Opinion: Patent reform unlikely in 2011

SAN JOSE, Calif. – The U.S. Senate's Judiciary Committee moved quickly and unanimously Thursday (Feb. 3) to approve a modified version of a controversial draft patent reform bill it released last year. But don't mistake their quick action for likely success.

The committee's leader, Senator Patrick Leahy (D-Vt.), has long been one of the biggest advocates of reform in Washington D.C. often joined by Orrin Hatch (R-Utah). This year he also secured backing from Chuck Grassley (R-Iowa).

This committee got its bipartisan act together months if not years ago. But the U.S. business community—especially the high tech sector—remains deeply divided seven ways to Tuesday on the topic.

The new draft bill contains many controversial planks, perhaps the biggest of which would be to move the U.S. from a first-to-invent to a first-to-file system to avoid long court wrangling over who did what when. Paranoia runs deep that this change will advantage big companies that can generate lots of paper.

The bill also opens to door to more wrangling over patents after they are approved in the name of improving patent quality. Specifically, it alters the so-called to inter partes review process and creates a first-window post-grant review process.

It also includes a compromise aimed at limiting damage calculations in cases of infringement and limiting the use of "willful infringement" which triggers treble damages. All these changes generally appear to favor large corporations that have the resources to challenge patents and have been targets in patent infringement suits.

So it's not surprising IBM, the world's largest patent generating corporation by far, quickly came out strongly in support of the measure, and called for its swift passage. The Senate committee said other backers include the National Association of Manufacturers, the United Steelworkers, the National Venture Capital Association and the Association of American Universities.

The Coalition for 21st Century Patent Reform, a broad lobbying group that includes some large electronics companies such as 3M and Texas Instruments, also backed the bill.

But the rival Innovation Alliance, backed by a number of typically smaller companies such as Tessera and Qualcomm, was divided on the bill. It said it disapproved of at least two amendments to the bill relating to supplemental patent examinations and business method patents.

Interestingly the Coalition for Patent Fairness, a high tech lobby group including Cisco, Hewlett-Packard, Intel and other Silicon Valley giants, has been relatively quiet on patent reform for some time.

More importantly, I suspect a broad range of serial entrepreneurs, IP companies and others will come out against this draft bill. One of the reasons they will cite is it does not go far enough in dealing with the primary issue dogging patent quality—a lack of resources at the patent office that has resulted in an historic backlog of applications.

I expect this bill, like its sister last year, will not make it to the Senate floor for debate. In the unlikely event it does, I would not expect the House to pass a bill, though it is likely to bring one up. Neither would I expect the full Congress to be able to compromise on one bill across both House and Senate.

When asked at the recent EE Times Medical Electronics Summit, veteran patent attorneys Ronald Yin of DLA Piper and Steve Baik of Orrick said they doubt reform will come in this session. There's too much on the Congressional plate and the patent debates are too deep and varied to expect any forward motion, they said.

That's my view and the views of others on this long standing debate. I welcome hearing yours in a comment below.