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Microsoft, Oracle call for patent reform

The U.S. patent system needs to be fixed, some companies say. The timing is perfect: The Senate is holding a hearing Monday.

Declan McCullagh Former Senior Writer
Declan McCullagh is the chief political correspondent for CNET. You can e-mail him or follow him on Twitter as declanm. Declan previously was a reporter for Time and the Washington bureau chief for Wired and wrote the Taking Liberties section and Other People's Money column for CBS News' Web site.
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Declan McCullagh
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CAMBRIDGE, Md.--America's current patent system is seriously flawed and must be repaired by Congress soon, some large software companies are warning.

Microsoft wants patent law rewritten to make it easier to challenge patents after they're granted and to curb what it views as "abusive litigation," said Brad Smith, the software company's general counsel.

"We need that system to continue in a healthy way," Smith said at a weekend conference here organized by the Association for Competitive Technology. "We need to ensure that high-quality patents are approved and low-quality patents are not."

Smith's comments, directed at the dozens of congressional staffers in the audience, represented Microsoft's latest critique of a patent system 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--which has been partially reversed--in a patent dispute over Internet Explorer.

Congress is listening. The Senate Judiciary committee is meeting Monday to consider patent reform legislation. Among those scheduled to testify: Segway inventor Dean Kamen, and lawyers for Intel and Micron Technologies. Meanwhile, the European Parliament is debating whether to permit U.S.-style software patents, a move that's opposed by free software advocates.

Smith's comments found support from Sanjay Prasad, Oracle's chief patent counsel.

He said that courts have been awarding damages for infringement that are out of line with the patent's real value. "No reasonable business person would ever agree to" pay those sums in licensing fees, Prasad said at the ACT conference on Saturday. "There's a large distortion between the value provided realistically, and how that comes out in court."

The influential U.S. Chamber of Commerce is backing patent reform. Post-grant review and opposition "creates another filter through which bad patents can be challenged," said Brad Huther, the former president of the International Intellectual Property Institute who's now directing the chamber's intellectual property efforts.

But Huther warned that Congress may not act swiftly. "This is not a problem that's going to be solved in a matter of years."