Patent Reform: Obama Favors Major Changes to Patent Law

There has been something brewing for at least a couple weeks now on the patent reform agenda, and I have been trying to make sense of it all.  I am not sure I have my head wrapped around it yet, but the Wall Street Journal (via Dow Jones Newswire) is reporting that President Barack Obama is placing his support behind major changes to the patent laws and reopening the patent reform debate.  For some time now I have been writing that patent reform was dead and would not come back before the end of 2009, and that if it did not come back it would be difficult to do anything during 2010 due to it being an election year.  Patent reform is not susceptible to party politics, but there are major industries and large donors who are on both sides of the debate, which will make it exceptionally difficult for many Senators to cast a vote one way or another.  For that reason I do not suspect patent reform to be on the table in 2010 with what will be a very heated election cycle where every supporter and every dollar will matter.  I also did not believe patent reform would come back this fall because the health care debate was raging and splitting the country and Congress.

As we all know, health care proposals are moderating from what they once were, so widespread and sweeping changes seem unlikely at this point.  With this major battle largely off the plate of Congress I was starting to think that the Obama Administration would turn to its B-List priorities, and that is why the patent reform rumblings over the last several weeks seemed to be more than just chatter.  I have been calling around and no one really seemed to have any information or detail why there were rumblings, which became all the more alarming.  I have been asking folks to keep their ears and eyes open, because I get the sense that this has legs.  Then today the report from the Wall Street Journal.  It is time for everyone who has been opposed to patent reform to stand up and take notice, and to vigilantly make sure disastrously bad provisions are not tucked away into the bill and passed in the early morning hours, which has been known to happen with respect to patent reform legislation in the past.

Less than one week ago, on Wednesday, September 29, 2009, a group of five United States Senators, namely Senator Orrin Hatch (R-UT), Senator Robert F. Bennett (R-UT), Senator Mike Crapo (R-ID), Senator James E. Risch (R-ID) and Senator Michael B. Enzi (R-WY), wrote a letter to Senate Judiciary Chairman Patrick Leahy (D-VT) and Ranking Republican Member Jeff Sessions (R-AL) saying:

For nearly five years, Congress has been working on legislation to reform our patent system – a system that has not been significantly updated since 1952. We commend you for your leadership and foresight in this endeavor.

As members of the Senate Republican High-Tech Task Force, we are keenly aware of the important role that our country’s high-tech industry plays as the global leader in technology innovation. Our ever-increasing technology and knowledge-based economy creates good high-paying jobs in almost every state of the Union. Last year, as the recession took hold, the tech industry as a whole added 77,000 jobs. More than ever, it is vitally important that we enact policies that keep our high-tech sector at the forefront of the world’s economy and a leader in innovation.

We must ensure that our patent system is as strong and vibrant as possible, not only to protect our country’s premier position as world leaders in innovation, but also to secure our economic future. Reforming our patent system is critical to the ability of the high-tech companies to devote the maximum amount of resources possible to the development and deployment of new technologies. Conversely, a malfunctioning patent system will undermine that process of innovation through inadequate quality of issued patents; inadequate guidance for courts in critical areas such as calculation of damages, assessment of willful infringement, and choice of venue for suits; and the lack of more effective procedures to provide patentees the ability to seek a supplemental examination before the U.S. Patent and Trademark Office.

In April 2009, the Senate Judiciary Committee structured careful compromises on many of these issues when S. 515 was reported to the full Senate for consideration. While we do not argue there that these compromises are the best that can be achieved, we do agree that it is important to move the legislative process forward by building on that consensus – not by weakening the bill on key, pro-innovative provisions. We strongly urge you to be vigilant in preserving what has been achieved so far and resist any attempts to weaken technology-friendly provisions. We would oppose such erosion and stand ready to help in this regard.

It is paramount that patent reform legislation be done right. The future of our high-tech economy and our nation’s role as the leader in innovation depend upon it. In addition to the aforementioned policy concerns, we request that all members of the Senate have proper time and opportunity to fully consider the legislation when it is brought to the floor.

It seemed odd that this letter would surface amidst rumblings that patent reform was not dead. I say it this way on purpose, because at no point could the rumblings be attributed to say that patent reform was alive, but major changes to the patent laws have started to be discussed without specifics and in ways that made clear that it was not dead, and not even really on life-support. I am still getting used to how to weave through information as a journalist, but the pattern seems to be when there is non-specific chatter which is highly ambiguous in nature and sources who are typically in the know only acknowledge they have heard the same rumors/information, there is something there.

I don’t know what is there yet in this newly revitalized patent reform discussion, but Senator Hatch who has been at the forefront of patent reform for many years is cautioning that any changes must not do harm, so I am worried. Why would Senator Hatch and the others who signed the letter feel it necessary to caution against doing harm? Why would Senator Hatch and others feel the need to request appropriate time for the Senate to consider the legislation when it comes to the full Senate?  This could be really, really bad, I just don’t know.

One thing that I do know, however, is that the Wall Street Journal report signals one potentially troubling matter. Now I realize that the popular press frequently gets these stories wrong, so lets not make more out of this than should be, but absent any specifics we are left to read tea leaves and speculate. In any event, the report says:

The administration opposes one major piece of the bill that would require patent examinations to be performed in the U.S.

This could mean many things, but if it means what it actually says, that the bill should not require patent examinations to be performed in the U.S., this could be unbelievably bad. For a long time there has been discussions of work sharing and sharing resources, and I get that. Duplicating work relating to searching and the like is silly, but shouldn’t the actual examination of U.S. patents be done in the United States? Does this signal harmonization on steroids? As I have written over the last couple months harmonization is not an evil concept, but traditionally that means the U.S. abandons our approach and gives in and acquiesces to the way things are done in Europe and elsewhere. Change to conform to others is stupid, change that makes sense is smart, and if it happens to be how things are done abroad that is fine, but it needs to make sense.

The lack of concrete information makes it hard to know what exactly is being discussed presently, whether there are changes from what didn’t go anywhere in the Spring and Summer, or whether it is the same, old, recycled, bad reform ideas. Time will tell, but one thing is for certain — we all need to pay attention, and fast! Patent reform has been known at times to be tucked into the Omnibus Budget and/or otherwise rammed through. It is essential we get this right, and the High-Tech Republican 5 are exactly right, we must not do any harm.