House OKs changes to patent law

The House on Friday approved the most sweeping changes to U.S. patent law in more than half a century in a victory for computer and finance companies such as Microsoft Corp. and Goldman Sachs Group Inc.

The legislation, approved in a 220-175 vote, would make patents harder to obtain and easier to challenge. It also would seek to curtail litigation by limiting where patent owners can file suit and how much they can collect in damages if they win.

"There have been abusive practices that have grown up in the area of patents and certain inefficiencies," said Judiciary Chairman John Conyers, a Democrat from Michigan. "These have been addressed with great care."

Approval came after last-minute changes to appease critics, including the Bush administration, labor groups, universities, and drugmaker Pfizer Inc., which said the original proposal went too far in weakening patent rights and might hurt investment in new technologies and cost American jobs.

White House spokesman Tony Fratto had no immediate comment on whether the changes were enough to garner administration support.

Democratic Representative Howard Berman of California, lead sponsor of the House proposal, said more changes to address complaints will come as the proposal goes through the Senate and when the House and Senate meet to reconcile the two measures.

Even with the amendments, the measure faced opposition from manufacturers including Caterpillar Inc., drugmaker Eli Lilly & Co. and consumer-products maker Procter & Gamble Co. Opponents said the measure favors certain industries over others.

"It is a horror story for American inventors and a windfall for thieves," said Republican Representative Dana Rohrabacher of California. "Foreign and domestic technology thieves are licking their chops."

Democratic Representative Marcy Kaptur of Ohio said the measure "makes it easier for infringers to steal U.S. inventions."

Intense lobbying has surrounded the issue, reflecting the importance of patents to the U.S. economy. U.S. intellectual property, dominated by patents, is valued at as much as $5.5 trillion, according to a 2005 study by USA for Innovation, a Washington group that advocates free trade. That's more than 40 percent of U.S. gross domestic product.