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A Eulogy For Patent Reform?

Patent reform

Everyone agreed that the U.S. patent system needs to be updated. And if it hadn't been for one sticking point, that update might have come this year.

Now that high-level talks in the Senate Judiciary Committee have broken down, the opportunity for the patent system's first major overhaul in 50 years may have been lost -- at least for the current legislative session.

"We never want to say it's impossible, but it certainly looks like a window has closed," said a staffer for Committee Chairman Patrick Leahy, D-Vt., one of the bill's chief supporters.

That seems even more likely with the election on the horizon, almost certainly ensuring that the Patent Reform Act will not make it to the floor this year, according to legislative aides.

Senate Majority Leader Harry Reid, D-Nev., had set aside this week for debate and a floor vote on the Patent Reform Act, but committee members were unable to reach agreement on the final language of the bill.

The dispute centered around the provision regarding damages -- how patent holders should be compensated when they successfully demonstrate infringement on their work.

At the same time, lobbying efforts in opposition to the bill escalated as a largely closed-room debate began to emerge from the shadows in recent months, with powerful and diverse interests such as the pharmaceutical industry and organized labor urging lawmakers to scuttle the bill.

Meanwhile, many large technology companies, such as Hewlett-Packard and Cisco, had lobbied in favor of the bill under the auspices of the Coalition for Patent Fairness trade association.

The House passed a version of the bill in the fall.

Irreconcilable differences?

While the bill promised the first revamping of the patent system in decades, legislators evidently remained intractable on the issue of damages.

"We thought we had reached an agreement on this matter, but the language continued to shift, so we do not yet have a deal on the package," Sen. Arlen Specter, R-Penn., ranking member of the Judiciary Committee, said in a statement last week when the talks broke down.

"I am hopeful that we can reach an agreement, but more work has to be done to get it right," Specter said.

Supporters of the bill, most prominently Leahy and former Chairman Orrin Hatch, R-Utah, favored codifying the parameters through which patent holders could obtain damages awards in court.

Opponents charged that the restrictions were too tight, and that limiting the ability to obtain monetary compensation from infringers left intellectual property underprotected. [cob:Special_Report]

Other contentious issues, such as the legal jurisdiction of infringement suits and the ability to challenge existing patents, had generally been resolved. But there was no compromise to be found on damages.

"We are disappointed that critics of the bill refuse to budge an inch when the bill's sponsors and supporters have made a tremendous number of compromises to address their concerns," said Mark Isakowitz, coordinator for the Coalition for Patent Fairness, in a statement responding to the breakdown of talks.

Earlier this month, Isakowitz and attorneys for several of the tech companies involved talked up signs that momentum for the bill was gathering and that introduction to the Senate floor was a relatively simple matter of ironing out a few remaining details with the language.

But opponents of the bill assured InternetNews.com that the still-unresolved issues were quite significant and that its introduction was anything but inevitable.

Now, it turns out, they were right.

Looking forward, working with a legislative calendar shortened by the election, the senators will have to reach an agreement very soon for the bill to have a chance to make it to the floor this year. Given the intransigence on both sides regarding the damages issue, such a turnaround would be a major surprise.

A Reid staffer said she was not certain if the majority leader would be able to find time to schedule a patent debate even if the bill were to emerge from committee.

"This is a major reform to the patent system; it's not the kind of thing that you can debate in an afternoon," a Leahy staffer told InternetNews.com. "Obviously, we're very disappointed."