Senate Passes Patent Reform, After Stripping Out All Controversial Measures

Earthquake Patent

Congress has been working on various versions of patent reform bills since 2005, but the U.S. Senate has finally passed a patent reform bill on a 95-5 vote. It’s far from a comprehensive change to the patent system, and really amounts to no more than a few minor tweaks. Technology and web companies were pushing patent reform proposals that would have limited big litigation payouts to get the growing tide of patent lawsuits under control. But they ultimately failed to get the changes they wanted, after the key provisions they sought drew fire from pharmaceutical companies, unions, and universities.

Pharmaceutical and biotech companies, in particular, tend to be plaintiffs in patent cases, fighting generic competitors-and the damage provisions that tech companies were seeking was anathema to them.

In any case, some of those damage-limiting changes have already been partly accomplished through courts. In the past few years, major patent decisions at the U.S. Court of Appeals for the Federal Circuit and the U.S. Supreme Court have been mostly helpful to defendants, by limiting damages when defendants are found to infringe, and making it harder for patent plaintiffs to “forum shop” in venues thought to favor patent-holders, such as East Texas.

One small change in this bill will be putting the United States on a “first-to-file” system for awarding patents, which is similar to the system used in all other nations in the world. Currently, the U.S. uses a “first-to-invent” system, that allows parties to claim priority even if they weren’t the first ones to be awarded a patent. But even that provision is being opposed by some parties, such as Sen. Diane Feinstein (D-Calif.), who believe it negatively impacts small inventors.

A chief goal of the bill is to reduce the backlog of pending patent applications; there are currently 1.2 million pending applications. But an understaffed patent office is facing a bigger barrage of applications each year, and is under increasing pressure not to let “bad” applications result in patent grants; it’s hard to see how this law will reduce the backlog at all.

Now, the patent reform discussion will move to the House of Representatives, where a subcommittee that deals with intellectual property issues will hold a hearing on patent reform proposals tomorrow.

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