The technology sector scored a significant legislative victory Friday afternoon as the House of Representatives approved the first significant overhaul of patent law in a half a century. The big win, however, may be short-lived as the legislation moves to the Senate.
Approved on a 225-175 vote that crossed party lines, the Patent Reform Act of 2007 (H.R. 1908) narrows the definition of willful infringement and limits infringement damage awards to the actual value of the technology involved instead of the overall value of the a completed product.
The bill also creates a “second window” to challenge patents issued by the Patent and Trademark Office. In addition, the legislation would create a first-inventor-to-file system to replace the current first-to-invent standard, moving the United States closer to international patent standards.
Even though the bill was approved by the House, supporters of the legislation promised opponents that further changes are likely to be made as the bill moves to the Senate, particularly the key provisions on damage awards and the chance at second reviews of issued patents.
If the bill wins approval in the Senate even more compromises are expected as the biotechnology, pharmaceutical and manufacturing industries weigh in with their strong opposition to major provisions in the bill. The White House has also indicated it is opposed to significant changes in the awarding of damages.
“We admit this bill isnt perfect,” said bill co-sponsor Howard Berman, D-Calif., chairman of the House Courts, Internet and Intellectual Property Subcommittee. “This is really complicated stuff. We will continue working for compromise.”
Berman noted that criticism of the rapid movement of the bill this year through House took place after six years of debate and more than 20 hearings. “This is not a rush to judgment, not a rush to legislate. We started down this path a long time ago.”
Rep. John Conyers, D-Mich., chairman of the House Judiciary Committee, called the bill a work in progress. “We made changes to accommodate the minority side and it wont be final until we come out of conference [with the Senate].”
Opponents to the bill, led by Reps. Dana Rohrabacher, R-Calif., and Marcy Kaptur, D-Ohio, contentiously argued that the legislation wasnt ready for prime time.
“This bill weakens the rights of American inventors and will facilitate the theft of American inventions by countries like China, Japan and India,” Rohrabacher said, opposing a provision in the bill that would publish patent applications before they are actually issued. “I call this the Steal American Technologies Bill.”
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House Approves Patent Reform
Rohrabacher repeatedly made references to “powerful and arrogant” companies determined to change the patent system. Kaptur was more specific: “This bill heavily favors big tech, some of the worse infringers in the country. The bill gives too much power to big tech, trans-national companies.”
Not surprisingly, technology groups rushed to praise the House action.
“We are very pleased, this is a good sign for technology,” Mark Bohannon, senior vice president of public policy for the Washington-based Software & Information Industry Association, told eWEEK in an interview after the House vote. “Its really a significant step. We havent seen it happen before.”
As for the tech bashing, Bohannon added, “Weve heard it for a number of years from those who dont want to change the law. Really, we heard nothing new.”
Roger Cochetti, group director of U.S Public Policy for the Computing Technology Industry Association, said in a statement, “With the [bill], U.S. large and medium-sized IT companies will be better fortified to protect their hard-earned inventions from poachers and trolls, fostering more product innovation that is developed on our shores, and boosting jobs stateside.”
In a statement, Business Software Alliance President and CEO Robert Holleyman called the House vote historic. “This much needed legislation would drive innovation that will benefit consumers for generations to come,” he said.
Microsoft said in a statement that it “supports a balanced, effective patent system that drives innovation, opportunity and growth for both inventors and users of technology. Today, the members of the U.S. House of Representatives voted to support American innovation and to preserve incentives for progress in our nations patent system.
Weighing in from the other side, the Coalition for 21st Century Reform, which represents manufacturers and pharmaceutical companies, said the House vote favors infringers over inventors.
“We are sending an international message that patented American technology may now be copied with little or no consequence,” the group said in a statement. “This is the wrong time to send this message.”
The Coalition added, though, that it believes consensus legislation is still achievable. “In that regard, during todays debate, we were encouraged that the bills sponsors agreed to address several areas of concern, including the damages provisions, as the legislation works it way through the process,” the group said.
Berman said during the floor debate he intends to continue to work with opponents, but final House passage was important.
“Doing nothing is not a good answer for a Congress that wants to keep this economy growing,” he said.
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