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June 12, 2007

not all senators patently incompetent; politicians seeking to delay patent reform act

www.internetnews.com and www.pcworld.com  both reported today that several republican senators are seeking to delay 2007 patent reform act.  Senators Sam Brownback (KS), Tom Coburn (OK), Chuck Grassley (IA), Jon Kyle (AZ), and Jeff Sessions (AL) reportedly sent a letter to Patrick Leahy (VT), Chairman of the Judiciary Committee, seeking more time to “work through certain issues.”

The Patent Reform Act of 2007 would convert the U.S. system into a “first to file” system by repealing § 291, make it more difficult to obtain punitive damages for willful infringement, limit actual damages to the “economic value properly attributable to the patent’s specific contribution over the prior art,” and make it far easier to challenge the validity of a patent after issue.

According to an unsurprisingly self-serving press release by Senator Leahy, the proposed legislation will promote “an efficient and streamlined patent system to allow for high quality patents that limits counterproductive litigation.”

But will this really be the result?  It seems more likely that the Act will shift the balance of power to those with the largest pocket books.  For example, the legislation will devalue patents by limiting actual and punitive damage awards and by making it easier to invalidate an issued patent.

Rather than reducing litigation, by making it easier to challenge patents, the Act will shift the balance to encourage infringers, or at least alleged infringers, to initiate litigation to invalidate patents they’d rather not license.  The reduced damage awards will also make it more difficult for smaller patent holders to enforce their rights by making it less likely that attorneys will accept cases on a contingent fee basis.  Similarly, when a patent is challenged by a company with extensive resources, many patent holders will be unable to afford to properly defend their patents, very likely resulting in essentially “default” invalidations of at least some patents that should be valid.

Fortunately for smaller patent holders, it appears that these senators were persuaded by some larger companies that have realized the effect of this “reform” may be to devalue patents on a large-scale basis.

For another post noting the delay, and questioning the purported need for the Patent Reform Act in light of the recent KSR opinion, check out J. Matt Buchanan’s post at www.promotetheprogress.com.

Posted by Eagle H. Robinson at 04:32 PM.
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