Senate panel approves patent reform bill

A Senate panel on Thursday approved a patent reform bill that brings opposing parties from the technology, pharmaceutical, and other industries closer to a compromise on the contentious issue.

The Senate Judiciary Committee voted 15 to 4 to bring the Patent Reform Act before the full Senate, despite changes to the legislation opposed by one of its sponsors, Sen. Orrin Hatch (R-Utah). Along with Hatch, the three other senators who voted against the legislation in its current form are Sens. Russ Feingold (D-Wis.), Jon Kyl (R-Ariz.), and Tom Coburn (R-Okla.).

The committee approved a number of changes to the legislation, which were negotiated over the last week. Hatch opposed changes to the portion of the bill that limited the damages a patent holder could request for patent infringement. The new language, developed by Sens. Dianne Feinstein (D-Calif.) and Arlen Specter (R-Penn.), adds what is referred to as a "gatekeeper" provision, giving judges more authority to determine how to assess damages.

"Patent reform is urgently needed," said Committee Chairman Patrick Leahy (D-Vt.), one of the bill's co-sponsors. "The agreement this committee has reached to move forward with patent reform is the culmination of months of arduous negotiations and compromise. Senator Specter, Senator Feinstein, and so many others have lent important voices to this debate, and working together, we can make the necessary, long-overdue improvements our patent reform system requires."

Members of the committee have held dozens of meetings with various companies and industry representatives to hash out a resolution over patent infringement damages and other controversial provisions of the legislation. Many large companies have sought greater restrictions over damages, claiming they are subject to many frivolous patent infringements lawsuits.

The Coalition for Patent Fairness, which represents companies like Microsoft, Apple, and Google, pushed for damages limitations. The group said in a statement Thursday that the gatekeeper provision "begins to address the flaws in the patent litigation system that allow patent abusers, companies that do not produce or invent anything, to force our country's most innovative companies to divert billions of dollars away from innovation and job creation into litigation costs and hold-up settlements."

Horacio Gutierrez, corporate vice president and deputy general counsel for Microsoft, called the approved legislation "encouraging," even though the bill "may not address all the wishes of all of the parties involved, including those of Microsoft."

The Innovation Alliance, which represents patent holders like Qualcomm and Dolby Laboratories, said the change to the damages provision was an improvement but that it still takes issue with other portions of the bill, such as the provision allowing for post-grant review. That provision allows a patent to be challenged 12 months after it is issued.

"We are encouraged that the committee has expressed a desire to continue working to achieve a true consensus," said Brian Pomper, the Innovation Alliance's executive director. "This is welcome news, as we believe the post-grant review provisions approved threaten to diminish the value and enforceability of U.S. patent rights at a time when America's economic recovery and future job creation are dependent upon promoting U.S. innovation."