A fix for a broken patent system?
A long-awaited proposal in Congress to overhaul the patent system finally surfaces, and large software companies like it.
Rep. Lamar Smith, who heads the House of Representatives committee responsible for drafting patent law, said his proposal would improve the overall quality of patents and target some of the legal practices that have irked high-tech companies.
"The bill will eliminate legal gamesmanship from the current system that rewards lawsuit abuses over creativity," said Smith, a Texas Republican.
The Business Software Alliance was quick to praise the bill, saying in a statement that it goes a long way toward "improving patent quality, making sure U.S. law is consistent with that of other major countries and addressing disruptions caused by excessive litigation."
Probably the most sweeping change would be the creation of a process to challenge patents after they are granted by the Patent and Trademark Office. "Opposition requests" can be filed up to nine months after a patent is awarded or six months after a legal notice alleging infringement is sent out.
After an opposition request is filed, a panel of three administrative law judges will meet to review the controversy and, eventually, publish a written decision.
Another major change would be to award a patent to the first person to submit their paperwork to the Patent Office. Currently, patents are awarded to the first person who concocted the invention, a timeframe that can be difficult to prove.
Both of these alterations to federal law have been endorsed by Patent Office director Jon Dudas.
Companies such as Microsoft and Oracle have been calling for patent reform recently, saying that the current patent system is seriously flawed and must be repaired by Congress.
Microsoft has been especially critical of a legal framework that has caused it to spend $100 million a year defending itself against 35 to 40 lawsuits at any one time. Microsoft has gone on the legislative offensive after a jury awarded Eolas Technologies $565 million in damages--a decision that has been partially reversed--in a patent dispute over Internet Explorer.
Other changes the bill would make include recalculating the way damages are awarded--in a way that would make large jury awards more difficult to win--and make it more difficult to seek court injunctions.
Dennis Crouch, a patent lawyer at McDonnell Boehnen Hulbert & Berghoff in Chicago, said an earlier version of the legislation would have weakened the right to an injunction much more. "The proposed bill is a somewhat toned-down version of the draft that circulated this spring," Crouch said. "This version still has something to offend almost every interest."