Tech Vendors Disagree on Patent Reform
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Represantatives from Texas Instruments and AmberWave Systems say proposed legislation goes too far in overhauling the patent system.
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Conflicts with European law, they say A group of small British businesses has mounted a challenge to changes made by the Intellectual Property Office's (formerly known as the Patent Office) to the scope of the monopoly a patent holder can be granted for a software patent.â¦
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Companies on both sides of a patent overhaul debate in the U.S. Congress are stepping up the pressure on lawmakers, as some observers expect a vote soon in the Senate.Two groups, one supporting patent legislation before the Senate and one against it, held dueling media briefings on patent reform on Capitol Hill Thursday. Members of the Coalition for Patent Fairness, including lawyers from Hewlett-Packard, Cisco Systems, and SAP, said they see broad support for the Patent Reform Act in the Senate and hope senators will soon&#160;follow the House of Representatives&#39; lead and pass the bill.The coalition sent a letter to Senate leaders Wednesday, calling on them to pass the Patent Reform Act. The bill will &quot;benefit all American workers and American consumers,&quot; said the letter, signed by 128 companies and organizations, including Amazon, Dell, eBay, and Intel.But another group, the Innovation Alliance, sent a letter to Senate leaders Tuesday urging them to reject the legislation.&quot;No compelling case has been made for a bill written in this fashion,&quot; read the Innovation Alliance letter, signed by 430 companies and organizations. &quot;It is based on claims of a crisis in the current patent system that does not exist, supported by selective assertions which do not hold up under scrutiny.&quot;Among the companies and organizations signing the Innovation Alliance letter were the Institute of Electrical and Electronics Engineers-USA, the NanoBusiness Alliance, Cargill, Coca-Cola, and Qualcomm.Both the House and Senate versions of the Patent Reform Act would overhaul the U.S. patent system, but two pieces of the legislation have generated the most controversy. The bills would create a new way to challenge patents after they&#39;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.Those changes would create uncertainty about the validity of patents and drive venture capital money away from innovative companies, said Joe Kiani, CEO of Masimo, a medical equipment vendor in Irvine, Calif.Combined with recent U.S. Supreme Court rulings, including one limiting the use of injunctions by plaintiffs in patent infringement lawsuits, the Patent Reform Act would significantly decrease the value of many patents, argued Kiani and other participants in an Innovation Alliance forum.The bill &quot;opens the way for other countries like China to bring technology here that will be a fraction of the cost and will be copies of our technology,&quot; Kiani said.Panelists at the Innovation Alliance forum said they&#39;d support patent reform that gives more money to the U.S. Patent and Trademark Office (USPTO), allowing examiners to better research patent applications. &quot;We support prudent patent reform,&quot; said Sean Murdock, executive director of the NanoBusiness Alliance, a trade group representing nanotech companies. &quot;Simply stated, the current bill, in its current form, is not prudent.&quot;But members of the Coalition for Patent Reform, in a press briefing a couple of hours later, said Congress needs to fix problems with &quot;patent speculators&quot; suing established companies. The Supreme Court rulings and more money for the USPTO aren&#39;t enough, said Tim Crean, chief intellectual property officer for SAP.In the past two years, the Supreme Court has ruled on several patent issues, including a case involving eBay. In May 2006, the court overturned a long-term U.S. court practice of issuing injunctions against infringing products in nearly all patent cases.Despite the Supreme Court rulings, the number of patent lawsuits continues to grow, said Crean and Michael Holston, general counsel for HP. This year is shaping up to be a record year for patent lawsuits, Holston said.The coalition found about 625 patent lawsuits in 20 selected U.S. district courts in 1990. Through Sept. 30, the same 20 courts have seen about 1,550 patent lawsuits in 2007, the coalition said.HP will spend about $75 million defending against patent lawsuits this year, Holston said. More than half of those lawsuits come from patent &quot;speculators&quot; -- companies that buy patents for the purpose of filing lawsuits, he added.The patent system is &quot;being exploited through litigation games,&quot; added Mark Chandler, general counsel for Cisco.
