Big Blue Pushes for Patent Law Reforms

October 19, 2009 Timothy Prickett Morgan

Back in August 2006, Senator Patrick Leahy of Vermont, the ranking member of the Senate Judiciary Committee at the time, and Senator Orrin Hatch of Utah, chairman of the Intellectual Property Subcommittee, proposed a sweeping and supposedly bipartisan patent reform bill. And this past April, after years of wrangling by industry giants and their lobbyists, that bill was voted on by the committee and approved by a vote of 15 to 4. And now it is stalled in the Senate, and last week IBM tried to kick start it again.

The original Senate bill, S1145, which you can read about here and here, has been stalled, but HR1908, proposed by Congressman Howard Berman of California (where else?) made it out of the U.S. House of Representatives to a vote of 220 versus 175 in September 2007. One of the main provisions of the House bill is that the first to file gets the patent for an idea, rather than the current system, which allows an inventor to prove that they had thought of an idea first and therefore someone else who filed their paperwork quicker should not be given a patent. This creates a kind of chaos. Big companies with big patent portfolios are complaining to Congress that they are under siege with patent infringement litigation, often from so-called patent trollers, companies that buy up patent libraries, often from failed companies and often on the cheap, and then figure out the big companies they can sue who might have infringed on the patents they acquired.

Before the economy went into meltdown in the summer of 2008, it looked like patent reform was going to be one of the major items that a new Congress and a new President would get to after the 2008 election. But all of the issues with the housing and banking system collapses put the patent issue not on the back burner, but back in the fridge where it got pretty cold. IBM wants the Senate to move it to the back burner, and is particularly encouraged that the Obama Administration has said it will support the revised bill, S515, called the Patent Reform Act of 2009.

“Technology and the nature of innovation have changed dramatically over the last half-century, but our patent laws have not been significantly updated,” said Robert Weber, senior vice president of legal regulatory affairs and general counsel at IBM. “We congratulate Secretary Locke and the Administration for their leadership in supporting S. 515 and we urge swift enactment of the patent reform legislation.

“The debate over patent reform has been both lengthy and constructive, but now it is time to act,” Weber added in a statement. “Chairman Leahy and other senators have crafted a compromise that enjoys broad support and deserves prompt passage. We support and commend the Chairman’s leadership and his pledge to work with the Majority Leader to schedule Senate debate before the end of this year.”

According to a report in the Wall Street Journal, the U.S. Patent and Trademark Office is going to scrap rules that the Bush Administration put in place to limit the flood of patents that companies could file. The idea was that fewer patents would speed up the approval and denial process at USPTO. With over 700,000 patent filings in backlog and a $200 million budget shortfall for the Federal fiscal year that started in October, something has to change. The bigger the backlog, the messier the tangle is to decide who invented something first. Hence, the first-to-file provision is still in the Senate bill, which has plenty of inventors up in arms. Now it is not just a race to invent, but a race to do paperwork. And in that case, the bigger companies have the advantages.

I wouldn’t hold my breath waiting, not with healthcare legislation taking up so much effort. But if healthcare runs off the rails, the Senate will turn to patent reform so fast it might snap our necks if we are watching.

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