SAN JOSE, Calif. The U.S. patent system is shifting under a building head of political steam. But just what all the changes and their fallout will be is still unclear, given the lack of coordination among those driving the changes in Congress, the courts and the patent office itself.
The House passed a broad and controversial patent reform bill on Sept. 7 that aims to raise the quality of patents and reduce patent litigation and abuse. A companion bill could come before the Senate within a month, setting up a tussle among legislators, lobbyists and the administration on a final bill.
Some critics have already slammed the House legislation. For one thing, they said, a handful of decisions in the past year from the nation's top courts have already rendered some of the legislation's mandates redundant or unnecessary. For another, the patent office-which some say should be the main focus of change-rolled out a handful of new rulings itself in August.
After years of discussion, the idea of patent reform is at last "coming together-but no one is talking about what the long-term impact will be and whether the pendulum will move too much to one side," said patent attorney Allen Baum, president of the Licensing Executive Society (LES), a 6,000 member cross-industry group of managers who deal with patents.
The issues related to patent reform are so varied and so complex, Baum said, that LES been unable to develop d a unified position on the matter. "We have people on all sides of these issues," he said.
A representative of one major electronics company said tracking the various reform efforts has become a full-time job for multiple people at the company.
At Ocean Tomo LLC (Chicago), a banking and consulting firm that launched the first patent auctions last year, CEO James Malackowski complained that there has been "virtually no" coordination in Washington on patent reform. In a recent paper, Malackowski called for a cabinet-level position on intellectual-property (IP) policy and enforcement.
"There needs to be leadership from the White House regarding what the president wants to see in terms of intellectual-property policy, and it has to be more than just saying that innovation is good," he told EE Times.
Jon Dudas, director of the United States Patent and Trademark Office (USPTO), countered that the administration has had conversations on patent reform with "scores of legislators," including sponsors of the latest House and Senate bills. White House representatives have also held talks on patent reform with a dozen judges from a wide range of districts, he added.
But "there will be more discussions," Dudas said, "because this is a work in progress. We will go back and forth with senators and their staffs, and we have shown them our draft language" for a final bill.
Some reformers are tackling the growing problem of so-called patent trolls-companies that exist purely to buy and enforce patents. In some cases, especially in electronics, such operations have netted huge settlements.
"People have gotten tired of paying all this money" in patent licensing and infringement suits, said Baum of LES.
The number of patent lawsuits heard in U.S. District Courts doubled between 1988 and 2001, from 1,200 to nearly 2,400, according to a report from the National Research Council. Meanwhile, the number of patent attorneys in the United States rose 39 percent-more than six times the growth rate overall for attorneys, the report found.
Both the patent office and the legal system have been under increasing strain. The USPTO has a backlog of as many as 750,000 patent applications.
The problem came to national prominence when a small patent company sued Research in Motion, claiming the BlackBerry phone infringed its patents. Legislators, who widely use the phones, got a wake-up call when court proceedings threatened an injunction on BlackBerry e-mail service.
"All of a sudden, every legislator had a personal experience of patent litigation," said Baum.
While attention is currently focused on Capitol Hill, a number of decisions by the Supreme Court and federal appeals courts have already made inroads on patent reform, particularly in the area of limiting damage awards.
"The best patent reform in the last few years has come out of the court system," said Michael Barclay, a partner and patent attorney with Wilson Sonsini Goodrich and Rosati (Palo Alto, Calif.).
A Supreme Court ruling in an eBay case last year limited the use of injunctions in cases such as the one involving the BlackBerry. A case involving Microsoft and AT&T struck down the practice of granting damages for sales outside the United States. And a case involving Seagate Technology raised the standard of proof for "willful infringement," which carries a penalty of treble damages.