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(InfoWorld) - In the wake of a recent landmark Supreme Court ruling, patent reform is bubbling toward a boil on Capitol Hill, where advocates in both parties and both chambers are urging timely action on pending legislation and contending with well-financed interest groups on both sides of the issue. "This is a big fight about winners and losers," said Sen. Tom Coburn, R-Okla., adding that he is not entirely satisfied with the pending Patent Reform Act of 2007, which was introduced in the Senate in April. "The question is how do we strike the balance." The Patent Reform Act legislation would make the requirements for obtaining a new patent more stringent, make it easier for rivals to challenge patents, and reduce the penalties for patent violations. Committee chairman Patrick Leahy of Vermont said that he, Sen. Orrin Hatch, R-Utah, and a number of other colleagues have been working on the nonpartisan bill for several years and that the existing patent system was designed for a bygone era. A decision by the Supreme Court in April in the case of KSR International vs. Teleflex marked a major clarification of the court's thinking about the granting of patents for new inventions and set a higher bar for what qualifies as an original invention. The ruling has already prompted legal wrangling between VoIP vendor Vonage in its ongoing dispute with Verizon over Internet telephony patents, and legal experts say that the ruling was a direct rebuke to lower courts that have tended to favor patent owners over those challenging the legality of patents that have been issued. Despite strong support from Democratic and Republican leaders in both chambers for change in the patent system, however, passage of the bill into law is not assured.Â  IT behemoths, including Cisco, Apple, Dell, HP, Microsoft, and Oracle, have aligned as the Coalition for Patent Fairness to press for the sweeping changes envisioned in the bill. They maintain that reforms are necessary to reduce costly, sometimes frivolous litigation. However, other technology companies, including InterDigital Communications and Qualcomm, have banded together as the Innovation Alliance and joined the biotechnology and manufacturing sectors to limit changes to the system. They argue that the bill would give patent infringers an advantage. The high stakes involved in the patent issue were illustrated June 6 at a hearing of the Senate Committee on the Judiciary, which was briefly delayed as committee aides tried to locate an extra room for the overflowing crowd. "What we're trying to do here is move the process forward," Sen. Orrin Hatch said in an appeal to lobbyists for compromise once the hearing got started. "There are a number of organizations who could stop this bill." The bill's two main sticking points are a provision that would give the public a new opportunity to review patents after they've been granted, and a provision granting the right for an immediate appeal to the Court of Appeals for the Federal Circuit after a district court has made a pre-trial ruling on the framework that will be used to determine infringement (known as a "claim construction"). Large IT companies and the financial industry support the "post-grant review" of patents, which would allow for a reevaluation of suspect patent claims before companies are forced to go through lengthy, costly litigation, John Squires, chief intellectual property counsel at Goldman, Sachs & Co., told the committee. Opponents countered that the proposed post-grant review process would create an essentially limitless opportunity for rivals to challenge patents. "If a patent can be easily challenged at any time under a low standard of proof, (then) patents will have much less value, and investment predicated upon them will inevitably be diminished," Kathryn Biberstein, senior vice president of Alkermes, a biotechnology company, told the committee in her testimony. "This, in turn, will likely result in fewer cures for diseases and other breakthrough biotechnology products." The biotech industry and the Innovation Alliance also oppose the right for an immediate appeal after a claim construction ruling, arguing that it would encourage appeals, further prolonging cases. But advocates, including Palm senior vice president Mary Doyle, said it would reduce the chance of conducting unnecessary trials and cut down litigation costs. The witnesses were eager to raise two other controversial provisions in the legislation, regarding how damages in patent cases are determined and the expansion of the Patent and Trademark Office's authority to make rules. Doyle and Squires, supporting the bill's "mandatory apportionment" of damages provision, told the committee that damages today can be unreasonably high because the calculation is based on the value of an entire product, not just the patented feature at issue. Countering that argument, Biberstein and Bruce Bernstein, chief intellectual property and licensing officer at InterDigital, said that the provision would replace today's market-oriented valuation of inventions with subjective jury findings. Debate on expanding the PTO's rulemaking authority mirrored the rest of the patent debate with representatives from the financial sector and the Coalition for Patent Reform joining forces in support, while witnesses from the biotechnology sector and the Innovation Alliance cautioned against the change. An identical House version of the Patent Reform Act is pending, having recently won approval by the House Judiciary Subcommittee on Intellectual Property. Leahy said he is eager to prepare the legislation for a vote by the Senate Judiciary Committee, but he did not indicate when that vote might occur.ADVERTISEMENTIBM Information On Demand 2006Industrial Industry Leaders, please join us at IBM's premier information management global event, IBM Information On Demand 2006, October 15-20, Anaheim, CA. More IBM business and technical solutions content in one place than ever before! Select from  over 800 sessions. Register today!
