Legal News

Patent Reform Bill Clears Senate, Inches Toward Becoming Law

By Ashby Jones

Could patent reform finally be on the way?

The answer, it seems, is yes. After years of discussion and stalled bills — and more discussion and more stalled bills — we’re within a stone’s throw of Congress overhauling the patent system.

On Tuesday, the Senate overwhelmingly passed legislation that would restructure the way patents are issued. The 95-5 vote capped a six-year effort and came amid a Democratic call for the country to innovate its way out of high unemployment, as well as concerns that China, which has said it issued a record number of patents in 2009, would gain another edge over the U.S. Click here for the WSJ story; here for the NYT story.

Under the measure, the U.S. would shift to a “first to file” patent-rights system from a “first to invent” system. It marked a victory for big companies seeking to reduce legal challenges; a number of such companies, including Caterpillar Inc., 3M Co. and General Electric Co., formed the Coalition for 21st Century Patent Reform to push for the overhaul bill. But passage was a blow for small entrepreneurs, who say they lack the resources to rush applications to the U.S. Patent and Trademark Office.

The Patent Office would also gain power to set its own funding, a move that is likely to mean higher application fees but also greater resources to process an application backlog that exceeds 700,000.

The bill passed only after lawmakers dropped the thorniest issue: whether to narrow damages paid for infringing on a patent. By dropping the damages provisions, the legislation essentially leaves the matter of where to set damages up to the courts.

The result is a less-ambitious bill that also stands a greater chance of clearing the House of Representatives and becoming law.

According to the NYT, however, the House is unlikely to take up a patent bill anytime soon, and people with an interest in the patent system say they expect its bill to be significantly different.

But the WSJ reported that the House Judiciary Committee plans to introduce and vote on its own bill in the coming weeks, and the office of House Majority Leader Eric Cantor (R., Va.) said patent legislation is clearly on the agenda.

Full post as published by Law Blog - WSJ.com on March 09, 2011 (boomark / email).