Hatch, Cannon push patent bill

The coalition sent a letter to leaders on the House and Senate Judiciary Committees on June 27, saying the bill's passage is "critical if we are going to restore balance to our patent system and allow innovation to flourish unfettered by current rules that degrade patent quality and encourage gaming of the system."

The impetus of the bill and its surrounding debate is the rising trend of patent lawsuits. Someone claims a company has violated a patent that he or she already has for a particular item and then sues the company. If a judge finds the patent has been violated, juries can award millions of dollars in damages that the company then has to pay.

"Right now, it's viewed as a lottery ticket," said David Simon, chief patent counsel for Intel Corp.

Intel is one of the top six patent holders in the United States and has given campaign contributions to Hatch and Cannon.

Simon said some senior engineers at Intel are not doing design work anymore but instead helping him deal with technical details in lawsuits filed against the company. This not only stops research and development into the next great product, but money that needs to pay for damages also must come from somewhere.

"R&D usually suffers," Simon said.

If passed as it stands now, the bill would change the rules so damages awarded from a lawsuit "fairly correspond to the value of the infringed patent," according to the Coalition for Patent Fairness.

Simon, like other supporters of the bill, uses a car windshield wiper as an example. He said damages awarded in a case should only reflect the value of the wiper, not the entire car. The bill also would reserve tripling damages only to cases with major willful infringement of a patent.

The bill would also allow federal reviewers at the U.S. Patent and Trademark Office to take a second look at approved patents and the public can give the patent office information on patents to help with the process.

Simon also said it is impossible for a company — or a reviewer at the federal patent office — to look through every existing patent for an application, and changes called for through the bill will help.

This Coalition for 21st Century Patent Reform, which includes Dow Chemical, Motorola, Corning, ExxonMobil, Astra-Zeneca, Cephalon, Eli Lilly and other companies, opposes the pending bill because it "decreases incentives and protections for innovation and may, however unintentionally, encourage some of our trading partners with long histories of disrespect for U.S.-developed intellectual property such as China, Russia and India to do likewise."

Mashek said the proposed "post-grant review," which allows the patent office to review a patent after it has been awarded, opens up a second window for objections that can tie up patents for years.

This coalition also has problems with limiting court-awarded damages for patent infringement because it "tilts the balance in favor of infringers," Gary Griswold, president and chief IP counsel of 3M Innovative Properties Co., told Congress in April.

Congress is on recess this week for the Fourth of July holiday, but Cannon and Hatch will have to tackle the bill again once they return.

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E-mail: suzanne@desnews.com