[Ip-health] Unions Pounce on Patent Reform

Sun Apr 6 15:20:02 2008

http://www.forbes.com/feeds/ap/2008/04/02/ap4846770.html

Associated Press
Unions Pounce on Patent Reform
By CHRISTOPHER S. RUGABER 04.02.08, 4:28 PM ET
WASHINGTON -

The battle over patent reform, a sleepy sounding subject that affects
new, cheaper medicines, Chinese counterfeits and BlackBerry addicts, has
always sent high-tech companies and drugmakers to their respective corners.

But now organized labor is getting in the fight, using its lobbying
muscle to stop - or at least shape - proposed changes to patent law.

Spurred by concern about overseas piracy of U.S. goods, unions have
stepped up their opposition to patent reform legislation pending in the
Senate. The AFL-CIO and the Change to Win coalition, a group of seven
unions that includes the Teamsters, argued in separate letters recently
that proposed reforms to the patent system would make it easier for
competitors in China and India to counterfeit U.S. products and send
more U.S jobs overseas.

Labor's opposition puts Senate Democrats who support the measure in a
tight spot. Patent reform is a top priority for another Democratic
constituency: high-tech companies such as Hewlett-Packard Co. (nyse: HPQ
- news - people ) and Cisco Systems Inc. (nasdaq: CSCO - news - people )

The patent bill, sponsored by Sens. Patrick Leahy, D-Vt., and Orrin
Hatch, R-Utah, would make the first significant changes to the U.S.
patent system in more than 55 years. It has deeply split the business
community and ignited intense lobbying.

Computer and Internet companies gave $1.3 million, 57 percent of their
total federal contributions, to Democratic candidates in 2007-2008,
according to the Center for Responsive Politics. Their contributions are
dwarfed by organized labor, which has given more than $24 million in the
same period, 90 percent to Democratic candidates.

Labor's opposition has "captured lawmakers' attention," said Robert
Lindefjeld, a patent attorney at Jones Day, because they have
demonstrated a link between the otherwise complex and obscure issue of
patent reform and jobs. In an effort to placate unions and other
opponents, Leahy and other senators are scrambling for a compromise.

A Senate aide, who requested anonymity, said, "There's a lot of interest
groups involved ... It's difficult to address everyone's concerns so
that they're 100 percent happy with the outcome."

The compromise proposal could be released as soon as this week, several
lobbyists said. The House approved its version of the bill last September.

One of the most contentious issue is the calculation of damages in
patent infringement suits. High-tech companies, whose products may
include hundreds of patented parts, want awards more closely tied to the
specific patent that was infringed, rather than to the entire value of
the product.

Opponents say that would reduce damage awards and make it easier to
infringe patents. One possible compromise in the works would give judges
more discretion to provide guidance to juries on calculating damages.

The unions oppose the current damages provision and a measure that would
require the publication of patent applications within 18 months of
submission, which they fear would make it easier for overseas
competitors to copy U.S. inventions.

They received an unlikely boost last fall when a Chinese official,
Yongshun Chen, a former judge, was quoted in the Chinese press as saying
reform legislation "favors the infringers and burdens patentees more."

Bob Baugh, executive director of the AFL-CIO's industrial unions
council, said Chen's comments "confirmed suspicions" that the
legislation would lead to more counterfeiting of U.S. goods.

U.S. manufacturers have long complained about counterfeit auto parts and
other manufactured goods from China. The Bush administration filed a
complaint last year at the World Trade Organization charging China with
lax enforcement of intellectual property rights.

In a statement last month, the AFL-CIO's executive council said it is
"ironic that, at a time when our nation is pressing China to upgrade its
protection of intellectual property ... the United States would actively
consider steps that could undermine the effectiveness of our patent
protections."

Supporters of the bill, however, say they are confident that unions'
concerns will be addressed and that the Senate will vote on a compromise
bill this month or next.

Mark Holston, Hewlett-Packard's general counsel, said Tuesday the
company is one of the largest U.S. patent holders and wouldn't support
legislation that weakens patent protection.

Baugh and other union representatives say they will reserve final
judgment until they see the compromise.

"We look forward to taking a close look at the new bill and working with
Sen. Leahy to ensure that our concerns ... are addressed," Jim Hoffa,
general president of the Teamsters, said in an e-mailed statement.

--
Sarah Rimmington
Attorney
Essential Action, Access to Medicines Project
Washington, DC
Tel: (202) 387-8030
Cell: (202) 422-2687
www.essentialaction.org/access/