Patent Reform Bill Advances in Senate Committee

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The U.S. Senate Judiciary Committee has voted to approve a compromise version of a bill that would overhaul the U.S. patent system, potentially making it more difficult for patent holders to successfully sue alleged infringers for huge damages.

The committee on Thursday voted 15-4 to approve an amended version of the Patent Reform Act and send it to the full Senate for a vote.

Groups on opposite sides of a long-running debate over patent reform praised the committee for coming up with a compromise. Several large tech vendors have pushed Congress to change U.S. patent law for years, saying patent law is outdated and it's too easy for patent holders to collect huge damage awards for an invention that makes up a small piece of a tech product.

But some small inventors, small tech vendors and pharmaceutical companies have opposed major changes to U.S. patents, saying changes could water down the value of patents and allow competitors to steal their intellectual property.

The Software and Information Industry Association (SIIA) praised the committee's vote. "This is significant progress toward maintaining America's global competitiveness, creating jobs here at home, and modernizing the U.S. patent system," the trade group said in a statement.

SIIA praised the lawmakers for clarifying how patent damages should be calculated and for focusing on patent quality. The bill would allow the U.S. Patent and Trademark Office (USPTO) to set patent fees, potentially giving the office more money to work with.

The Coalition for Patent Fairness, representing tech vendors such as Intel, Google and Microsoft, called the compromise bill "an important step forward in the process of revising our patent law to reflect the realities of the modern economy."

"The bill begins to address the flaws in the patent litigation system that allow patent abusers, companies that do not produce or invent anything, to force our country's most innovative companies to divert billions of dollars away from innovation and job creation into litigation costs and hold-up settlements," the coalition's statement said.

The Biotechnology Industry Organization (BIO), which was urging changes to the bill as of early last month, also praised the new version.

"We are optimistic that we will now see meaningful patent reform that preserves the incentives necessary to sustain America's global leadership in innovation and spurs the creation of high-wage, high-value jobs in our nation's innovation economy," BIO President and CEO Jim Greenwood said in a statement. "While no compromise is ever perfect, we believe the committee's product breaks the logjam on the major issues that have held up patent reform for the past several Congresses and will clear the path for a bill to be completed without undue delay."

The bill would limit the factors that juries could use to determine damages, based on only the factors determined by judges. Several groups have protested the effort to limit patent awards, and critics have complained that this provision gives too much power to judges.

The bill also allows expanded re-examinations of existing patents, and requires that patent lawsuits be filed in court districts where the plaintiff or defendant is located. Patent critics have long complained of hundreds of patent cases that were filed in a Texas district court known for being friendly to patent holders.

The bill also would require the USPTO to award patents to the first person to file for an invention, the standard most of the world uses, instead of the more difficult to determine, first person to invent.

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