Biotech Values

[DewDiligence]

US Senate Passes Patent-Overhaul Bill

[Now it’s on to the House. Please see #msg-60150853 and the chart in #msg-37325719 for background.]

http://online.wsj.com/article/SB10001424052748703560404576189153930311330.html

›MARCH 9, 2011
By SIOBHAN HUGHES

WASHINGTON—The Senate overwhelmingly passed legislation Tuesday to overhaul the U.S. patent system, reviving a long-stalled effort and raising industry hopes that the biggest changes to patent laws in almost six decades could soon be enacted.

The 95-5 vote capped a six-year effort, and came amid a Democratic call for the country to innovate its way out of high unemployment—and concerns that China, which has said it issued a record number of patents in 2009, would gain another edge over the U.S.

"If we're going to win the global competition by out-innovating the rest of the world we need a patent system that works in the 21st century," said Senate Judiciary Committee Chairman Patrick Leahy (D., Vt.), who shepherded the legislation through the Senate.

Under the measure, the U.S. would shift to a "first to file" patent-rights system from a "first to invent" system. It marked a victory for big companies seeking to reduce legal challenges; a number of such companies, including Caterpillar Inc., 3M Co. and General Electric Co., formed the Coalition for 21st Century Patent Reform to push for the overhaul bill. But passage was a blow for small entrepreneurs, who say they lack the resources to rush applications to the U.S. Patent and Trademark Office.

The Patent Office would also gain power to set its own funding, a move that is likely to mean higher application fees but also greater resources to process an application backlog that exceeds 700,000.

The bill passed only after lawmakers dropped the thorniest issue: whether to narrow damages paid for infringing on a patent. By dropping the damages provisions, the legislation essentially leaves the matter of where to set damages up to the courts.

The result is a less-ambitious bill that also stands a greater chance of clearing the House of Representatives and becoming law.

"While it would be good to address inefficiencies like outsized damages, the surviving aspects of this bill such as ending the practice of diverting money from the U.S. Patent and Trademark Office, instituting new processes focused on improving the quality of granted patents, and empowering the Office to set fees to hire more examiners and upgrade infrastructure are all positive and necessary steps," said Lewis Lee, a lawyer at Lee & Hayes, which represents large patent filers including Microsoft Corp., Boeing Co., Intel Corp. and Goldman Sachs Group Inc.

The House Judiciary Committee plans to introduce and vote on its own bill in the coming weeks, and the office of House Majority Leader Eric Cantor (R., Va.) said patent legislation is clearly on the agenda.‹