Software Companies Want Patent Reform by Congress

The Business Software Alliance wants the U.S. Congress to pass a patent reform bill and executives at the trade group say they're optimistic that the legislation will move forward in the Senate soon.

Patent reform heads up a list of five legislative priorities the trade group released Thursday. The BSA wants Congress to approve the Patent Reform Act, which the House of Representatives passed back in September, but the legislation has been stalled in the Senate due to objections from inventors, pharmaceutical companies and some small tech firms.

Revisions Stuck

The Patent Reform Act would overhaul the U.S. patent system. Among other things, it would create a new way to challenge patents after they've been granted, and it would allow courts to change the way they assess damages in patent-infringement cases. Currently, courts generally consider the value of the entire product when a small piece of the product infringes a patent. The legislation would allow courts to base damages only on the value of the infringing piece.

That so-called apportionment of damages provision has been a major hang-up for the bill in the Senate. But Robert Holleyman, BSA's president and CEO, said the Senate may be moving toward passage of the bill in the coming weeks. Some changes may still happen to the bill, he said.

"We are optimistic it will be considered in the Senate, and we are optimistic that the final solution will address the inadequacies in the current patent system that have been well identified," Holleyman said.

Many large tech vendors, including BSA members Microsoft, Symantec and Apple, say it's too easy for patent holders to claim that a small piece of a tech product infringes a patent and to collect huge court awards. But some small tech vendors, independent inventors and pharmaceutical companies have opposed the Patent Reform Act, saying it would water down the value of patents and give small companies fewer protections against large companies that steal their ideas.

Late last month, more than 170 California businesses and organizations sent a letter to California's senators, saying they opposed the Patent Reform Act in its current form. "California's high-tech industries lead the world in innovation across numerous sectors," the letter said. "The cutting edge research they do is extremely risky and expensive, and strong patent protections form the basis upon which they are able to attract the investment necessary to commercialize a new product. This is especially the case for the hundreds of smaller, venture capital-backed firms in the state, many spun out of California's world-class research universities and private research institutes."

The Patent Reform Act would "increase costs to obtain and maintain patents, undermine patent certainty, incentivize infringement, and weaken the enforceability of patent rights and intellectual property protections," said the letter, signed by companies such as GlaxoSmithKline, California Wireless and Mi5 Networks.

But the U.S. patent system is "antiquated," BSA countered. "The Senate can take a giant stride toward stimulating innovation, spurring job growth, helping consumers and boosting U.S. competitiveness by completing action" on the patent bill, the group said in a position paper released Thursday.

Chief technology officers of several BSA members will come to Washington, D.C., next week to lobby for patent reform and other issues.

Other Priorities

Among the BSA's other legislative priorities:

-- Legislation that protects consumers' data while providing a technology-neutral framework for businesses that handle such data.

-- Funding for the U.S. Federal Bureau of Investigation to improve its IT focused on intelligence gathering, counterterrorism and information sharing.

-- Support for free trade agreements, which have come under fire in the U.S. presidential race, particularly from Democratic Senator Barack Obama. For most BSA members, more than half of revenues come from outside the U.S., Holleyman said.