[A2k] Financial Times: Patent revolution

[Thiru Balasubramaniam]

Patent revolution

Published: May 13 2007 22:04 | Last updated: May 13 2007 22:04

Life in the digital age is all about patents: last year a legal
dogfight nearly deprived US BlackBerry addicts of their instant e-mail
fix, and now the future of Vonage, champion of the cheap internet
telephone call, is threatened by a high-stakes US patent battle. Those
kinds of threats have focused attention on this abstruse and
impenetrable area of US law, and helped launch a clamorous public
debate about the future of patents and American innovation.

Now that debate is coming to a head, as the titans of new technology
face off against the giants of pharmaceuticals and other traditional
industries in a struggle to shape the biggest patent reforms in 50
years. The US Supreme Court has already done much to transform the
innovation landscape with a series of landmark patent rulings that have
undermined the excessive clout wielded by patent holders.

Later this week, the patent reform revolution could pass another
milestone, when a key congressional subcommittee votes on legislation
to tackle some of the biggest problems with American patent litigation,
including excessive damages.

Congressional hearings on the issue have provoked unprecedented public
interest: hearing rooms are filled well beyond capacity (not least with
representatives of powerful K Street lobbying firms, who are being paid
millions of dollars by companies from Microsoft and Intel to GE and 3M,
battling over patents worth many billions of dollars).

Congress should not miss this opportunity to act: the spectre of the
next elections is already looming, threatening to poison prospects for
bipartisan legislation that is not passed by July 4 (a full 16 months
before the poll). The current draft of the patent reform bill is not
perfect, but it has support in both houses and both parties, and
includes many key improvements.

Chief among them is a saner way to share out damages. Too often, at the
moment, damages for patent infringement are based on the full value of
a product, rather than the (often much smaller) contribution made by
the patent itself. Microsoft recently faced a record $1.52bn damages
award, based on the entire value of a personal computer, not the much
smaller contribution of the infringed patent, which involved MP3
technology.

The US Supreme Court has done what it can to reform the patent system,
including a recent ruling attacking obvious patents. Now it is time for
Congress to act =96 before the election sabotages bipartisanship.

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Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)
voice +41.22.791.6727
fax +41.22.723.2988
mobile +41 76 508 0997
thiru@keionline.org