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IP Watchdog

Patent Reform Far from Done Deal

By Gene Quinn

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Gene Quinn

As of today, legislative patent reform efforts are working their way through Congress, but passage of patent reform is far from a done deal. We are admittedly further along the road to legislative reform than at any point in time over the last 4 years, but the ultimate outcome is still not certain.

The Senate Judiciary Committee has reported out a version of patent reform, but at a hearing of the full House Judiciary Committee on Thursday, April 30, 2009, Congressman Conyers (D-MI) explained that the Committee would not simply adopt the Senate version of the bill.  This was echoed by Congressman Lamar Smith (R-TX), who is the ranking Republican on the House Judiciary Committee.

Thus, in addition to the hurdles facing the reform legislation in the Senate there are now real and substantial hurdles that will need to be overcome in the House as well.  If you were rooting for patent reform, it doesn’t look good.  But for many independent inventors, entrepreneurs and start-up companies, this could well be welcome news.

It was already believed that the patent reform might not manage to get through the Senate.  It was expected that if Senator Harry Reid (D-NV) did bring the legislation to a vote it will be because he has the votes to pass the legislation. In the wake of the recent House Judiciary Committee hearing one must now question whether Senator Reid would even consider bringing patent reform to a vote without assurances that the House will sign on.

There are at least several contentious issues remaining that could derail the patent legislation, including damages, first-to-file and presence of post-grant review. For independent inventors, entrepreneurs and start-up companies these are all major issues of concern. If the damages compromise reached in the Senate version of the bill does not find its way into the House bill patents will become worth far less because the amount of damages that could be awarded to a successful patent owner in litigation would almost certainly be less.

This would likely cause larger corporations to view patent infringement as a valid and relatively risk-free alternative to respecting patent rights.  If first-to-file remains in the bill there is also a likelihood that those with fewer resources will not be able to win the race to the Patent Office, again favoring larger corporations over individuals and small businesses.
Finally, if post-grant review remains it will become much easier to challenge an issue patent, thereby holding patents hostage for even longer than they already are by the enormous Patent Office backlog and ridiculous amount of time it takes to get a patent.  Therefore, no patent reform is probably far better for independent inventors, entrepreneurs and start-up companies.

Things to watch for as patent reform continues its long and winding road through Congress include:

(1) Senator Orrin Hatch (R-UT) has been a major driving force in patent reform, but he did not vote in favor of the version of the bill reported out to the full Senate because it did not include inequitable conduct reform.  Should Senator Hatch signal his willingness to vote for the Senate bill that would be strong indication that the Senate version of patent reform can and will pass the full Senate.

(2) Congressmen and Congresswomen from Michigan and Ohio could well dictate the fate of patent reform in the House.  With Chrysler filing for bankruptcy manufacturing associations lobbying hard on patent reform, if the bill continues to contain provisions that are viewed as taking the sting out of patent infringement it will not likely fair well with the full House.  Manufacturing associations are worried that the reforms wanted by the high-tech sector will cost American jobs.  At a time of such economic unrest this just won’t fly in the House where every member must stand for re-election every two years, and will be particularly problematic for those in the House from states hit hardest by the auto industry collapse.

Eugene R. Quinn, Jr.
US Patent Attorney (Reg. No. 44,294)
Zies Widerman & Malek
Founder of IPWatchdog.com

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