Legislating creativity--feds plan patent reform

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study released last year estimates that Linux infringes 283 patents, including 27 held by Microsoft.

In a stark warning that patent litigation could open another front in the Linux-Microsoft wars, Mitch Kapor, chairman of the Mozilla Foundation, predicts that the software colossus will wield its fast-growing stockpile of patents against Linux. (Insurance for Linux users is already available.)

Michael Tiemann, president of the Open Source Initiative, said that open-source programmers--especially hobbyists or people without resources to search patent databases--are vulnerable to writing code that accidentally infringes on a patent.

"Any line of code I write could in fact trip across a patent I never even knew existed, and that's a problem for innovation, and it's a problem for open source," Tiemann said.

Acknowledging those arguments, European politicians voted in July to reject software patents. But that move is viewed in the United States as radical, and no one in Congress has suggested following suit.

"If Representative Smith is going to help make the patent office more efficient and more accountable, that's wonderful," Tiemann said. "But as long as the real question is whether or not software patents really belong in the patent system or should exist at all, I don't think that's a question that Smith's bill entertains."

Attorney Bruce Sunstein, who heads the patent practice group at Boston's Bromberg and Sunstein law firm and supports the Smith bill, said he believes the fears of open-source advocates are unfounded.

"Patents, software and free software have coexisted" since the 1980s, Sunstein said, and will continue to do so.

Hatch's unplayed hand
One possibility for broader changes to patent law lies in the Senate.

Hatch, who heads a new subcommittee devoted to writing intellectual-property law, may be open to more far-reaching changes to the patent system. Although he has yet to disclose any details, Hatch has promised that a bill is in the works.

In a speech last month to patent attorneys in Salt Lake City, Hatch acknowledged that "many of the current complaints about the patent system that I have heard deal with the number of suspect and over-broad patents that are issued."

He indicated that he might consider two other legislative options. The first one would be to permit third parties to submit "prior art," the legal term for evidence that an alleged invention was already public, after the patent application has been published but before it has been granted. A second option would be to repair the Patent and Trademark Office's existing re-examination process, which is virtually unused.

"It is vitally important that PTO examiners have access to any information which may be in the hands of the public," IBM spokesman Todd Martin said. "Parties should have the right to submit prior art at any point during the examination process."

Those reforms would go beyond what's anticipated in the final House version. Blair Jones, a spokesman for Smith, acknowledged that the bill is mostly complete but added that "further changes are possible--those talks are ongoing."

One reason that companies like Microsoft are backing Smith's proposal to curb injunctions against patent misuse is the possibility of disrupting product shipments during litigation. In October 2003, for instance, Eolas Technologies asked for an injunction barring Microsoft from shipping Internet Explorer.

From Microsoft's perspective, injunction reform makes good business sense: Software patents are proliferating, and it's often difficult for companies to know whether a judge might be persuaded to grant a court order before a full trial can take place.

But the biotech industry, which relies on fewer patents and a relatively more predictable legal environment, prefers to preserve the current method of granting injunctions. This sets the stage for more political jockeying before Congress this fall--and Hatch seems sympathetic to the argument.

Pharmaceutical and biotech companies "rely on the absolute exclusivity of their patent rights, often enforced by injunctions, to ensure that they are able to commercialize their inventions and enjoy the fruits of their innovation," Hatch said in his speech last month. "Similarly, small inventors rely on injunctive relief to equalize the playing field when competing against larger, better-funded enterprises."

Political-risk calculus
It seems likely that Congress eventually will approve some type of patent reform.

Yet what remains unclear is whether politicians will merely approve some uncontroversial changes or take the political risk of offending large software makers or the biotech industry through more substantial alterations.

Complicating matters further is that the software industry is far from unified on the subject. Morgan Reed, a vice president at the Association for Competitive Technology, said that "we can't support the bill as it was introduced" because it does away with automatic injunctions. Reed's group counts more than 2,000 smaller software developers as members.

In the past, IT companies have been politically successful only when united on controversial topics, such as the R&D tax credit, more H-1B visas, restrictions on Internet access taxes, free trade with China and curbs on lawsuits arising from the Year 2000 computer bug .

That might doom the chances for final approval this year. Dan Ravicher, legal director of the Software Freedom Law Center, which provides legal aid to nonprofit developers of free software, predicts that distractions over Supreme Court vacancies won't help: The same Senate committee that presides over confirmation hearings also oversees patent law.

"The heart attack that's happening with the patent system is poor patent quality. The patent office is issuing too many patents that don't deserve to be issued," Ravicher said. "The (Smith) bill does a little but not too much, so it's kind of like putting a Band-Aid on the finger of someone who's dying of a heart attack."

CNET News.com's Anne Broache contributed to this report.