Tech, drug companies battle over patent reform
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U.S. lawmakers returning from their summer break are expected to consider patent law changes that have pitted two of America's most invention-dependent industries against each other.
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Two professors argue that seemingly innocuous reforms have caused a shift away from encouraging innovation in favor of exploiting patents largely for lawsuits.
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The legislation, supported by technology and financial services companies, would make patents harder to obtain and easier to challenge.
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Bristol-Myers Squibb struggles to keep growing amid patent expirations.
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Technology and financial services firms won a key patent reform victory Friday when the House approved legislation the industries have pushed for years by a vote of 220-175.
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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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(InfoWorld) - The U.S. House of Representatives hasÂ passed a bill to overhaul the nation's patent system, overcoming objections by many Republicans, small inventors and some labor unions. Passed on Friday, the Patent Reform Act,Â supported by several large tech vendors including Microsoft and IBM, 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; the bill would allow, but not require, courts to base damages only on the value of the infringing piece. The bill would also allow a new way to challenge patents within one year after they've been granted. The HouseÂ passedÂ the ActÂ by a vote of 225-175. The Senate has not yet acted on a similar piece of legislation. However, the White House Office of Management and Budget (OMB) issued a statement on Thursday saying it opposes the bill. It said that the changes in assessment of damages would "introduce new complications and risks reducing incentives to innovate." The OMB objections raise the possibility that President George Bush could veto the legislation. Large tech vendors have been pushing for patent reform for close to five years. The Software & Information Industry Association (SIIA), the Business Software Alliance, and the Computing Technology Industry Association, all praised the House for passing the bill. House passage is a "significant step toward improving our patent system," said Mark Bohannon, SIIA's senior vice president of public policy. Asked about the OMB's opposition to the bill, Bohannon said recent changes have addressed many concerns. Apportionment of damages, one of the OMB's major concerns, needs to change, he added. "If we don't address the problem, we're not going to improve the system," he said. Many Democrats and some Republicans argued 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 argued. The patent system "is getting near broken," said Representative Howard Berman, a California Democrat and primary sponsor of the bill. "Doing nothing is not a good answer for a Congress that wants the economy strong." Opponents argued the bill favors tech giants at the expense of small inventors. "The legislation ... helps a small group of powerful people," said Representative Dana Rohrabacher, a California Republican. Representative Marcy Kaptur, an Ohio Democrat, noted that between 1993 and 2005, four major tech vendors supporting the bill paid out US$3.5 billion in patent infringement settlements. But those same unnamed tech vendors had revenues of $1.4 trillion during that time period, she said. Tech vendors want to reduce patent infringement costs "not by changing their obviously unfair and often illegal business practices, but by persuading Congress and the Supreme Court to weaken U.S. patent protections," she said. "We ought to stand up for American inventors." The bill also sets into motion a change in the way patents are awarded, from the first-to-invent system unique to the U.S. to the first-to-file system used by the rest of the world.
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Executives and lobbyists from some  of America's richest and most influential companies are walking  the halls of Congress, buttonholing senators to argue for  strong patents to preserve U.S. innovation.
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OTTAWA (CP) - Admitting that drug patent regulations are unclear and subject to abuse, Ottawa is returning the rules governing competition between brand-name and generic drug makers.
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Government officials, advocacy groups and tech execs gathering at this week's Tech Policy Summit bring a number of issues to the table, but one's rising to the top -- the need for patent reform.
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Legislation that would overhaul the U.S. patent system would hurt innovation and decrease the value of patents, representatives of two tech companies said Wednesday.
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Will the product patents regime lead to unsustainably high drug prices? A demonstration against patenting of drug products in Chennai.
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Mr. WebTV mounts forces More than 430 organizations spanning all fifty US states have fired off a letter urging Senate leaders to oppose a bill that would overhaul the country's patent system. And that includes tech outfits like Qualcomm and AmberWave.â¦
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WASHINGTON - The bill Congress is soon expected to pass giving regulators more authority over pharmaceutical companies is most significant to biotech drug makers and their would-be generic rivals because of what was left out.
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Three drugs -- Vioxx, Ketek and Avandia -- are casting long shadows over the congressional debate on how to update and revise the 15-year-old system that has dramatically sped up the process of bringing prescription medicines to American consumers.
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Drug makers are exploring the possibility of tying pharmaceutical prices to performance.
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Biotech and high technology, two key Massachusetts industries, are often seen as allies -- innovation-driven businesses that depend on a highly educated workforce. But this week they're on opposite sides of a fight playing out in Washington: How to overhaul the nation's patent system.