SAN JOSE, Calif. Opponents in the ongoing patent reform debate squared off in the U.S. Senate Tuesday (March 10) in a hearing that put a spotlight on their chief bone of contention—how to calculate damages in patent infringement cases. Senators pressed six witnesses--including representatives from IBM, Micron and Tessera--to come up with a compromise.
"I won't vote for a bill unless there can be reconciliation between the parties," said Sen. Dianne Feinstein (D-Calif.), recalling a contentious meeting on the issue in her office in April 2006.
"Everybody is so genteel here today, but they were like tigers coming out of a cage at that meeting," she said.
Sen. Arlen Specter (R-Penns.) pressed each witness to suggest compromise language about damages. "I think we can work out the other issues if we come to a correct formulation on damages," he said.
Witnesses suggested some alternatives, but they could not come to a consensus on the complex and controversial issue.
Big computer and communications companies want to limit the number of patent infringement cases and damages they face. They back the bill (S.515) introduced last week that calls for apportionment, a means of limiting damages to the proportion of an end product's value represented by an infringed patent.
Opponents say the bill would diminish the value of patents and invite more infringement. Both sides referenced competing studies showing their approaches would save jobs and bolster innovation in technology.
Without apportionment, companies could be forced to pay damages that "exceed the total amount of revenue on a product," said Steve Appleton, chief executive of Micron Technology and a member of the Coalition on Patent Fairness that backs the bill.
Micron spent $30 million defending against patent infringement suits last year, money that could have created 450 jobs at the company, Appleton said. He referenced a new study from the coalition that concludes the current bill could help create 100,000 jobs over five years.
Opponents noted that the U.S. has a leading position as an exporter of intellectual property rights, earning some $62 billion in licensing and royalties in 2008. The revenue, and the jobs behind it, would come under threat if Congress adopts apportionment, they said.