Bush administration, tech titans clash on patents

U.S. Patent and Trademark Office continues to attack proposed law that the likes of Microsoft, Google, and HP argue could help knock out patent "trolls." Can a compromise be reached?

Renewed objections this week from the Bush administration could complicate the passage of a sweeping patent law rewrite backed by seemingly every prominent hardware and software maker on the map.

As the so-called Patent Reform Act of 2007 awaits action in the U.S. Senate, the Bush administration is once again raising alarms about the proposal's effects on mainstream manufacturers and small inventors. (Here's the entire letter (PDF) sent Monday to Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.), whose panel approved an amended version of the proposal last summer.)

The Bush administration says it doesn't have any qualms about "modernizing" the patent system in ways designed to weed out bad patents and boost the efficiency of the process. But it strongly opposes the Senate bill in its current form because it "doesn't yet strike the right balance for all innovators," Under Secretary of Commerce for Intellectual Property Jon Dudas told reporters in a conference call Tuesday morning.

The objections aren't new. The White House lodged similar complaints last September , just before the House of Representatives went on to approve its divisive proposal by a 220-to-175 vote.

The administration's key concern is a section that it argues waters down the ability of judges to award damages in patent suits as they see fit, potentially depriving patent holders of the right to obtain the compensation they deserve. Right now, the Senate bill doesn't give judges or juries enough discretion in deciding how much to award, Dudas said. That's been arguably the biggest sticking point all along among supporters and opponents of the bill.

Microsoft, Google, Cisco Systems, Adobe Systems, Apple, Intel, Symantec, Dell, Hewlett-Packard, eBay, Oracle, and Red Hat are among the high-profile signatories that have signed on in support of passage of the bill. Large financial institutions like Bank of America and Wachovia also back the measure, as do consumer-oriented advocacy organizations like the Electronic Frontier Foundation, Public Knowledge, and U.S. Public Interest Research Group. They support curbing the ability of patent holders to obtain what they consider disproportionate damage awards, spurring the rise of so-called patent trolls who exist only to extort large payments out of deep-pocketed companies.

In addition to the Bush administration, major manufacturers (think General Electric, 3M, and Procter & Gamble), pharmaceutical makers, biotechnology and nanotechnology companies, venture capitalists, small businesses and inventors, some universities and research institutions, and companies like Qualcomm oppose the measure. They all tend to have business models that rely heavily on vigorous enforcement of their patents and therefore object to efforts to limit the damages they can receive if their inventions are infringed.

Dudas said members of his staff have been making the rounds on Capitol Hill during the past two weeks, visiting 40 different Senate offices and holding a briefing Monday with about 70 staffers. They're not angling for a particular deadline, but "the sooner we come to the right answers, the better off we are because there are improvements that can be made and should be made," Dudas said.

One "improvement" that has would involve setting up a "post-grant review" process, within the office, that would allow for a lower-cost, arguably more efficient method of challenging just-issued patents outside of court. Both the pending Senate bill and the approved House bill would establish such a process.

Meanwhile, attorneys from the many tech companies that make up a group called the Coalition for Patent Fairness have stepped up their Capitol Hill visits in the new year, pressuring politicians for what they'd consider a favorable outcome.

Right now, it's anyone's guess when a vote will ultimately occur, with items like an economic stimulus package and a spy law rewrite on the agenda. But Judiciary Committee aide said staffers are hopeful that the full Senate will take up the thorny bill within the next month.
 

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