[Ip-health] possible legislation to raise standards for US patents

[Benjamin Krohmal]

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[ Picked text/plain from multipart/alternative ]
http://www.msnbc.msn.com/id/17438990/site/newsweek/

<Rep. Howard Berman, a California Democrat who spoke at the Policy
Summit, is pushing reform legislation, particularly to make it easier
to challenge bad patents and mitigating the judicial outrages. He
says that previous attempts to pass a bill were blocked by
Republicans loath to offend the big pharmaceutical firms, which like
patents just the way they are now. Berman is optimistic that he and
his allies in both houses will pass a bill that could put a stop to
nutty verdicts like the $1.52 billion MP3 judgment.

Under Secretary Dudas himself says that though he's worked hard to
improve patent quality (hiring more assessors and increasing the
rejection rate), he does support legislation that would make it
easier to challenge questionable patents. With the administration
onboard and a Congress not as beholden to corporate America, we may
just get a law that would make the system less broken. Or, as Jon
Dudas would have it, even better.>

Levy: Changes in Patents May Be Pending
'Patent trolls' come out of the woodwork after companies have spent
billions on a product.
By Steven Levy
Newsweek

March 12, 2007 issue - Jon Dudas's flight was canceled, so he didn't
make the first day of last week's Tech Policy Summit held in San
Jose, Calif. Just as well. One of the subjects of the day was
patents, and he could not have avoided hearing the familiar refrain
that the system is "broken." Dudas, who is under secretary of
Commerce and director of the Patent and Trademark Office, hates that
term. As he explained to me over breakfast, after he belatedly
arrived in California, the process is certainly not perfect=97but even
more certainly not broken. "It's the envy of the world," he says.
"Brazil, China, other countries, they want to know how we do it."

I'll wager, however, that China would be less than delighted to
emulate us if the consequences included events like the one in a San
Diego courtroom last month. Following the rules of our system, a jury
laid a whopping $1.52 billion judgment on Microsoft for infringing on
a patent involving the mechanics of playing MP3 music files. Here's
what is outrageous: Microsoft had already licensed MP3 technology
from the consortium that developed the standard, for $16 million.
Years later, after MP3 technology took off, Alcatel/Lucent (inheritor
of patents filed by the fabled Bell Labs) emerged to file its suit,
and won almost 100 times as much as what was determined a fair
license fee originally (because Microsoft had unwittingly infringed
that patent). Unless the judgment is overturned, more than 400 other
firms using MP3 technology are prone to a similar ambush.

I'd also guess that China or Brazil does not envy the outcome of the
case where Rim (BlackBerry) had to pay $612 million to settle a case=97
even though the patents in question had been re-evaluated as invalid
after the suit had been filed. Those are only two of a number of
cases where patent holders used the system to extract huge,
apparently unearned, sums. Other problems involve the granting of
undeserved patents, which are nonetheless used to extract license
fees from companies unwilling to challenge the patents in court.

A who's who of high-tech companies like Apple, Microsoft, Cisco and
Micron=97though they are themselves big patent holders=97are banding
together to urge reform. They say their products often involve dozens
of potential patents, some of them obscure or poorly granted, and are
vulnerable to "trolls" who come out of the woodwork with arguably
relevant patents after companies have spent billions developing a
product. Meanwhile, small companies can't afford to fight in court.
Not everyone agrees. "The argument that the system is broken comes
from people who have an ax to grind," says Nathan Myhrvold, CEO of
Intellectual Ventures, a company that develops new ideas and also
buys latent patents.

Rep. Howard Berman, a California Democrat who spoke at the Policy
Summit, is pushing reform legislation, particularly to make it easier
to challenge bad patents and mitigating the judicial outrages. He
says that previous attempts to pass a bill were blocked by
Republicans loath to offend the big pharmaceutical firms, which like
patents just the way they are now. Berman is optimistic that he and
his allies in both houses will pass a bill that could put a stop to
nutty verdicts like the $1.52 billion MP3 judgment.

Under Secretary Dudas himself says that though he's worked hard to
improve patent quality (hiring more assessors and increasing the
rejection rate), he does support legislation that would make it
easier to challenge questionable patents. With the administration
onboard and a Congress not as beholden to corporate America, we may
just get a law that would make the system less broken. Or, as Jon
Dudas would have it, even better.




Benjamin Krohmal
Coordinator - Project on Medical Innovation
Knowledge Ecology International
Tel: +1-202-332-2670 ex. 14
Fax: +1-202-332-2673
ben.krohmal@keionline.org