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.

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