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U.S. Senate to consider patent reform bill

Posted: 22 Jan 2008     Print Version  Bookmark and Share

Keywords:patent reform bill  U.S. Senate  patent litigation 

Following the U.S. House of Representatives' passing of the patent reform bill in September 2007, the U.S. Senate will take its turn on the controversial bill that aims to raise the quality of patents and reduce patent litigation and abuse.

The legislation has pitted large electronics companies against individual inventors and the pharmaceutical industry and divided political parties and government branches in a debate over the best legal structure to protect innovation.

"Before the Christmas break we were given assurance the patent reform bill will be one of the first things to consider after the break although no exact date for bringing it to the floor was set," said a spokeswoman for Senator Patrick Leahy, who sponsored the bill. "It looks like it will come up in the next month or so, but its unclear what will happen to the bill once it gets to the floor," she added.

The Senate bill S1145 mirrors legislation that passed the House in September. The House voted 220 to 175 with 37 abstaining or not voting on HR1908.

Voting on the House bill generally tracked party lines with 73 per cent of Democrats supporting and 67 per cent of Republicans opposing it. Dynamics could be different in the Senate having six of the nine co-sponsors listed for the bill at the end of December were Republicans.

Whether the Senate version will pass in its current form, be defeated or face significant revisions remains to be seen. "Ultimately [the House and Senate proponents] want to accomplish the same things so we want to pass something as close to the House bill as possible," said the spokeswoman.

Large electronics companies have lobbied for the legislation, claiming they are being bombarded by patent infringement litigation from a rising number of firms, many with generally poor quality patents. Individual inventors and pharmaceutical companies have rallied against the measure, claiming it would weaken the patent system that protects their innovations.

The divergence comes in part because the rapidly-changing electronics industry spawns a huge number patents annually, only some of which genuinely cover fundamental technologies. The pharmaceutical industry, by contrast, depends on a very small amount of patents used to protect drugs that could be decades in development.

The number of patent lawsuits heard in federal district courts doubled between 1988 and 2001, from 1,200 to nearly 2,400, according to a report from the National Research Council. Meanwhile, the number of patent attorneys in the United States rose 39 per cent, more than six times the growth rate overall for attorneys, the report found.

'Flawed' bill
When the House bill passed last fall, many observes said it was flawed because federal courts laid down in the past year several high profile decisions that essentially created the reforms Congress seeks.

A Supreme Court ruling in a case involving eBay limited the use of injunctions. A case involving Microsoft and AT&T struck down the practice of granting damages for sales outside the United States. Another case involves Seagate Technology reduced the use of willful infringement which carries a penalty of treble damages.

Others said the bills in Congress fail to address fundamental issues in the process at the beleaguered patent office. The United States Patent and Trademark Office has a backlog of as many as 750,000 patent applications.

The Senate's Patent Reform Act of 2007, introduced last April, generally follows the line of HR1908 which calls for the U.S. to shift from its first-to-invent to a first-to-file policy more in line with patent offices around the world. The first-to-file approach reduces sometimes thorny litigation aimed at establishing when concepts were invented and eases a path to global patent harmonisation.

The House bill also aims to set limits on damages by tying them to the value of the patent itself, not including any prior art on which it is based. It also seeks to narrow the definition of willful infringement to cases where it can be demonstrated that an infringer knew of the patent and used it anyway. Willful infringement can pay treble damages.

In addition, the House bill would limit patent lawsuit venues to courts in jurisdictions where the infringement took place or where the parties do business. Finally, it would define a new and streamlined process for re-examining patents when they are challenged.

The IEEE-USA came out strongly opposed to the bill, saying it would weaken the patent system and thereby harm an already bad job market for US engineers. The group also compiled a list of about 200 generally medium-sized companies and universities who opposed the bill. The list included some large concerns such as the AFL-CIO, the American Intellectual Property Lawyers Association, General Electric, Medtronic and Texas Instruments.

The Bush administration also came out in opposition to the Congressional reforms last year, in part because the bill puts too many limits on a court's discretion assessing damages in patent infringement cases.

- Rick Merritt
EE Times

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