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House takes small step toward revising patent law

But politicians, others remain divided over crucial sections in bill to rewrite patent law, so it's unlikely to proceed without major changes.

Anne Broache Staff Writer, CNET News.com
Anne Broache
covers Capitol Hill goings-on and technology policy from Washington, D.C.
Anne Broache
4 min read
WASHINGTON--The U.S. Congress took a small step on Wednesday toward revising what many large computer industry companies charge is a broken patent system.

A House of Representatives subcommittee overseeing intellectual property law approved by voice vote the so-called Patent Reform Act. The bill's sponsors and the Silicon Valley set have hailed the measure as an effective pathway to reducing excessive litigation, improving patent quality, and discouraging inflated licensing agreements.

The relatively speedy action on the bill, which was introduced in identical form in both the House and the Senate less than a month ago, reflects Congress' drive to move ahead changes that have lagged for years, said Judiciary subcommittee chairman Howard Berman (D-Calif.).

"It's a bicameral and bipartisan bill, and I recommend to my colleagues to move forward with this effort to meet the challenges of the 21st century," he said before Wednesday's vote. All the politicians present voted "yes" except for Rep. Jim Sensenbrenner (R-Wisc.).

But it didn't take long at Wednesday's meeting for reminders to emerge that the bill's approach is far from universally supported among American industry sectors. Staunch opposition to key sections, for instance, lingers from large patent-dependent corporations in the pharmaceutical arena, venture capital firms and some academic institutions, which say the effort would unnecessarily water down patent holder rights.

Sensenbrenner, the former chairman of the Judiciary Committee, cited those gripes before vowing to vote against the bill in its current state.

"I would think that the most prudent thing to do would be to keep this bill in this subcommittee, continue to put pressure on the stakeholders who are complaining about various parts of the bill, and at least get everyone onboard or not opposing the legislation before we mark it up," he said. Otherwise, it's doomed to fail or be rewritten by the Senate--two equally unsavory options, he added.

Berman dismissed any allegations that he's attempting to "ram things through" without proper debate. He and others said they're committed to fine-tuning sections that still give certain industries heartburn before the bill goes to a vote in the full Judiciary Committee, and ultimately the House.

Sweeping changes to system
Still dissatisfied with that explanation, Sensenbrenner proceeded to invoke House procedural rules in an attempt to stall the bill's consideration, but he was outvoted by others on the committee. Several members said they had decided to withhold amendments to the bill in the interest of moving it forward, but they said they would propose the changes when it went up for full committee consideration.

The bill's sponsors say the measure contains the most sweeping changes to the U.S. patent system in more than 50 years.

But those two provisions in particular have consistently drawn staunch resistance. A group called the Innovation Alliance, composed of venture capital firms and academic institutions, and a number of corporate heavyweights aligned under a group called the Coalition for 21st Century Patent Reform, including 3M, Caterpillar, General Electric, Johnson & Johnson, Eli Lilly and Procter & Gamble, have taken issue with several components that they argue will water down protections for patent holders.

One such section would establish a special review board within the Patent Office allowing for issued patents to be challenged without initiating expensive and time-consuming litigation. But critics say that in its current draft, the bill offers an unlimited "second window" for people to challenge issued patents, thus creating more uncertainty about their value.

Another contentious piece of the bill dictates that courts may generally only award damages to holders of infringed patents based on a patent's "specific contribution over the prior art"--that is, the extent to which the patent at issue improves on previous inventions.

That's intended to be a response to critics--particularly high-tech companies whose products generally rely on many thousands of components--who argue that the current system allows for winners of patent infringement suits to obtain disproportionate damage awards and, outside of court, fuels inflated settlements and royalty agreements. But opponents suggest that's unfair to patent holders.

A number of subcommittee members echoed those concerns before Wednesday's vote but said they would approve the existing version of the bill, provided that it be rewritten before further consideration. Rep. Lamar Smith (R-Texas), one of the architects of patent law changes in the last session, said the need for such legal changes is urgent, but agreed that those contentious sections need another look.

"Our actions today will not necessarily be the final word on this legislation," he said. He urged his colleagues to approve the imperfect version of the bill anyway, arguing that "this will send a strong signal that we are serious about completing the patent reform process we started last year."