US Senate Begins Debate on Patent Reform
The U.S. Senate is debating an overhaul of the nation's patent system this week, but several technology groups have opposed the bill, saying it would hurt innovation and overload the U.S. Patent and Trademark Office.
Supporters of the Patent Reform Act, due for a Senate vote this week, say it would improve the quality of patents issued by the USPTO and would reduce huge infringement awards in patent lawsuits.
"This bill, if we do it right, will create millions of new jobs," Senate Majority Leader Harry Reid, a Nevada Democrat, said Tuesday on the Senate floor.
Others disagreed. Even though the tech industry has long called for patent reform, the bill would be worse than the "status quo," said Ed Black, president and CEO of the Computer and Communications Industry Association. "On the whole, it will inhibit the technology sector and impede future reform," Black said in a statement.
The bill is similar in many ways to controversial patent reform legislation that has stalled in Congress in recent years. It would direct the USPTO to award patents to the first inventor to file for a patent, instead of determining the first person to create a new invention, putting the U.S. in step with most of the rest of the world.
"The first-to-file provision will be a gold mine for attorneys and the largest portfolio holders, but the result will burden rather than promote innovation," Black added.
Several large technology vendors, including Intel, Microsoft and Apple, have been pushing for patent reform for years, spurred by several multimillion-dollar patent infringement awards from U.S. courts in recent years.
The bill, sponsored by Senator Patrick Leahy, a Vermont Democrat, would allow outside parties to file information related to patent applications, potentially allowing outsiders to challenge patent applications, and it would create new ways to challenge patents after the USPTO has awarded them. It would narrow the ability of patent holders to collect multimillion-dollar damage awards, and it would allow the USPTO to set its own fees for patents.
The bill enjoys bipartisan support in the Senate and from President Barack Obama's administration. The bill "represents a fair, balanced, and necessary effort" to improve patent quality, improve the USPTO and "offer productive alternatives to costly and complex litigation," the White House Office of Management and Budget said in a statement released Monday.
The bill will improve U.S. competitiveness and add jobs, the OMB said in its statement.
The USPTO needs more resources, Leahy argued Tuesday. The agency has a backlog of 700,000 patent applications, with another 500,000 being currently examined, he said on the Senate floor.
"Among [the backlogs] could be the next medical miracle, the next energy breakthrough," he said.
But in late February, nine organizations representing small businesses, inventors and engineers sent a letter to senators urging them to reject the bill. The first-to-file patent rule would hurt small businesses and inventors, who don't have the resources to file quickly, said the letter, signed by the Institute of Electrical and Electronic Engineers-USA (IEEE-USA), the National Congress of Inventor Organizations, and the National Small Business Association.
The first-to-file provision "disrupts the unique American start-up ecosystem that has led to America's standing as the global innovation leader -- the ecosystem that is vital to our businesses, but with which large firms have less expertise," the letter said. "The bill disadvantages companies that must seek outside financing and strategic partners, in favor of firms that can arrange all of their investment, testing, manufacturing, and marketing internally."
The groups called for a "streamlined" bill focused on increased funding for the USPTO. "If (and only if) increased examination quality does not result from increased funding and operational oversight, should Congress revisit broader patent reform," the letter said.
Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is email@example.com.