Hatch Predicts Patent Reform Victory

A Utah Republican claims Congress is closer to approving patent reform than ever before. Tech companies claim excessive infringement damages are killing innovation, while large manufacturers and pharmaceutical firms contend large damage awards barely even cover the litigation costs of multiyear infringement.

High tech hopes U.S. Sen. Orrin Hatch is correct. The Utah Republican, co-sponsor of a patent reform bill before Congress, predicted March 18 the initiative long sought by Silicon Valley will finally see success in the 111th Congress. The reform effort has failed in the last two sessions of Congress, primarily from fierce opposition by traditional manufacturing, pharmaceutical interests and unions.

Speaking at the National Press Club March 18, Hatch said passage of the controversial measure is closer to passage than ever before and that he would be "shocked" if it didn't. "I think we're close to it," Hatch said.

While many issues in the patent overhaul fight have been worked out by all parties from the years of debate, the issue of damages remains a main point of contention. High-tech companies want the damages formula in patent infringement lawsuits gutted; traditional manufacturing and pharmaceutical firms like it just the way it is.
The bills introduced in both the House and Senate would more narrowly define willful infringement, determining infringement damages in relation to the economic value of the patent's contribution to an overall product. Currently, infringement damages are based on the entire value of the product.
"We may be closer to reaching consensus on language regarding damages and venue than ever before," Sen. Patrick Leahy, co-sponsor the Senate bill along with Hatch, said March 10.
The members of the U.S. Business and Industry Council think otherwise, perhaps underscoring the lingering opposition.
"These bills, under the mantle of 'reform,' will actually severely damage U.S. international competitiveness and threaten most American businesses -- along with the jobs they create -- by undermining America's historically strong intellectual property rights," the trade group wrote March 18 in a letter to lawmakers. "Downgrading patent rights -- which are fundamentally property rights -- will seriously constrict innovation and the ability of domestic manufacturers to turn good ideas into products consumer want, and thus good jobs for working Americans."
In the 110th Congress, the House approved patent reform, but the legislation never gained traction in the Senate. The House vote came after six years of debate and more than 20 hearings.