UPDATE: Obama Administration Backs Proposed Changes To Patent System
October 06 2009 - 5:21PM
Dow Jones News
President Barack Obama's administration supports major changes
proposed in landmark patent legislation, likely accompanied by a
roughly 15% fee hike, U.S. Patent and Trademark Office Director
David Kappos said Tuesday.
"While a compromise, it clearly moves the ball forward," Kappos
said of the bill, which if approved would bring the first major
changes to the patent process in 50 years. On Monday, Commerce
Secretary Gary Locke wrote a letter to the Senate Judiciary
Committee expressing support for the Senate legislation.
The bill, introduced by Sen. Patrick Leahy, D-Vt., pushes to
harmonize the U.S. patent process with international standards and
grants the patent office more authority to make rules and increase
fees.
Congress will also have to grapple with the patent office's $200
million revenue shortfall, which Kappos said may be dealt with by
raising fees an estimated 15% as an interim measure.
"As someone who until recently was on the other end of paying
those fees, I fully understand what this means," said Kappos, who
formerly was the head of intellectual property at International
Business Machines Corp. (IBM). "It's a significant ask on the part
of the intellectual property community."
To help reduce the growing number of patent lawsuits, the bill
includes a "gatekeeper" provision that permits challengers to try
to claim damages in court only if they have substantial
evidence.
Forged as a compromise by the Senate Judiciary Committee, the
provision lays out a fair process for contesting patent rights,
said Gary Griswold, chairman of the Coalition for 21st Century
Patent Reform, which represents manufacturers and researchers
including 3M Co. (MMM), Caterpillar Inc. (CAT), General Electric
Co. (GE) and Eli Lilly & Co. (LLY).
"It doesn't allow either party to come in with some damage
theory without substantial evidence," Griswold said.
The administration opposes one major piece of the bill that
would require patent examinations to be performed in the U.S.,
Kappos said.
"It really ties our hands," he said, noting that an estimated
half of the office's workload comes from overseas applicants. The
patent office needs to be able to work with foreign patent offices
if it wants to make headway in reducing its backlog, he said. At
the end of the 2008 fiscal year, the patent office had yet to
review more than 770,000 applications.
And as part of meshing the U.S. patent system with international
standards, the bill proposes switching from a "first to invent"
system to a "first to file" system that grants the patent to the
first person to successfully complete the necessary paperwork.
"It's a much simpler approach," said David Tennant, an
intellectual property partner at White & Case LLP. Identifying
the first inventor often involves long and expensive debates, he
said.
The change could save money both at the patent office and in
court. "If there's ever a dispute, you look at the filing date and
it quickly resolves it," Tennant said.
- By Kristina Peterson, Dow Jones Newswires; 202-862-6619;
kristina.peterson@dowjones.com