The Corner

Patent Reform on the House Floor

It may not sound like the most exciting topic in the world, but in a few hours, the House is expected to pass overwhelmingly a complex patent reform bill. The message from the administration is that the bill is bad and must be changed.

The greatest fear is that the bill changes the rules concerning the amount in damages that aggrieved patent-holders can collect from those infringing their intellectual property. The administration charges that by overly limiting damages by statute, Congress will allow large, lawyered-up companies — the Microsofts and Hewlett Packards of the world — to infringe broadly and simply dare small patent owners to go to court against the companies’ crack legal teams.

In other words, if damages for infringement are sharply limited, then they become “almost a cost of doing business,” Undersecretary Jon Dudas, Director of the Patent and Trademark Office, told me last week. “That’s not a sufficient disincentive for people to violate patents.” A Bush Administration policy document released yesterday reads: “[S]ection 5 of this bill would introduce new complications and risks reducing incentives to innovate.”

But Rep. Howard Berman (D-Calif.), the bill’s sponsor, casts the problem as one of holders of low-quality patents (i.e., patents that probably should not have been issued) clogging up the courts with infringement claims. Using the same logic Republicans often use for tort reform, Berman has successfully wooed many Republicans to support the bill, over opposition from drug companies and small inventors.

The bill is expected to pass the House easily, with fewer than 150 votes against. PTO, which could not convince any members to carry the amendment on damages that they wanted, has no choice but to keep its powder dry for a battle in the Senate.

Most Popular