Senate Proposes Patent Overhaul

Michael Hayes
WASHINGTON — Adult webmasters who develop, use and license the technology that drives porn online may soon find themselves operating under a different set of rules, if a recently introduced bill that overhauls the U.S. patent system becomes law.

The Patent Reform Act of 2006 was introduced by Sens. Orrin Hatch, R-Utah, and Patrick Leahy, D-Vt., who co-chair the U.S. Senate’s intellectual property panel.

According to Leahy, the 45-page piece of legislation, which was the culmination of more than two years of hearings and debates, is “not an option, but a necessity.”

One major Leahy-backed reform that could turn the existing regime on its head is the abandonment of the so-called “first to invent” method of awarding a patent.

Under the current law, patents are awarded on a “first to invent” priority basis, a process many observers criticize as unfair because proving who invented a particular technology first is often difficult.

The proposed law change would shift the U.S. patent system to a “first to file” method, bringing America inline with most foreign countries.

U.S. Patent Office chief Jon Dudas, who called for the shift in April of 2005, welcomed the proposed change, saying at the time that adopting the “first to file” method would help clear the office’s backlog of 490,000 applications.

The U.S. Patent Office employs 4,400 patent examiners and approves more than 500 patents per day.

Also endorsed by the U.S. Patent Office is a measure designed to cut down on costly patent infringement litigation.

The new measure would establish a “post-grant opposition” system. Under the proposed dispute resolution process, those seeking to challenge a patent could do so before a board of administrative judges within the Patent Office, rather than filing a lawsuit in court.

News site TechDirt.com, which rated the bill a “mixed bag,” lauded the idea of making patents easier to challenge, but pointed out that the proposed process has several flaws, namely the limited one-year window to challenge a patent.

Taking further aim at contentious patent infringement litigation, the bill seeks to limit the practice known as forum shopping, whereby patent plaintiffs seek out favorable judges to hear their cases.

Under the present system, many patent infringement plaintiffs maneuver their cases to a federal courthouse in the East Texas town of Marshall where Judge John Ward has developed a reputation for speedy trials where the plaintiff — the patent holder — nearly always wins, taking in huge awards.

The bill also seeks to trim the awards in patent infringement litigation by mandating that judges calculate damages based solely on the economic value of the “novel and nonobvious features” covered by the disputed patent. The current system lets judges determine damages based on the value of the product taken as a whole.

The Senate bill drew praise from the Coalition for Patent Fairness, a recently formed group consisting of technology companies such as Dell, Intel, Apple and Microsoft.

Meanwhile, the Professional Inventors Alliance, a group that represents independent inventors, called the bill a “wish list for antipatent, washed-up technology company,” adding that the legislation diminishes protections for individual inventors.

The Professional Inventors Alliance President Ron Riley said that “the bill would reward those who can afford to file quickly and often.”

Hatch and Leahy, who called the bill a first effort, will push the measure when the Senate returns from its summer recess.

Rep. Lamar Smith, R-Texas, introduced a similar bill in the House last summer.