House Panel Approves Patent Reform Bill

Patent reform wobbled out of a U.S. House subcommittee Wednesday afternoon with even those voting for it demanding changes before a full House Judiciary Committee vote.

What those changes will be, the lawmakers didn’t say.

The Patent Reform Act of 2007 calls for a first-to-file standard for the rewarding of patents, bringing the U.S. in line with international standards. More controversially, the bill would allow post grant reviews of patents, create a narrower definition of willful infringement and reduce the amount of infringement awards to the actual value of the protected technology.

The provisions of the bill withstood the voice vote without amendments after extensive promises from co-sponsors Reps. Howard Berman (D-Calif.) and Lamar Smith (R-Tex.) to deal with concerns from reform minded legislators on both sides of the aisle.

“We will continue to fine tune the bill as it moves through the legislative process,” Smith said. “The action today will not be the final word.”

Judiciary Committee Chairman John Conyers (D-Mich.) said a forthcoming package of amendments “would help move these discussions along.” Berman, chairman of the subcommittee overseeing intellectual property law, added the measure, “gets down to what people really want and really need.”

The technology sector widely supports the bill and touts patent reform as one of the keys to keeping America competitive in a global economy. Costly patent litigation, industry leaders warn, is chilling innovation.

The new Democratic Congress, with support from Republicans long committed to patent reform, seems to agree. Identical versions of the Patent Reform Act of 2007 were introduced in the House and Senate just a month ago.

Berman and Smith, the former chairman of the subcommittee, have aggressively pushed the legislation.

Smith said Wednesday the measure is the “most significant, complete upgrade of patent law in the last 50 years.” Rep. Zoe Lofgren, whose district includes much of the Silicon Valley, told fellow lawmakers, “It is significant that we are here today.”

Though she noted not everyone was “wildly enthusiastic” about the bill, she said the legislation represents “tremendous progress” toward patent reform.

Powerful opposition, though, is forming against the key provisions of the bill. The Coalition for 21st Century Patent Reform, whose members include many of the country’s best-known pharmaceutical, bio-technology and manufacturing companies, said it has “serious concerns” the legislation would weaken the value of patents.

The group, whose members include Eli Lilly, General Electric, Johnson & Johnson and Proctor & Gamble, said adding a “second window” to the current patent process through a post-grant review would increase infringement litigation.

“The current bill language… would allow multiple attacks on a patent during its life,” the Coalition stated. “Such serial challenges would undermine the value of a patent and the ability of the patent holder to develop a product and bring it to the marketplace.”

Infringement awards based on a component’s only value, the group stated, would “reduce incentives for innovation by greatly diminishing damages obtainable from infringers.”

The Biotechnology Industry Organization (BIO) urged a “cautious approach to reforming patent law that continues to protect biomedical innovation.” BIO said the bill would “fundamentally undermine patent certainty, discourage investment in innovative technologies and reduce publication and collaborative activities among academic scientists.”

Smith, who dealt with much the same opposition in his unsuccessful attempts to get patent reform approved during his tenure as the IP subcommittee chief, shrugged off the criticisms, stating, “The basic thrust of the bill is in the right direction.”

Berman said he welcomed the input of all stakeholders, noting the “furious negotiations” going on behind the scene. Nevertheless, he warned, the subcommittee has a “keen interest” in approving patent reform.

“There will be patent reform in the 110th Congress,” Smith predicted. “This is a major step forward.”

As for what a final bill might actually look like, it’s still anybody’s guess.

News Around the Web