Thursday, May 17, 2007

Patent Reform Act of 2007 voted out of subcommittee

An article in ComputerWorld noted that the Patent Reform Act of 2007 [HR 1908] was voted out of the subcommittee by voice vote. One notes that the emphasis on "what's important" in the bill has shifted from things like "patent quality" to "apportionment of damages," perhaps the real driver here. ComputerWorld noted:

Several large tech vendors, including IBM Corp., Cisco Systems Inc. and Microsoft Corp., have pushed for patent changes, arguing it's too easy for patent holders to collect huge damages when a small part of an IT product is found to infringe a patent. But small inventors, pharmaceutical companies, and some small tech vendors have opposed the bill, saying many of the changes would allow large competitors to infringe patents without meaningful penalties.

In this, we're NOT talking about "bad" patents, but "how much" infringers pay who violate "good" patents. So, maybe, we are finally seeing the "true colors" of the debate.

The issue of post-grant review came up in the ComputerWorld article:

Several subcommittee members questioned a provision that would allow a nearly unlimited window for patents to be challenged after being granted by the U.S. Patent and Trademark Office.


Tom Feeney also raised concerns about the bill's provision allowing post-grant opposition to patents during the entire life of a patent. "In order to encourage continued investment in innovation, patent holders must have certainty of their idea after a reasonable period of time," he said.

The issue ComputerWorld is talking about is the so-called "second window" of post-grant review, in which a cancellation (opposition) proceeding can be brought AT ANY TIME during the life of a patent.

IPBiz thought of yesterday's release from the Coalition for Patent Reform: Leading legal scholars and economists have spoken out in support of patent reform and opinion-leading publications, including The Wall Street Journal, New York Times and Los Angeles Times, have editorialized in support of passing patent reform legislation without delay. The problem is that these "opinion-leading publications" won't print BOTH sides of issues in patent reform.

The FIRST ITEM brought up in the Coalition's press release was:

Balance the apportionment of damages. The standard for calculating damages should be based on the fair share of the patent’s contribution to the value of a product, and not on the value of a whole product that has many other components.

A classic example of the issue is the violation of a patent on the radio of a Mercedes-Benz. Are damages calculated on the value of the whole car? On the flip side, if the infringement is of such a minor item, why doesn't the infringer simply substitute or design around? If no substitution is done, is the contribution "minor"? This is truly a tough issue, but it simply has nothing to do with "patent quality," the issue which brought us to this dance.

See also
Mark-up on Patent Reform Act of 2007

See also Getting the Patent Reform Wars on Track and Post-Grant Opposition: a Bad Idea . You won't find these issues discussed in The Wall Street Journal, the New York Times or the Los Angeles Times.


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