Patent Reform Bill Moves Forward in U.S. House

Tech has a friend in the house. In a unanimous voice vote, the U.S. House Judiciary Committee this week endorsed patent-reform legislation, which the tech industry has been pushing for decades.

The Patent Reform Act of 2007 would allow a second review of patents after they have been granted to challenge the validity of a newly issued patent. The bill would also narrow the definition of willful infringement, which brings treble damages in infringement

The legislation also calls for limiting infringement damages to the economic
value of the patent’s contribution to an overall product. Currently, damages
are based on the entire market value of the product.

The bill also implements a first-to-file standard consistent with
international practice.

“Intellectual property industries not only drive a significant part of the
American economy, but also provide millions of Americans with well-paying
jobs,” bill co-sponsor Lamar Smith (R-Texas) said in a statement. “The Patent
Reform Act protects intellectual property by addressing critical weaknesses in
the current law and eliminating the legal gamesmanship that rewards lawsuit
abuses over creativity.”

The bill now goes before the full U.S. House for an as yet unscheduled floor
vote. Similar legislation is pending before the Senate Judiciary Committee,
which has a vote scheduled on the bill Thursday.

Since the legislation was first introduced
in April, the pharmaceutical, bio-technology and manufacturing companies have
lined up to oppose the key portions of the legislation.

Wednesday, though, that opposition seemed to be lessening.

“The leadership and several members of the committee recognized that changes to
the bill are still necessary and we look forward to working with them to
further improve the bill,” 3M’s Gary Griswold, representing the Coalition for
21st Century Patent Reform, said in a statement. “While there is still much
work to do before the coalition can support the legislation, we are encouraged
by the incremental progress made during today’s mark-up.”

Griswold added that while the group, which includes Eli Lilly, General Electric,
Johnson & Johnson and Proctor & Gamble, still has “serious concerns” about the
bill, amendments to it approved Wednesday were a “positive step.” The
amendments narrow the “second window” of post-grant reviews.

Last week, the Senate Judiciary Committee approved much the same amendments.

According to Sen. Patrick Leahy, infringement damages would be limited,
“unless the claimant shows that the patent’s specific contribution over the
prior art is the predominant basis for market demand for an infringing product
or process.”

Sen. Arlen Specter (R-Penn.) added an amendment that seeks to eliminate the
popular practice of “forum shopping” by limiting venues for
patent-infringement cases.

“Few issues are as important to the economic strength of the United States as
our ability to create and protect intellectual property,” Smith said. “The
Patent Reform Act of 2007 updates current law to better protect intellectual
property, enhance patent quality and increase public confidence in the
integrity of patents.”

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