Tech-backed Patent Bill in Trouble in U.S. Senate

WASHINGTON(Reuters) – A long-negotiated patent overhaul bill sought by technologycompanies and opposed by big pharmaceutical makers is in deep troublein the U.S. Senate, Democratic and Republican aides said on Monday.

Big high-tech companies such as Cisco and Hewlett-Packard beganpushing for reform legislation years ago to cut the number of patentinfringement lawsuits and the amount of damages paid.

A version of the bill passed the House of Representatives lastSeptember but a similar measure is stalled in the Senate amid vocalopposition from drug maker Eli Lilly & Co, seed and herbicidecompany Monsanto Co, and smaller tech companies that fear lower damageswould leave them vulnerable to infringers.

"I wouldn’t say the bill is dead, but let’s say right now it’s on ice," said one Democratic aide.

The measure has drawn opposition mostly from Republicans and lacksthe 60 votes needed in the 100-member Senate to clear a likelyprocedural roadblock, aides said.

"We’ll try it again next year when we will have more (Senate)Democrats," said a second Democratic aide. Democrats now control theSenate with a slim majority but are expected to add seats in theNovember elections.

"It’s almost dead," said a Republican aide. "But people are stilltalking to each other. When they completely stop talking, then it isdead."

The bill is bogged down in the Senate over how high damages for patent infringement should be and other sticking points.

The Bush administration also opposes the damages portion of the House version of the bill.

Under current law, damages can be calculated as the entire marketvalue of the product. That number can be tripled when the patentinfringement is found to be intentional or willful.

The tech industry — which sells devices that can have many patentedelements — wants to reduce damage awards to deter people, who theyprivately call "patent trolls", from filing what tech companies say areunwarranted lawsuits.

The pharmaceutical industry, whose drugs often have just one or twopatents, says it needs the threat of high damages to protect theirintellectual property.

Under a failed compromise, judges hearing patent cases would haveruled on whether the patent involved was central to the product or not.The potential awards paid by an infringer would have been adjustedaccordingly.

Some experts have also questioned whether the patent legislation goes too far.

"The central problem with all of these proposed changes is that theywould inject far too much uncertainty and arbitrariness into the patentsystem," says Scott Kieff, who teaches patent law at WashingtonUniversity School of Law in St. Louis.

"Most proposed changes would have been terrible, resulting in lessinnovation and economic growth and fewer jobs for American workers.They also would seriously undermine U.S. efforts over the years toensure predictable enforcement of intellectual property rightsoverseas," Kieff wrote in a e-mail interview.

Other proposals in the legislation were aimed at stoppingforum-shopping, or choosing court venues that are fast orplaintiff-friendly.

The legislation would have allowed post-grant reviews, or publiccomment on patents after they are granted; and changed the punishmentfor "inequitable conduct," or failing to inform the patent office ofinformation relevant to patentability. The punishment now is loss ofthe patent.

(Editing by Tim Dobbyn)