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House, Senate Judiciary Committees Pass Amended Versions of Patent Reform Bills

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Patent reform legislation is moving forward in Congress after judiciary committees for both the US House of Representatives and the Senate last week passed parallel versions of patent reform bills.
 
Early in the week, the House judiciary committee endorsed HR 1908, the Patent Reform Act of 2007, after amending several aspects of the bill that have drawn criticism from the university tech-transfer and biotechnology communities, but keeping several others.
 
On Thursday, the Senate judiciary panel approved S.1145, the Leahy-Hatch Patent Reform Act of 2007, which also included several amendments.
 
The legislation will now be passed onto the full House and Senate. According to the office of a congressman sponsoring HR 1908, the House hopes to complete a full vote on the bill before Congress breaks for August recess.
 
The identical patent reform bills have been in the markup stage in both the House and Senate for the past several weeks, and during that time, various concerned parties from the university tech-transfer community, the biotech industry, and the information technology industry have been heavily lobbying for their interests in the bill (see BTW, 4/23/2007 and 6/11/2007). 
 
“This legislation is designed to improve patent quality, deter abusive practices by patent holders, provide meaningful, low-cost alternatives to litigation for challenging the patent validity, and harmonize US patent law with the patent law of most other countries,” Congressman Howard Berman (D-Calif.), a co-sponsor of the bill, said in a statement.
 
“This is a controversial and complex bill that makes substantial changes to the US patent system,” Berman said. “Naturally, the magnitude of changes contemplated by this act has given pause to many users of the patent system, but fear of change is no reason not to fix the obviously serious problems in the patent system.”
 
Patrick Leahy (D-Vt.), chairman of the Senate judiciary committee and co-sponsor of the Senate bill, also acknowledged the controversial nature of the legislation, noting in a statement that “a bill as complex as this one will require further attention, and I am committed to working with every member of the Senate – and ultimately with our colleagues in the House of Representatives – to make certain that all inventors enjoy the respect and support that our Constitution envisioned.”
 
John Vaughn, executive vice president of the American Association of Universities, said that the Senate judiciary committee had twice failed to complete the markup stage of S.1145. Vaughn was lobbying for AAU’s interests in the bill on Capitol Hill last week.
 
A statement from Leahy’s office highlighted a number of recent amendments to the bill, but it was not immediately clear which of those changes, if any, hastened its passage by the committee. 
 
Middle Ground, but No Consensus
 
The new version of HR 1908 contained new language in response to concerns raised by many interested parties representing most major sectors, including the university community and independent inventors, according to a written account of Berman’s opening statement at the proceedings.
 
“While it does achieve a ‘middle ground’ on many provisions, this is still an ongoing process,” Berman said. “I will not pretend that every issue is resolved, but my intention is to continue to work through the remaining issues between full committee and floor all the way up to the conference.”
 
Specific changes to HR 1908 of particular interest to the university and biotechnology communities included an amendment to section 3, which deals with the first-inventor-to-file change. According to Berman, the committee made changes in response to universities’ concerns about the grace period in the bill, and the administration’s concerns that first-to-file would “hamper their ability to negotiate for an effective grace period with major intellectual property partners.”
 
To address these concerns, the committee developed language that broadens the grace period to take into account the ‘publish or perish’ imperative in the academic community, Berman said, which would give universities more time to make a decision about whether a patent should be filed on a technology before it is disclosed.
 

“I will not pretend that every issue is resolved, but my intention is to continue to work through the remaining issues between full committee and floor all the way up to the conference.”

In addition, the committee worked with the US Patent and Trademark Office to develop a trigger before the first-to-file switch would occur. This language “provides flexibility for the US to negotiate with other countries to ensure adoption of a robust grace period throughout the world,” according to Berman’s statement.
 
The committee also changed some language regarding the controversial post-grant opposition section of the bill. As originally written, the bill would have provided a second window that would extend the amount of time parties had to challenge a patent, which many biotech and university interests claimed would diminish the value of patents and reduce incentives for investment in patented technologies.
 
The new version of the bill removes the second window, replacing it with a more limited timeframe and procedure by which parties can challenge the validity of a patent.
 
Some aspects of the bill appear to remain largely unchanged, most notably the apportionment of damages section, which many biotech and university representatives claim will make infringement cheaper because the amount of damages that could be awarded to a patent holder would be lessened by stripping away aspects of the patent that were previously publicly disclosed.
 
“We remain concerned with provisions in the legislation that would change how damages against patent infringers are calculated, in a way that would often make infringement cheaper,” the Biotechnology Industry Organization said in a statement last week. “We also believe changes are required to the provision that would require that courts peel away from the patented and infringed invention the value of all previously known elements, and award damages based solely on the remaining elements.
 
“This provision severely devalues all underlying patent rights and could seriously undermine the incentive to develop novel new forms of medicines and other biotechnologies,” BIO said.
 
Overall BIO said, it commended committee chairmen for the improvements made during the markup stage, but said that it must continue to oppose the act in its current state.

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