House votes to make patents harder to get, easier to contest

Senate also weighs significant overhaul

September 08, 2007|By Jim Puzzanghera | Jim Puzzanghera,Los Angeles Times

WASHINGTON -- The House passed yesterday the most significant change to the patent system in 50 years, a sweeping update to the process for granting exclusive rights to inventors.

Supporters said the legislation, approved 220-175, would weed out questionable patents and deter lawsuits that hindered U.S. innovation.

Under the bill, experts in a specific field would be allowed to submit their views about pending patents before they were granted. The measure also sets up a new procedure for reviewing patents after they are granted as an alternative to legal action.

In addition, the bill seeks to harmonize the U.S. patent system with the rest of the world. Instead of awarding patents to the person who invents something first, which can be difficult to determine, the legislation awards patents to the first person to file an application.

Supporters hope the House vote will boost prospects in the Senate. A similar bill was passed by a Senate committee this summer.

Information technology companies such as Microsoft Corp. and Apple Inc. support the overhaul. In an industry in which products change rapidly, the biggest players say reforms are needed to stave off lawsuits that divert research and development money.

But pharmaceutical and biotechnology companies, which depend on strong patent protections to justify their investment in the lengthy and expensive process of drug development, warn against tinkering too much with a system they say has served the country well for more than two centuries.

The bipartisan push for the bill, in the works for three years, has been fueled by a flood of applications in recent years that has overwhelmed the U.S. Patent and Trademark Office. Critics say the barrage led to thousands of dubious patents.

Some companies have used those patents - which remain in effect for 20 years - to threaten lawsuits, forcing out-of-court settlements and expensive trials.

If the bill becomes law, "it means that we will have a patent system ... focused on rewarding innovation rather than rewarding litigation gamesmanship," said Mark Chandler, vice president and general counsel for Cisco Systems Inc., a maker of computer network equipment.

Some recent high-profile patent suits, including a record $1.52 billion jury award against Microsoft in February over digital music patents held by Alcatel-Lucent, helped vault the legislation to passage.

That verdict was recently overturned. But the case, and one last year against Research in Motion Ltd. that threatened to shut down the company's BlackBerry wireless e-mail service, mobilized information technology companies. They pushed aggressively to make it easier to challenge patents and harder to win large damage awards in court.

The White House said Thursday that it opposed some provisions of the legislation, particularly one of the most contentious that would allow courts to calculate damages based on the value a patented component brings to a product rather than on the product's entire value.

Rep. Howard L. Berman, a California Democrat who has championed the legislation, promised to address the issues when House and Senate negotiators try to reconcile differences in the two bills.

Opponents complained that the bill was rushed to a vote and branded it a cave-in to information technology companies.

"This bill will weaken patent protection by making patents less reliable," said Rep. Michael H. Michaud, a Maine Democrat.

Also raising concerns are some large manufacturing companies, including General Electric Co., Corning Inc. and PepsiCo Inc., as well as some labor unions and an association of intellectual property lawyers.

Joining computer and information technology companies in support of the bills are financial services companies and some leading consumer groups, including Consumers Union.

Jim Puzzanghera writes for the Los Angeles Times.

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