RealTime IT News

Republicans Seek Delay in Patent Reform Bill

Two days before a scheduled Senate Judiciary Committee markup of the Patent Reform Act of 2007, four Republican members of the panel are seeking a delay in the vote. The lawmakers said the controversial measure deserves further hearings.

In a Monday letter to Judiciary Chairman Patrick Leahy (D-Vermont) and ranking member Arlen Specter (R-Pa.), Senators Tom Coburn of Oklahoma, Jon Kyle of Arizona, Sam Brownback of Kansas and Chuck Grassley of Iowa said the panel needs more time to "work through certain issues."

Last week, the committee held a hearing on the bill during the contentious Senate debate on immigration. Of the four senators, only Coburn attended the hearing.

The bill would more narrowly define willful infringement, apportion infringement damages to the economic value of the patent's contribution to an overall product and create a post-grant review to challenge issued patents. The legislation also calls for a first-to-file system and grants broader rulemaking authority to the U.S. Patent and Trademark Office (USPTO).

"Many prominent American businesses on the cutting edge of innovation are expressing concerns about the impact of sweeping patent reform," the letter states. "These concerns merit thoughtful consideration, and we believe that more hearings will help inform the committee before we proceed to markup."

Specifically, the four Republicans cited the key reform issues – limiting infringement damages and post-grant reviews – need to be "carefully examined to ensure that they do not undermine innovation, increase frivolous litigation or undermine property rights."

"Senators Leahy and Hatch have been holding hearings on this issue for several years now and look forward to working with senators on and off the committee as they move to mark the bill up this summer," Judiciary Committee spokesman Tracy Schmaler told internetnews.com, noting any committee member can put a one-week hold on consideration of the bill.

Since 2005, the Judiciary Committee has held seven hearings on patent reform. Coburn has attended two of the hearings while the other signatories to Monday's letter have not attended any of the hearings.

Patent reform is at the top of the technology industry's wish list for the 110th Congress. Tech contends the current patent system encourages litigation and large infringement awards that chill innovation, most recently pointing to a February $1.52 billion judgment against Microsoft for infringing on Alcatel-Lucent's MP3 patents.

Although Microsoft holds a license to use the technology, the jury decided Redmond obtained them from the wrong party. Damage calculations included all international sales of Windows containing MP3 technology. Microsoft is appealing the decision.

Other industry groups, primarily biotech, pharmaceuticals and manufacturing, praise the current system for providing infringement protection in return for expensive research and development that ultimately serves the public.

"We believe that more hearings are necessary to adequately address a number of issues with broad implications for our economy," the Republican letter states.

The PTO has also expressed concerns over the proposed reform. At last week's hearing, Jon Dudas, director of the USPTO, told the committee the Bush administration generally supports the reform provisions, particularly post-grant reviews.

Dudas did not mention the subject of apportioned judgments or narrowing the definition of willful infringement in his oral testimony before the committee, but in his written statement he said both issues needs further evaluation.

"While the appropriateness of damages awards in a number of patent cases may be subject of debate," Dudas wrote, "the USPTO does not believe that a sufficient case has been made for a legislative provision to codify or emphasize any one or more factors that a court must apply when determining reasonable royalty rates."

Legislation similar to the Senate bill has been introduced in the U.S. House. In May, a House Judiciary subcommittee approved the measure but only after members insisted on undetermined changes in the bill before a full committee vote.