Supreme Court skeptical that U.S. patent control expands beyond borders
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(InfoWorld) - The House Committee on the Judiciary approved far-reaching legislation to reform the nation's patent system Wednesday. The Patent Reform Act of 2007 largely reflects the IT sector's lobbying effort to curtail lengthy, expensive patent infringement lawsuits, but Wednesday's committee deliberations centered on finding compromises acceptable to opponents â namely the pharmaceutical and biotechnology industries, manufacturers, and large research universities â so that the bill could win approval. Committee Chairman John Conyers, D-Mich., described the current patent system as inefficient, bogged down by inappropriate litigation rules, unreliably funded, and resulting in patents of "questionable quality."Â  The bill would make it harder to secure a patent and easier for rivals to challenge one, and it would change how courts determine an infringed patent's value.Â  However, the version approved by the committee does not go as far on any of those fronts as the IT industry would have liked, and continued negotiations are underway. "Needless to say, our journey has been rugged," Conyers said, urging members to pass the bill out of committee. "We meet here today with the realization that we haven't finished the discussions. The meetings have gone on almost endlessly in some people's minds because compromises are necessary." The proposal Conyers brought forward addresses two of the most controversial provisions under discussion:Â  How courts determine the damages paid to patent holders by infringers and whether challengers are allowed to review patents after they've been granted. Assessing damages Calling the damages provision the most complex issue, the bill's original sponsor, Rep. Howard Berman, D-Calif., said that allowing judges to determine damages by assessing the value of a component within an invention that was infringed â rather than the value of the entire product â would correct "bizarre and wrong-headed trends" in patent litigation.Â  Originally, the bill mandated that courts calculate damages by such an "apportionment" formula, which the IT industry largely supported.Â  However, the committee agreed to give judges the discretion to decide whether damages should be determined by apportionment, by the market value of the entire invention, or by other means.Â  Several committee members, including Rep. Tom Feeney, R-Fla., said they would like to see further refinement of the provision because Congress canât predict the consequences of the apportionment analysis. "It would be important to give the court flexibility," Feeney said, adding that the bill could unduly diminish the value of some patents.Â  "We are in a whole new world of uncertainty." Promoting higher quality patents In a move that would make it easier to challenge a patent without going through costly litigation â and simultaneously make it harder for inventors to secure patents â the bill allows the Patent and Trademark Office (PTO) to review patents after they've been granted. In response to concerns raised by research universities and others, however, it limits the timeframe for such review. The legislation also makes it harder to secure a patent by giving third parties more opportunity to submit information to the PTO during the application process to ensure that only innovative inventions are patented.Â  The bill moves the patent system from a "first-to-invent" to a "first-to-file" system, but in another nod to large universities, the committee clarified a grace period on filing patent applications for inventors who disclose or publish inventions in advance of seeking a patent. Discouraging excessive litigation In an attempt to reduce abuses in patent litigation and discourage frivolous cases from being filed and non-frivolous cases from being unnecessarily drawn out, two other provisions were heavily debated and amended before the bill was approved: The ability of alleged infringers to charge patent holders with "inequitable conduct," and the patent holder's flexibility in selecting a venue for a case. Currently, alleged infringers can argue that a patent is invalid on the grounds that the holder did not sufficiently disclose information about an invention and thereby engaged in inequitable conduct. The often-used tactic is widely seen as a way to divert attention from the merits of the patent itself.Â  The bill narrows the circumstances under which this defense could be used and gives courts a range of options to remedy such conduct when it is found.Â  In an effort to curb forum shopping, the bill restricts patent holders to four options when choosing a venue to file a suit in.Â  However, the bill provides leeway for individual inventors, universities, and "micro entities" to bring patent cases where they reside. Noting that members of Congress cannot predict the consequences of the sweeping reform legislation, Rep. Sheila Jackson Lee, D-Texas, proposed requiring the PTO to conduct periodic studies of the impact of the most controversial provisions.Â  The proposal was enthusiastically approved. The Senate Judiciary Committee is scheduled to continue deliberating its version of the patent reform legislation Thursday.
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Copyright law doesn't always win the day.  The U.S. 10th Circuit Court of Appeals' ruling in Golan v. Gonzales is a major victory for the First Amendment and the overwhelming majority of creators.
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Supreme Court case could have a wide impact on consumer software prices abroad.
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The Supreme Court is ready to hear from lawyers from Microsoft and AT&amp;T as it considers a long-running patent dispute between the industry giants.
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Research in Motion lost part of the case on appeal, but it&#39;s not over until it&#39;s over. Specifically, the patent infringement finding against the maker of the email device was upheld by the appeals court.
