconsequential at first but have become more widely used over time.
Democrat Maria Cantwell argued against the bill on the Senate floor:
“This isn’t a patent reform bill,” said Cantwell, with frustration evident in her voice. “This is big corporation patent legislation that tramples on the rights of small inventors. … It is siding with corporate interests against the little guy.”
Cantwell had offered one of three amendments to the bill, which were defeated earlier in the day.
Both Harkin and Grassley voted against all of the proposed amendments to the patent reform bill. Harkin did not send out a news release on this legislation. Grassley’s statement emphasized language he has long championed, which eliminates patents on tax strategies:
Washington, DC – Senate Finance Committee Chairman Max Baucus (D-Mont.) and senior Committee member Chuck Grassley (R-Iowa) today applauded the Senate’s passage of their bill to protect taxpayers and fight tax evasion, which was included in the larger patent reform bill. The Baucus-Grassley legislation prevents any individual or firm from patenting tax strategies, which could otherwise subject taxpayers to royalty fees for using the patented strategy when filing their taxes. The bill also stops tax patents from providing windfalls to lawyers and patent holders by preventing them from holding exclusive rights to use loopholes, which could provide some businesses with unfair advantages over their competitors. Now that both the House and Senate have passed the patent reform bill, it goes to the President for his signature.
“Unfair patents can give a small number of people a stranglehold on tax strategies that should be open to anyone,” Baucus said. “This bill will bring fairness to the system, and it will deter the use of tax shelters to evade the responsibility we all share. Our ongoing tax reform effort will continue cleaning up the code, and it can create jobs and be a major boost to our economy.”
“Tax strategy patents are on the rise. More and more legal tax strategies are unavailable or more expensive for more and more taxpayers,” Grassley said. “It’s important to protect intellectual property rights for true tax preparation and financial management software. At the same time, we have to protect the right of taxpayers to have equal access to legal tax strategies. That’s necessary for fairness and tax compliance. We need more tax compliance, not less.”
In order to obtain a patent, an inventor must show, among other things, that the claimed invention is novel and non-obvious and has a practical application. In 1998, the courts determined that a method of doing business may be patentable, and soon thereafter, the U.S. Patent and Trademark Office began granting patents for various tax-related inventions.
Tax practitioners have long decried the issuance of these tax-strategy patents because they are unlikely to be novel, given the public nature of the tax code, and undermine the fairness of the Federal tax system by removing from the public domain particular ways of satisfying a taxpayer’s legal obligations. The bill expressly provides that a strategy for reducing, avoiding or deferring tax liability cannot be considered a new or non-obvious idea, and therefore, a patent on a tax strategy cannot be obtained.
Baucus and Grassley have long been leaders in congressional efforts to protect taxpayers and prevent the patenting of tax strategies that result in extra costs for taxpayers.
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