But the bill, which is similar to legislation Hatch co-sponsored in the last Congress, basically pits software and technology companies against biotech and pharmaceutical companies, which want different types of changes.

Cannon explained that a drug may involve up to five patents, while technology products such as a laptop, cell phone or MP3 player can have thousands of patented components. The drug companies want "great clarity" on the patents, while the technology companies want a simpler method of paying damages if they have to as a result of lawsuits, he said.

Industry's reaction

David Kappos, IBM's vice president and assistant general counsel for intellectual property law, supports the bill, saying it is a "step in the right direction."

But Pharmaceutical Research and Manufacturers of America senior vice president Ken Johnson said he is disappointed that the proposal does not include all the reforms the National Academy of Sciences has recommended in the past. PhRMA would not go into detail yet about its concerns about the bill, saying it is too early in the process.

Among its several provisions, the bill creates a new option for people who want to challenge a patent. Currently, they either go through a re-examination by the U.S. Patent and Trade Office, which has been deemed ineffective, or go through federal district court, which can take a long time and become expensive, according to the bills' sponsors.

The proposal would allow a new Patent Trial and Appeal Board within the U.S. Patent and Trade Office to handle patent reviews that would normally go to federal court.

Kappos said this would be a good provision because it would be much less expensive and quicker and would avoid clogging up the federal district courts with patent cases.

The twin bills also would allow the public to submit information to the U.S. Patent and Trade Office regarding pending patent applications.

Kappos said there have been instances in which IBM has seen applications for inventions the company's own staff may have already come up with or were in the process of studying, but under current law there is no way for the company to tell the government.

The new process created in the bill would allow the public to advise the patent office whether a pending invention was different enough to earn its own patent or is too similar to something already invented.

With millions of patents, it is becoming more difficult to pinpoint what is already out there, Kappos said. Try to imagine being the employee that has to figure out whether a tiny electronic component has already been patented, he suggested. The bill allows others to help in the process.

Infringement damages