Damages key to patent reform debate

A crack in the door on damages
The two sides of the debate sent mixed signals on the extent to which they are open to negotiations. In the last debate, the opposition suggested a so-called "gatekeeper" concept, giving judges more latitude to instruct juries on how to reach a damages settlement based on the specifics of a case.

"It's our position that apportionment is unacceptable, but we would be willing to discuss the gatekeeper concept," said Michael Biber, vice president of IP strategy at Dolby Labs and a member of the Innovation Alliance.

In a press statement, Sen. Leahy said the damages language in the new bill is identical to the past legislation where the provision was "the most hotly debated topic." But he also cracked open a door on the issue.

"While I strongly support this language, I am prepared to continue the conversation and debate from the last Congress in order to find the best language we can," he said.

"We affirm our willingness to work with all interested parties," said Robert Holleyman, chairman Business Software Alliance that backs the new bill.

Others sent signals that there may be less flexibility in their positions.

The gatekeeper idea "is not a new concept," said Bruce Sewell, a general counsel for Intel and member of the Patent Fairness group. "There's nothing problematic about [employing that technique], but it doesn't go far enough," he added.

"What's being suggested to us is everything in this bill is negotiable except damages," said Findley of Corning. "It's my view that everyone else in this bill can be worked out," he added.

Among other concerns, opponents said the new bill still provides for new challenges to a patent's validity after it has been granted. Under some circumstances, third parties could potentially call for a re-examination of a patent for its entire life, said one attorney.

The bill also calls for the U.S. to switch from its current practice of granting patents to the first to invent an idea, adopting a first-to-file approach instead. The provision is aimed at bringing the U.S. into harmony with other patent offices around the world. However, individual inventors have said the provision favors large companies.

The provision is one of the few in the bill specifically intended to address the needs of the patent office which is facing a enormous backlog of applications.

"When Congress last overhauled the patent system in 1952, the patent office received approximately 60,000 patent applications; in 2006, it received 440,000," Leahy said.

In addition to Leahy, the new bill was sponsored by Senators Orrin Hatch (R-Utah), Chuck Schumer (D-N.Y.), Mike Crapo (R-Idaho), Sheldon Whitehouse (D-R.I.), James Risch (R-Idaho), and Kirsten Gillibrand (D-N.Y.). The House version was sponsored by John Conyers (D-Mich.) and Lamar Smith (R-Texas).