Senators fine-tuning patent bill

In the wake of a recent landmark Supreme Court ruling, patent reform is bubbling toward a boil on Capitol Hill, where advocates in both parties and both chambers are urging timely action on pending legislation and contending with well-financed interest groups on both sides of the issue.

"This is a big fight about winners and losers," said Sen. Tom Coburn, R-Okla., adding that he is not entirely satisfied with the pending Patent Reform Act of 2007, which was introduced in the Senate in April. "The question is how do we strike the balance."

The Patent Reform Act legislation would make the requirements for obtaining a new patent more stringent, make it easier for rivals to challenge patents, and reduce the penalties for patent violations.

Committee chairman Patrick Leahy of Vermont said that he, Sen. Orrin Hatch, R-Utah, and a number of other colleagues have been working on the nonpartisan bill for several years and that the existing patent system was designed for a bygone era.

A decision by the Supreme Court in April in the case of KSR International vs. Teleflex marked a major clarification of the court's thinking about the granting of patents for new inventions and set a higher bar for what qualifies as an original invention. The ruling has already prompted legal wrangling between VoIP vendor Vonage in its ongoing dispute with Verizon over Internet telephony patents, and legal experts say that the ruling was a direct rebuke to lower courts that have tended to favor patent owners over those challenging the legality of patents that have been issued.

Despite strong support from Democratic and Republican leaders in both chambers for change in the patent system, however, passage of the bill into law is not assured. 

IT behemoths, including Cisco, Apple, Dell, HP, Microsoft, and Oracle, have aligned as the Coalition for Patent Fairness to press for the sweeping changes envisioned in the bill. They maintain that reforms are necessary to reduce costly, sometimes frivolous litigation.

However, other technology companies, including InterDigital Communications and Qualcomm, have banded together as the Innovation Alliance and joined the biotechnology and manufacturing sectors to limit changes to the system. They argue that the bill would give patent infringers an advantage.

The high stakes involved in the patent issue were illustrated June 6 at a hearing of the Senate Committee on the Judiciary, which was briefly delayed as committee aides tried to locate an extra room for the overflowing crowd.

"What we're trying to do here is move the process forward," Sen. Orrin Hatch said in an appeal to lobbyists for compromise once the hearing got started. "There are a number of organizations who could stop this bill."

The bill's two main sticking points are a provision that would give the public a new opportunity to review patents after they've been granted, and a provision granting the right for an immediate appeal to the Court of Appeals for the Federal Circuit after a district court has made a pre-trial ruling on the framework that will be used to determine infringement (known as a "claim construction").