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At two tech-focused gatherings yesterday, industry companies, lobbying groups and politicians mulled over the IT industry's legislative agenda, including concerns about a move to force companies to expense stock options.
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The printer maker's courtroom setback may mean consumer electronics companies won't try to use the Digital Millennium Copyright Act as an all-purpose competition shield anymore. By Katie Dean.
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Ziff Davis - Opinion: It's time for other Linux vendors to follow Red Hat's lead and offer patent infringement protection to their customers.
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By Kara Rowland, The Washington Times  Sep. 14--A U.S. technology trade group yesterday accused the European  Union of declaring a "war on innovation" through its antitrust and regulatory  policies.   At a Capitol Hill press conference, Rep.
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(InfoWorld) - Patent reform legislation before the U.S. Congress would kill the value of patents and allow companies from other countries to steal U.S. intellectual property, a group of inventors said Thursday. About 20 inventors and U.S. company executives, visiting Washington, D.C., encouraged Congress to defeatÂ the Patent Reform Act, a version of which passed the House of Representatives earlier this month. The Senate has not yet voted on its version of the bill. The legislation "will weaken the patent system," said Dean Kamen, inventor of the Segway and the AutoSyringe. "It will devalue patents. It will be a disincentive for people to invest in the future." Several large tech vendors, including Microsoft, IBM, and Cisco, support the legislation, which would allow courts to change they 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, and the legislation would allow courts to base damages only on the value of the infringing piece. The legislation would also allow a new way to challenge patents after they've been granted. Supporters say the bill is needed because patent infringement lawsuits have gotten out of hand. It's too easy for patent holders to sue and collect huge damage awards when a small piece of a tech product is found to infringe, supporters argue. Microsoft this month praised the House passage of the legislation, saying lawmakers voted to "support American innovation and to preserve incentives for progress." But Peter Volanakis, president and COO of Corning, said the legislation would be an invitation for its competitors in Asia to repeatedly challenge his company's patents. "This encourages infringement, plain and simple," he said. "It is much easier to infringe patents with this legislation." The patent reform legislation would also "undermine" Corning's ability to invest in new products, Volanakis added. Steve Perlman, inventor of WebTV and lead developer of Apple's QuickTime, said he was surprised to learn of the legislation when he read of the House passage of the bill. As he's begun to contact lawmakers about his opposition to the legislation, their staffers are "stunned" to hear of tech startups that are opposed to the bill, Perlman said. Small inventors and startups were mostly ignored during hearings on the bill, Perlman added. One of the goals of the bill is to harmonize U.S. patent laws with the rest of the world. But the U.S. now has the best environment for startups and entrepreneurs, Perlman said. "I don't want to have the startup economy they have," he said. "I want the one we have." Perlman, founder and CEO of Rearden, and Kamen, founder of DEKA Research & Development, both said changes to the U.S. patent system are needed. But the legislation largely doesn't address the real needs -- more patent examiners and more money for the U.S. Patent and Trademark Office, they said. Perlman has a patent he applied for five years ago still awaiting examination, he said. "Let's first make the system we've got today work the way it's supposed to work," Perlman said. Congress should also wait to see the effects of a May 2006 Supreme Court ruling, in which justices overturned the long-held practice of issuing injunctions against infringing products in nearly all patent cases, Perlman said. That ruling should have a large effect on so-called patent trolls, he said. "There already has been a huge change" in U.S. patent law because of the Supreme Court ruling, he said.
