Senate panel approves patent reform bill

Senate panel approves patent reform bill

	Published : Fri, 20 Jul 2007 01:06 By : Agencies Print this Story

WASHINGTON (AP) - The Senate Judiciary Committee approved a sweeping patent reform bill Thursday that seeks to improve patent quality and reduce the number of costly infringement lawsuits.

The committee's move comes after the House Judiciary panel cleared a similar bill Wednesday. The bills will now need to be considered by the full House and Senate.

Members of Congress and industry groups say the legislation makes the most extensive changes to patent law in more than 50 years.

The Senate panel also approved several amendments to the bill, including one sought by the financial services industry. That amendment would protect banks from damage awards in patent infringement cases involving electronic check-clearing technologies, such as check-imaging systems.

More than 60 banks have been hit with lawsuits alleging the infringement of such technologies, the American Bankers Association said in a letter last week to the House and Senate Judiciary Committees. Banks have paid millions of dollars to settle the suits, the association said.

Both the House and Senate proposals would increase the information available to patent examiners and set up a process to re-evaluate patents after they are granted. Supporters argue such post-grant reviews would help weed out patents for minor innovations and overly broad patents by allowing companies to challenge them without having to go through lengthy litigation.

The bills also seek to reduce the incentives for litigation by making it harder for a patent holder to show that another company has willfully infringed its patents, which can entitle the patent holder to triple damages.

The bills are sponsored by Sens. Patrick Leahy, D-Vt., chairman of the Senate Judiciary Committee, and Orrin Hatch, R-Utah, and Reps. Howard Berman, D-Calif., and Lamar Smith, R-Texas.

The Senate committee began its consideration of the bill last week, when it accepted an amendment offered by Sen. Arlen Specter, R-Pa., that would limit the jurisdictions where patent holders can file lawsuits. The suits would have to be filed where the plaintiffs or defendants are located, or where the alleged infringement took place.

The House approved a similar measure Wednesday. The provisions are intended to limit 'forum shopping,' where patent owners seek out fast-moving court dockets and sympathetic juries.

The changes made by the two committees, so far, haven't satisfied many of the bill's opponents, which include pharmaceutical, biotech and manufacturing companies, as well as technology companies that rely on licensing patents, such as Qualcomm Inc.

Those companies argue that the bill will weaken patent protection by reducing the penalties for infringement and subjecting patents to additional challenges under the post-grant review process.

The Biotech Industry Organization, whose members include Amgen Inc. and Genentech Inc., said Thursday it opposed to the House bill, which 'threatens continued biotech innovation.'

The legislation is strongly supported by software and technology companies, such as Microsoft Corp. and Cisco Systems, which argue that their complex products with hundreds of patents makes them easy targets for patent infringement suits based on inadvertent or minor violations.

For instance, a $1.5 billion award was levied against Microsoft earlier this year on a patent infringement suit brought by Alcatel-Lucent.