Tuesday, September 11, 2007

Did Howard Berman strong arm opponents of his patent reform bill, HR 1908?

Kate Ackley of the Roll Call suggested hardball tactics by Congr. Howard Berman may have produced some of the changes in position of former critics of H.R. 1908.

Of the changed positions, Ackley wrote:

Not only were Democratic leaders in the House making the vote a priority, but several key interest groups and companies who had been vocal adversaries called off their opposition - and in some cases actually offered their support. Lobbyists working in favor of the bill said that was key to Friday's eventual 220-175 victory.

In one case, a major higher education group, the Association of American Universities, dispatched a letter on Sept. 6 expressing its support for the bill while pledging to continue to work on things it found problematic. In addition, the AFL-CIO backed down from its opposition, as did companies such as Motorola.

Of Berman's influence, Ackley wrote:

...advocates for companies and groups opposed to the House-passed bill said Berman, who chairs the Judiciary Subcommittee on Courts, the Internet and Intellectual Property, used tougher tactics to sway groups. One lobbyist against the bill said "there are just as many calls that are going up to the Hill as are coming back from the Hill."
Added another lobbyist who is working on the bill: "My understanding is Berman has been pulling people in individually and saying, 'This is very important, and you have other stuff in front of me.'"

Some newspapers had earlier put a gentler spin on Berman's efforts to deal with the opponents of H.R. 1908.

Ackley included other possible reasons for the changes in the behavior of the opponents of H.R. 1908:

Several lobbyists, who spoke on background, said that some companies had changed or modified their positions as the bill advanced through the House, but more importantly, as higher-ups within the various companies weighed the bill's pros and cons.

Marc-Anthony Signorino, director of tech policy for the National Association of Manufacturers, said even though his group sees serious problems with the House bill, it is tempering its opposition so as to be included in the debate.

"Patents need to be better, and litigation abuses need to be got rid of," he said. "There hasn't been meaningful patent reform since the mid-'50s, so right now, once the books are open, this is a great time to do it. I think you're seeing a lot more folks saying we're not opposed to patent reform, we just want it to move slower."
As the action now shifts to the Senate, opponents see an opportunity to slow - and even kill - the measure there.
Kevin Kearns, president of the U.S. Business & Industry Council, which opposed the House bill, said he planned to start lobbying the Senate today to put the brakes on patent reform.
"There is massive and widespread opposition to the bill, and if the Senate thinks they're going to just roll it through, I think that's a mistake," he said. "I think we're going to be successful there."

IPBiz notes that post-grant review (opposition) is bad for small inventors and for universities. There is a bit of sophistry going on with the "second window" of post-grant review which window was more controversial than the "first window." Although the "second window" of review was removed from H.R. 1908, the separate mechanism of ex parte re-examination was beefed up so that it effectively becomes the "second window" of review. By increasing the complexity of ex parte re-examination (including oral hearings before administrative law judges), H.R. 1908 turns ex parte re-examination into a tool for larger entities to inflict economic hardship on smaller entities defending patents.

IPBiz notes of the "included in the debate" angle that Berman's hearing of February 15, 2007 made it clear that opponents of H.R. 1908 would not be included in the debate. Thus, it is difficult to see that argument as a real one. LBE had written in his full paper for "Spring Seminar 2007":

On February 15, 2007, Congressman Berman opened a hearing on patent reform with the statement that there needs to be “an effort to improve patent quality, deter abusive practices by unscrupulous patent holders, and provide meaningful, low-cost alternatives to litigation for challenging patent validity.” Those testifying that day included Adam Jaffe, a co-author of the book Innovation and Its Discontents, and Mark Myers, Co-Chair of the National Academy of Sciences' study on intellectual property (The Patent System for the 21st Century). In a hearing that was supposed to develop the case for the need for patent reform, the testimony amounted to re-presentation of old, and questionable, arguments, but no one was speaking on February 15, 2007 to present alternative analyses.

One notes that post-grant opposition and the proposed ex parte re-examination are NOT "meaningful, low-cost alternatives to litigation." They will introduce "battles of the paid experts" into partisan, higher cost versions of the current re-examination procedure.

Ackley's article did not mention the issue of damages. Frank Davies had written: Academic institutions, some small inventors and labor unions had opposed the bill. But major universities and some unions backed off their opposition after Rep. Howard Berman, the Van Nuys Democrat and chief sponsor, made changes to the damages provision.

Of apportionate of damages, Patently-O states of the current version of HR 1908:

Reasonable royalty calculations (the most common damage awards) would all require courts to conduct a thorough analysis to ensure that damages are equal to the “economic value [of the invention] properly attributable to the patent's specific contribution over the prior art.” The entire value of a product or process can only be the basis for royalty calculations if the innovation is the “predominant basis” for market demand of the product. (a showing that may be impossible in most cases). Overall this would reduce damage awards.


Blogger Oopala said...

Well, sounds like politics as usual when the author of a bill needs to make veiled threats to lobbyists in order to get a piece of legislation through Congress. This type of discussion is right on target for my audience, so I cross-posted on your piece, along with some comments, at http://blog.innovators-network.org The Innovators Network is a non-profit dedicated to bringing technology to startups, small businesses, non-profits, venture capitalists and intellectual property experts. Please visit us and help grown our community!

Best wishes for continued success,

Anthony Kuhn
Innovators Network

12:31 PM  

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