Patent reform bill goes to Senate

SAN JOSE, Calif. — In a sometimes heated hour-long session, a congressional committee agreed to send a newly amended patent reform bill to the full Senate for a vote. The move marks a big step forward for the bill (S.515) which is still likely to face a significant battle in the full Senate.

Senators Patrick Leahy (D.-Vt.), Dianne Feinstein (D-Calif.) and Arlen Specter (R-Pa.) led the 15-4 vote in the Senate Judiciary Committee. The trio successfully amended the bill to include a compromise they struck Tuesday (March 31) on issues including patent infringement damages.

Senators Orrin Hatch (R-Utah), Jon Kyl (R-Ariz.) and Tom Coburn (R-Okla.) opposed the bill. They called for more time to consider a wide range of issues including post-grant reviews, inequitable conduct, willful infringement and fee diversion.

Specter said response to the trio's compromise "has been uniformly positive from stakeholders." He specifically called its provisions on post-grant reviews as "integral to bringing all parties together on a complex set of compromises, and if it is changed the parties will be back" to renegotiate the bill, he said referring to an amendment from Kyl that the committee rejected.

"There was a very broad split [of industry opinions] and I think that split has been healed" by the compromise, said Feinstein, although she suggested provisions on inequitable conduct could still be amended on the Senate floor.

Feinstein read statements supporting the trio's compromise from industry, legal and academic groups including the American IP Law Association, the Coalition for 21st Century Patent Reform and biotech and pharma groups.

Separately, the Coalition on Patent Fairness—a group which includes Silicon Valley giants such as Apple, Cisco, HP and Intel--released a statement backing the compromise.

The new amendment strikes language requiring apportionment, a way of calculating damages based on the fraction of a products value an infringed patent represents. The coalition backed apportionment as a way to limit what it claims are rising litigation cases and damage awards.

In a statement, the coalition said "the bill begins to address the flaws in the patent litigation system" by setting new limits on venues where infringement cases can be held and adopting a provision to have judges act as gatekeepers, providing juries guidance on damage awards.

The group also praised the bill's move to a first-to-file rather than first-to-invent patent system. The shift is expected to favor large companies with large patent engineer staffs, but has been opposed by individual inventors and small companies.

The Business Software Alliance—a group including many Patent Fairness members as well as Adobe, IBM, Synopsys and The Math Works--released a similar statement backing the proposed bill.

It asked senators to consider several future amendments including "ensuring the first-to-file system is fair to those who have made use of technologies before they became the subject of a patent." It also called for a final bill that would be tough on the issue of inequitable conduct.