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(InfoWorld) - 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. Since late July, three labor unions -- the AFL-CIO, the International Federation of Professional and Technical Engineers (IFPTE), and the United Steelworkers -- have sent letters to lawmakers saying they oppose two current patent reform bills. Patent reform opponents say they hope their alliance with organized labor, which has a long history of supporting Democrats, will stall the legislation. But representatives ofÂ large tech vendors that are pushing for patent reform say they're confident there will be support for the legislation when Congress returns from summer recess in early September. The committees in both the Senate and the House of Representatives approved versions of a sweeping patent reform bill in July, and House leaders have targeted the patent reform bill for passage by the end of the year. "I think the momentum exists for this thing to move forward," said Joshua Ackil, vice president of government relations for tech trade group the Information Technology Industry Council (ITI). "As folks [in Congress] dive in a little deeper on this issue, they will come around and understand how important patent reform is to the tech sector." In recent sessions of Congress, then-majority Republicans were tugged in two directions when they focused on patent reform bills similar to ones introduced in the current session of Congress. Several high-profile Republicans pushed for patent reform, and won praise from many large tech vendors, but the Republican friendly pharmaceutical industry was staunchly opposed to the bills. By enlisting labor unions, patent reform opponents are trying to put Democrats "in the same situation the Republicans were in," said Ronald Riley, president of the Professional Inventors Alliance, which represents small inventors. Riley's group, along with the American Ingenuity Alliance and other groups, have focused getting unions to back their cause in recent months. Riley portrays patent reform as enabling large tech vendors to steal the ideas of small inventors. "We're tired of these transnationals ripping off our people's work," he said. "We're just warming up." Tech vendors including Microsoft Corp., IBM Corp., and Cisco Systems Inc. have argued that the U.S. Patent and Trademark Office (USPTO) too often approves questionable patents, and that it's too easy for patent holders to sue, collect huge damages and shut down product lines that have a small infringing piece. In many cases, patent lawsuits are brought by companies that make all their money by owning patents, critics have said. Cisco spends US$45 million a year defending itself against patent lawsuits, Matt Tanielian, director of government relations for the company, said during a forum in June. "There's a lot of bad patents out there," he said. "When you get sued, you ought to get a fair shake." The letters to Congress from the AFL-CIO and the United Steelworkers focused on two controversial sections of the patent reform legislation in both the House and the Senate. The two groups objected to the way the legislation would change how courts apportion damages when a company is found to infringe a patent. Currently, courts generally consider the value of the entire product when a small piece of the product infringes a patent, but supporters of the bills want Congress to base damages only on the value of the infringing piece. The groups also questioned how the legislation would allow a new way of challenging patents after they're issued, called post-grant review. The bills would allow companies sued for patent infringement a new way to file challenges with USPTO. Representatives of the of the AFL-CIO and United Steelworkers didn't return messages or declined to comment on their recent interest in patent reform. But the AFL-CIO letter alluded to recent efforts of the U.S. government and the U.S. tech industry to prod China to strengthen its intellectual property protections. These two changes "may have a negative impact on innovation and research," the AFL-CIO letter said. "At a time when the Chinese government is constantly being challenged to live up to its intellectual property obligations, we do not want to take actions that may weaken ours." The United Steelworkers letter said nearly 70 percent of patents filed in the U.S. come from manufacturing firms. "These bills would allow an endless loop of legal challenges after patents are awarded that will make it more difficult for U.S. patent holders to prevail against frivolous challenges," the letter said. ITI's Ackil and representatives of two other tech groups said they doubted the unions' opposition would kill patent reform, although Ackil acknowledged that "anyone should be concerned" with opposition from large labor groups. Ackil and a representative of another tech trade group, who spoke on background, questioned the depth of the opposition from the labor unions. "The AFL-CIO has been nowhere on this issue for three years," Ackil said. Democrats knew of the labor concerns before the House Judiciary Committee approved the patent reform bill, added a spokesman for Representative Howard Berman, a California Democrat and primary sponsor of the House patent bill. "Weâre working now to try to understand and deal with any concerns labor may have," said spokesman Gene Smith. "We think that labor will not be opposing the bill when it comes to the floor soon after the House returns from recess." But the labor opposition could lead to changes in the bills, said Bill Mashek, a spokesman for the Coalition for 21st Century Patent Reform, a group that has opposed parts of the current patent bills. "Laborâs voice in the debate is significant and influential," Mashek said. "It shows, in our view, that the bill needs further work to ensure that U.S. manufacturing and innovators have the incentives to invest and develop new products. The concerns of ... organized labor resonate with members across the country and of all political stripes."
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It's not business as usual: the two partners could be headed to court over alleged patent infringements and, depending on the outcome of their dispute, may choose to go their separate ways.
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Doubts over charges against a US firm underscore concerns about the legal system and foreign investment.
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Wine, the Internet and the notion of free interstate trade were before the US Supreme Court in a case closely watched for its implications on e-commerce, viticulture and the regulation of alcohol sales.
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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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Import injunction sought while patent violation case pends
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Experts say the move could lead to suits against the U.S. or private companies.
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Nanotechnology is confronting the U.S. with a familiar problem - assessing claims of innovation that do not match up neatly with the way patent examiners are trained to categorize them.
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Opposing sides say the ruling on an upcoming Supreme Court case might encourage dangerous driving - or increased use of force.
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The U.S. Supreme Court heard  arguments in a dispute between LG Electronics Inc   and Quanta on Wednesday that will either expand or contract the  rights of a patent holder.
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Setting ground rules for competition is one thing, but seeking to determine outcomes is another. In European antitrust, there is more a doctrine of âreining inâ powerful companies than in the United States.