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June 6, 2007
Not Its Time
Single-mindedness
was not on the agenda. Legislation in the making, and only the sausage maker
beams and winks knowingly as too many patent chefs stir the gumbo. The thankful
result of today's Senate hearing is watching the Patent Reform Act of 2007
appear the statutory tub of lard that it is.
Behemoth computer companies IBM, Microsoft, HP, and like-minded wanna-be's like PDA maker Palm cobbled together the "Coalition for Patent Fairness" to gut patent enforcement. Two aspects of the proposed legislation are post-grant review and damages apportionment, both strongly supported by the Coalition.
Computer software companies in particular are bothered by frequent patent suits, and strive to make patent infringement a more tolerable expense. Mary Doyle, Palm IP counsel, told the Senate that "an industry of patent speculators has grown up almost overnight." In fact, patent licensing companies and contingency law firms have been around at least since Thomas Edison's day, but bogeyman carping from computer companies has raised their profile in recent years. The perjorative "patent troll" was coined by Peter Detkin in 2001, when he was IP guy at Intel, fed up with fighting off patent licensing companies. Detkin is now a patent troll.
Post-grant review would wipe out the presumption of patent validity. There are serious business implications as well as legal. "If a patent can be easily challenged at any time under a low standard of proof, (then) patents will have much less value, and investment predicated upon them will inevitably be diminished," Kathryn Biberstein, senior VP of Alkermes, a biotech company, testified before the Senate. "This, in turn, will likely result in fewer cures for diseases and other breakthrough biotechnology products."
Damages apportionment is a patently bad idea, as proven by history, chronicled in the Patent Prospector, seconded by CAFC Chief Judge Michel.
The 2007 bill, introduced in both houses of Congress in April, is a retread of similar bills in the last two legislative years, sharing many provisions, such as first-to-file, though the mix has changed somewhat.
Though some sections, including first-to-file, and eliminating the current grace period, should be non-controversial, there is a vested interest for everything. America is the only country in the world with a first-to-invent regime, which is a complication embodied by the need for the patent agency to maintain an appeal board for interferences, where parties may swear back from their filing date to an invention date. In litigation, first-to-invent, and the grace period, create uncertainty as to the date at which prior art kicks in to demonstrate that the claimed invention wasn't accomplished by the patentee.
Post-grant review is a bald admission that the patent office is hapless. It is a pathetic statement that the PTO itself is so enthused about it, though wanting it done in a way as to not divert agency resources; a mea culpa of incompetence by agency management. The examiner corp is quite capable of rigorous examination if only examiners were given the time to do their jobs properly.
With all the reform hubub in the air, examination has toughened in the past few years, making the "junk patent" argument as raison d'état for reform bunk. Stephen Schreiner at Goodwin Procter doesn't think the quality situation justifies reform. "There's always going to be an error rate. [The patent office] is applying its standards very rigorously - more rigorously than before, I think."
Other provisions of the bill target litigation cost, albeit perversely. The bill aims to limit venue shopping, where plaintiffs seek district courts better able to handle complex patent cases. Limiting choice is the worst of possible alternatives, if an alternative is even considered necessary.
Many provisions, particularly those supported by the Coalition for Patent Fairness, rig the patent system towards large corporations with deep pockets who are serial patent infringers, and away from inventors, universities and other entities struggling to monetize their inventions.
On the eve of the House version of the bill coming before the full committee, Congressman James Sensenbrenner Jr., the sole member of the House Judiciary Committee to vote against letting the bill out of subcommittee, wrote a letter yesterday to Committee Chairman John Conyers, citing ten issues "that have received little or no debate:" views from the bench (CAFC), and the USPTO, the director having whined today in Senate hearings about agency workload; non-profits and universities; small business and the venture capital industry, which to date had been shut out from offering input; manufacturers, opposed to the bill, but ignored so far; emerging industries such as nanotech; the agriculture industry, having concerns, also ignored; the impact abroad, notably China - Sensenbrenner suggests the bill would "unwittingly contribute to overseas competition" by reducing "intellectual property protections domestically"; the upshot from Supreme Court rulings in KSR, eBay, and MedImmune; and the impact on domestic employment, the proposed legislation having provisions that Sensenbrenner figures "will contribute to continue off-shoring of American jobs".
Senator Orrin Hatch, channeling Rodney King in pleading for consensus where none is to be had, lamenting lawmakers as rudderless dinghys, craven toads to special interests, himself included: "There are a number of organizations who could stop this bill."
Posted by Patent Hawk at June 6, 2007 8:22 PM | The Patent System