Senate passes patent bill, but kills limits on damages

The U.S. Senate has passed an overhaul of the U.S. patent system, but has removed some controversial provisions limiting damage awards in infringement lawsuits.

The America Invents Act, approved by the Senate late Tuesday by a 95-5 vote, would allow third parties to file information related to patent applications, potentially allowing outsiders to challenge patent applications, and it would create new ways to challenge patents after the U.S. Patent and Trademark Office has awarded them.

The bill would allow the USPTO to set its own fees for patents, and it would direct the agency to award patents to the first inventor to file for a patent, instead of determining the first person to create an invention, putting the U.S. in step with most of the rest of the world.

Leaders of the U.S. House of Representatives are working on their own patent reform bill. The Senate bill will next go to the House, where it is likely to be amended.

Members of Congress have introduced patent reform bills in each of the last three sessions of Congress, but have failed to pass the legislation after several groups protested.

Several large technology vendors, including Intel, Microsoft and Apple, have been pushing for patent reform for years, spurred by several multimillion-dollar patent infringement awards from U.S. courts in recent years. But provisions limiting damages awards were taken out in an amendment approved on the Senate floor.

Senator Patrick Leahy, a Vermont Democrat and sponsor of the bill, said the bill will improve the U.S. patent system and bolster the U.S. economy. The bill contains the "first meaningful, comprehensive reforms to the nation's patent system in nearly 60 years," he said in a statement.

"The America Invents Act will promote American innovation, create American jobs and grow America's economy, all without spending a penny of taxpayer money," Leahy added."It is commonsense legislation that will help preserve America's position as the global leader in invention and innovation."

The Coalition for 21st Century Patent Reform, which has criticized some past patent bills for limiting damage awards, praised the bill passed by the Senate. The bill will give the USPTO "the tools and funding it needs to process patents in a more effective and efficient way," said the group, whose members include Texas Instruments, Motorola and General Electric.

Still, the bill is likely to remain controversial. The first-to-file provisions would hurt small inventors, some critics have said.

"The first-to-file provision will be a gold mine for attorneys and the largest portfolio holders, but the result will burden rather than promote innovation," Ed Black, president and CEO of the Computer and Communications Industry Association, a tech trade group, said recently.

The amended version of the bill is an improvement over earlier versions, but still has problems, said Heather Greenfield, CCIA's spokeswoman.

"This bill unfortunately does not really do much to fix the abuses of the patent system that are harming our industry and innovation," she said. "As for abuses of the patent system we'd list low quality patents, patent trolls and those who use their patents as a tool to block competition from the marketplace, which can delay or even ban the next tech breakthrough."

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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