Patent pending

SAN JOSE, Calif.--The winds of change blowing through Washington D.C. are fanning the fires of patent reform.

The U.S. Senate is expected to re-introduce patent reform legislation soon while the Federal Trade Commission is already holding hearings on the topic. And President Barack Obama is expected to name a new head of the U.S. Patent and Trademark Office (PTO), the flash point for many calling for reform.

The number of patent applications has risen steadily to almost 500,000 a year, creating a backlog of more than 1.2 million at the PTO. The office has been hiring more than 1,000 examiners a year--and losing as many as 600 a year--in its efforts to catch up.

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Many big tech companies, including Cisco Systems, Hewlett-Packard and others represented by the Coalition for Patent Fairness, are pushing hard for patent reform, citing the rising costs of IP claims against them. The threats and suits often come from companies that exist solely to license sometimes questionable patents, the companies say.

Smaller licensing companies such as Dolby Labs, Qualcomm and Tessera represented by the competing Innovation Alliance say proposed reforms will only weaken the patent system and slow innovation. The Coalition for 21st Century Patent Reform, a separate group of mainly medical and pharmaceutical companies, has a roughly similar agenda, although the dynamics of how patents play out in its sector of the industry is significantly different.

In rough terms, it's a three-legged stool of competing agendas, though "a dozen or so organizations and individuals are active in debate," said Taraneh Maghame, vice president of government affairs for Tessera, one of the founders of the Innovation Alliance.

"It's a negotiation between the companies who own the channel to the market and the innovator companies," said Kevin Rivette, author of "Rembrandts in the Attic" and chairman of the PTO's advisory committee. "That's been a source of tension since day one of the patent system, and it's why the system swings back and forth."