Senate Panel Amends Patent Reform Bill

Patent reform in Congress took a tentative step forward today with the Senate
Judiciary Committee approving several amendments to the proposed legislation.

Amendments submitted by Chairman Patrick Leahy (D-Vt.) and ranking member
Arlen Specter (R-Penn.) tweaked the language of the bill involving damages,
venue and post-grant reviews of patents. The panel did not approve the overall

The Patent Reform Act of 2007 was introduced
in both the House and the Senate to much fanfare in April. The technology
industry strongly supports the bill.

But since the measure was introduced, pharmaceutical, bio-technology
and manufacturing companies have lined up to oppose the key portions of the
legislation. House and Senate leaders have been engaged in protracted talks
with both sides.

“Negotiations rarely leave everyone with everything they would like. I have
tried to show flexibility and accommodate others’ concerns where possible,”
Leahy said Thursday. “Frankly, I favored the provisions in the bill as we
introduced it. I understand that other members and constituents of others have
interests and concerns and have tried to incorporate recognition of them as we
have proceeded.”

The overall proposal before the House and Senate would allow reviews of
patents after they have been granted, creating a so-called “second window” to
challenge the validity of a patent. The bill would also narrow the definition
of willful infringement, which brings treble damages in infringement lawsuits.

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.

“Today’s amendment addresses a number of important issues. It tightens the
post-grant review process to address concerns about abuse,” Leahy said. “The
amendment also addresses questions that have been raised about the damages
provision. The bill is intended to align damage awards with the value of the

According to Leahy’s amendment, 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

Spector’s amendment seeks to eliminate the popular practice of “forum
shopping” by limiting venues for patent-infringement cases to where the primary
plaintiff resides or has a place of business; the primary location of the
defendant; or “where the defendant has committed substantial acts of
infringement and has a regular and established physical facility.”

The Coalition for 21st Century Patent Reform, which opposes the key elements
of the bill, issued a statement saying the protracted debate over the bill
“underscores that there remain deep concerns and divisions regarding the
legislation as currently drafted.”

The Computing Technology Industry Association (CompTIA) issued a statement urging Congress to stay the course on patent reform.

“The IT industry needs the protection offered by patents to keep developing
world-leading IT products. But the system cries out for reform,” said
Melanie Wyne, CompTIA’s director of public policy.

“By clarifying
apportionment of damage awards, establishing fair standards for punitive
damages, restricting forum shopping and improving patent quality, the entire
ecology of the IT industry will better prosper.”

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