Leahy Reintroduces Senate Proposal for U.S. Patent Law Changes

Senate Judiciary Committee Chairman Patrick Leahy reintroduced a proposal for changing U.S. patent laws to include constraints on infringement damage awards and rules intended to speed the application process for inventors.

The measure also would let the U.S. Patent and Trademark Office set its own fees, grant a patent to the first applicant rather than to the person determined to be the inventor and limit patents on ways to avoid tax liabilities, according to a copy of the document posted on the committee’s website. The bill is similar to legislation last year that failed to reach a vote.

“It has now been nearly 60 years since Congress last acted to reform American patent law,” Leahy, a Vermont Democrat, said in a statement today. “High quality patents are the key to our economic growth. They benefit both patent owners and users, who can be more confident in the validity of issued patents.”

Lawmakers have been debating patent law proposals since at least 2005 that were initially pushed by technology companies including Intel Corp. and Cisco Systems Inc. The latest effort is a “means to promote job growth,” a group of more than 50 companies that includes Johnson & Johnson, 3M Co., PepsiCo Inc. and General Electric Co. said in a statement.

Drugmakers, biotechnology companies and individual inventors have opposed past efforts by Congress, saying courts have scaled back patent rights to address complaints about the system and additional changes would hurt innovation. Bill Frymoyer, an adviser with Washington-based advocacy group Innovation Alliance, said his group is reviewing Leahy’s proposal.

Patent Fees

Innovation Alliance represents companies that rely on patents for licensing revenue including Qualcomm Inc., Tessera Technologies Inc. and InterDigital Inc. The group was against last year’s legislation before withdrawing opposition when a compromise was reached on how damages should be calculated at trials. Frymoyer said the patent office’s fee structure still must be addressed.

Fees collected by patent office pay for all of its operations, and Congress has taken some of that money for use in the general treasury.

PTO Director David Kappos told a House subcommittee today that the loss of potential revenue and the failure of Congress to pass President Barack Obama’s fiscal 2011 budget may limit programs designed to address a backlog of more than 700,000 patent applications.

Leahy’s office said the legislation, S. 23, was introduced today. Cosponsors included Democrats Amy Klobuchar of Minnesota and Chris Coons of Delaware; Republicans Orrin Hatch of Utah, Chuck Grassley of Iowa, and Jon Kyl of Arizona; and Joe Lieberman, a Connecticut independent.

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net.

To contact the editor responsible for this story: Allan Holmes at aholmes25@bloomberg.net

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