Microsoft Advocates for Patent Reform

The Redmond software giant is launching a campaign to bring some major changes to the U.S. patent system.

Microsoft went public on Thursday with a number of proposals designed to overhaul the U.S. patent system and make it better suited to the software industry.

Microsoft general counsel Brad Smith presented Microsofts proposed reforms during a day-long seminar at the American Enterprise Institute for Public Policy Research in Washington, D.C.

Microsoft has a vested interest in patent reform. In 2004, the company filed 3,000 new patent applications.

At the same time, company officials acknowledge that Microsoft is among the largest targets of patent litigation in the country. Microsoft is spending close to $100 million annually to defend against an average of 35 to 40 simultaneous patent lawsuits, according to Microsofts data.

Microsoft is still fighting the $520 million jury verdict that was awarded to Eolas Technologies on the grounds that Microsoft had infringed its Web browser technology patents, for example.

Microsoft is attempting to move the debate beyond a black-and white, for patents/against patents one, Microsoft officials said. And now that the company has put forth some initial suggestions, it plans to seek out potential allies, ranging from individual tech vendors, to the Business Software Alliance, Chamber of Commerce and National Manufacturers Association, to join forces in seeking patent reforms.

Among the patent changes Microsoft proposed:

  • Halt the diversion of fees earmarked for the U.S. Patent and Trademark Office (PTO) to other government uses.
  • Allow third parties to submit "prior art" information to patent examiners during the patent process itself, rather than only after a patent has been issued.
  • Allow third parties to challenges patents "administratively," rather than just through litigation in order to help weed out questionable patents, as currently is permitted in Europe.
  • Create a special court that would consolidate and hear all patent cases at the federal district level in order to improve consistency and predictability of patent litigation.
  • Reform the standard used to measure "willful infringement," via which claimants are currently allowed to collect treble damages.
  • Increase "harmonization" and collaboration across international boundaries.
  • Move to a "first-to-file" system, rather a "first-to-invent one," thus following the patent procedures to which most other countries adhere.

"We want the system to be more predictable and efficient," said David Kaefer, Microsoft director of business development.

Several of Microsofts suggestions are far from new.

"Many of these proposed reforms are positions that have been debated heavily in recent years, especially relating to the congressional diversion of patent fees from the PTO, and world harmonization by granting patents to the first person or company to file a patent application rather than the first to actually invent, as is currently the case only in the U.S. said David Ferrell, chairman of the Carr & Ferrell LLP law firms intellectual property practice group.

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