SAN JOSE, Calif. – In the face of opposition from large and small high tech groups, U.S. Senators backing patent reform have passed a handful of significant changes to a draft bill now being debated in Congress.
Senator Patrick Leahy (D. Vt.), who has been driving patent reform since 2005, submitted a laundry list of amendments on March 1 including four major changes to the current S.23 draft bill. The changes would end the diversion of patent office fees to the general federal fund and strike provisions aimed at limiting infringement damages and use of courts seen as friendly to claims of infringement.
Leahy said the amendments were suggested or approved by as many as four Senators and two members working on a separate bill in House of Representatives. The amendment passed in a late Tuesday afternoon vote.
The amendments come as the Coalition for Patent Fairness--a lobby group made up of Silicon Valley giants including Apple, Cisco, Google, HP, Intel and Oracle--said it would not back the bill. The draft also faced opposition from the IEEE-USA, several small business groups and a vocal serial entrepreneur.
The Leahy amendment offers something to each of the opposing sides.
The Patent Fairness group did not like the draft bill's provisions on damages and infringement and its language on a so-called inter partes re-exam. It shared a concern with the IEEE-USA, small business groups and others in the need to let the patent office keep all the funds it generates from fees to attack a backlog of applications.
Currently, the patent office needs to return to the general fund any fees it generates over its set annual budget. The current S.23 draft lets the patent office set its own fees, but does not end the practice of fee diversion.
The patent office said if it gets the so-called fee-setting authority it will work with its public advisory board and patent stakeholders to determine new fees.
It is not clear if the updated bill will win back support from the various high tech groups. Even if it does, the Senate and House both have to pass separate bills and reconcile them before the changes become law. The complexity of the issues and the competing sides will make that work difficult.
Specifically, the Leahy amendment strikes from the draft bill language about choosing the venue for patent infringement cases and how judges instruct juries about determining damages. Details in the bill about court venues only served to echo decisions already made in U.S. Circuit court, Leahy said.
The amendment would create a pilot program to review the validity of business method patents with a temporary, limited proceeding at the patent office. In June, the Supreme Court dodged a decision about whether business method patents were valid.
The amendments do not address concerns about a shift to a first-inventor-to-file (FITF) system. Small business groups and inventors such as Perlman said the provisions would spark a race to the patent office that would advantage big corporations. Perlman claimed the language of the measure was "obtuse" and unconstitutional.
Some sides have taken issue with what they say is a reduced grace period for filing under FITF that could disadvantage small companies. A spokesman for the patent office disagreed.
"The FITF system is a simpler, more secure and cost-effective standard that removes the false sense of security propagated by the notion that under the current first-to-invent system filers believe a delay in filing will not affect them," a patent office spokesman said.
"The proposed system still requires proof that the applicant was in fact the inventor—so non-inventors could not file and would not incite a blind race to the patent office," the spokesman said. "Under the FITF system, an individual and small entity inventor will secure greater clarity and claim to his or her rights by filing in a timely way, and ensure that the public has a timely disclosure of the discovery," he added.