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Blog: The companies are about to face off in a federal appeals court over their ongoing patent dispute.
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Blog: Measure calls for the most sweeping changes to U.S. patent system in decades, but its path forward could be jeopardized by lingering reservations from other sectors, including venture capitalists and biotech.
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(InfoWorld) - Technology industry executives are pushing the U.S. Congress to reform the way patents are issued in order to process them more quickly while also making sure they are legitimate. Patent reform was one of the major issues discussed at the Tech Policy Summit Monday in San Jose, California. Patent reform legislation considered, but not passed, in Congress last year is expected to be reintroduced. Among the key provisions sought is the hiring of more patent review specialists by the U.S. Patent and Trademark Office, which one critic at the conference said has a backlog of as many as 1 million applications. Another provision would make it more difficult for so-called patent "trolls" to acquire a patent, claim another company infringed on it and then force the company to pay a settlement in order to keep its business going. Lastly, reform advocates seek an improvement in the quality of patents, pointing to cases where patents are issued for innovations that are not unique. They also propose a post-patent review process. In a speech Monday night at the summit, Deborah Platt Majoras, chairman of the U.S. Federal Trade Commission, endorsed the idea of post-patent review. "Patents are not a driver of innovation, they are an impediment to innovation," said Mark Lemley, a professor of law at Stanford University Law School, speaking at the summit. "Everyone has an example of silly patents, such as the cat exerciser laser pen," Lemley said, but the problems with the patent law are more serious than that. Often, one company asserts a patent right against another company and forces that company to stop production until the patent issue is resolved. "The patent holdup forces the company to settle for more money than the patent is worth," Lemley said. There are also delays in the process of approving patents. SAP AG, the enterprise software maker, once had to wait 44 months until a patent application was approved, said Tim Crean, chief intellectual property officer and a member of the Coalition for Patent Fairness, an industry group advocating reform. An official of the U.S. Patent and Trademark Office said the agency is planning to hire 1,200 patent specialists in fiscal year 2008. The patent office receives half of its patent applications electronically and wants to increase that number. Last year it approved 350,000 patents. But some at the summit want Congress toÂ move cautiously on patent reform. A group called the Innovation Alliance was recently formed to protect companies that patent technology but don't manufacture it. Taraneh Maghame, vice president and emerging technologies counsel for Tessera Technologies, said attempts to limit the rights of companies to defend patent rights could harm legitimate patent protection efforts of some companies. Tessera develops chip packaging technology and licenses it to chip manufacturers, such as Intel. "Not all of the tech industry is behind patent reform," Maghame said. Close to 300 people, including tech executives, advocacy groups and government officials, were expected to attend the Tech Policy Summit, which continues Tuesday.
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BRUSSELS, Belgium - The future of controversial European Union legislation that would allow for some software patents was in doubt Thursday after the Polish government switched sides, saying the directive could hurt small and medium-sized businesses.
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Patent reform legislation before the U.S. Congress would kill the value of patents and allow companies from other countries to steal U.S. intellectual property, a group of inventors said Thursday.
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As debate on patent reform began this morning on the floor of the US House of Representatives, twelve amendments made their way through the Rules Committee, all of which appear to be designed to tweak the bill's language rather than insert any "poison pills" that would ensure its failure.
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There's a brawl brewing as Congress works up the most sweeping overhaul of the patent system in half a century.
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Opponents of legislation that wouldÂ overhaul the U.S. patent system have enlisted new allies who may cause majority Democrats in Congress to rethink their support of the proposals.