Court-urged Patent Reforms Taken Up by Congress

Court-urged Patent Reforms Taken Up by Congress

03/3/2011

The patent system is again being considered for reform by senior US lawmakers. The focus of the reform is the elimination of the humongous damage awards after court decisions lately have challenged the calculation methods.

Reforms on the patent system have been pushed in Congress for the past several years. However, actions on the matter have been deferred largely because of major industry players’ lobbying efforts.

The reform legislation is being supported this year by the Pharmaceutical Research and Manufacturers of America, Microsoft Corp, and the Biotechnology Industry Organization. Those who oppose it include Cisco Systems Inc, Dell Inc, and many more.

Senator Patrick Leahy, a Democrat from Vermont, introduced to the floor last week a new bill that he plans to try getting it approved on Thursday by the Judiciary Committee, and then campaign for a vote by the full Senate.

Although the proposed legislation stands to encounter rough sailing in a divided Congress, it may provide the answer to the main issues that have been raised by the courts.

The manner by which the damages for infringement are being calculated have been affected by the most critical of the court rulings.

For instance, the U.S. Court of Appeals for the Federal Circuit ruled in 2009 that Microsoft Corp infringed on a patent owned by Alcatel when it developed its Outlook software. However, the jury committed an error when it calculated damages based on Microsoft’s total Outlook sales.

In January of this year, in another case involving Microsoft, a commonly used method of calculating damages was thrown out by the U.S. Court of Appeals for the Federal Circuit.

The bill of Sen. Leahy would address the calculation issue by the establishment of judges as gatekeepers in determining the manner by which damages would be calculated.

WRITTEN BY:

blakeh@wellsdrew.com