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Patent Bill Nears Critical Stage on Hill

Lobbyists pushing for a major overhaul to the nation’s patent laws, as well as their opponents who are trying to weaken or outright kill the measure, are entering a critical, bicameral phase for the legislation.

Both the Senate and House Judiciary committees, which have jurisdiction over patent laws, could mark up their bills this week. But even if the measures get shoved out of the spotlight until after the July Fourth recess, lobbyists for both sides will be busy working behind the scenes by making their case with contacts in the Judiciary committees, sending letters up to Capitol Hill and launching advertising campaigns.

“I never would’ve imagined that the House and Senate would be potentially marking up their bills in the same week,” said Josh Ackil, a Democratic lobbyist with the Information Technology Industry Council, which supports the Patent Reform Act. “It’s crucial for us that things get out of the committees looking good.”

Among its many changes to patent law, the bill would put the United States in line with the rest of the world by moving to a “first-to-file” system, which would grant patents to the first person to file them, not the first inventor, according to Judiciary supporters.

Democratic lobbyist Steve Elmendorf, who runs the Coalition for Patent Fairness, which supports the House and Senate patent reform bills, said he was hopeful that Congress would start and possibly finish markups this week but that the schedule was certainly not set in stone. “If they’re making progress on the issues and decide to delay it for a week or two so they can have a less contentious markup — our goal is to get as much consensus as we can from both committees,” he said.

The Coalition for Patent Fairness effort this week will include a letter to Members and continued shoe-leather lobbying.

On the other side, though, smaller, domestic manufacturers say the bill would stifle innovation. They have recently jumped into the debate, said Kevin Kearns, president of the U.S. Business & Industry Council. Kearns, whose group is often at odds with its big siblings at the National Association of Manufacturers on issues of trade and currency manipulation, said the patent reform debate is a rare situation where NAM and the USBIC are in agreement. Both groups have expressed concerns with the patent bills.

“We have four objections to the bill,” Kearns said. “One, it makes for an almost open-ended post-patent review process.”

Kearns’ members also are opposed to what he calls giving the Patent and Trademark Office additional rule-making authority.

“We’re talking to everyone who will listen to us on Capitol Hill,” he said. “We are trying to make the point that this bill is close to a death knell of American innovation. There’s a massive lobbying effort going on right now.”

Another lobbyist, speaking on background, said his clients, which oppose the bill, have been working to put the breaks on the patent bills. “We’re putting some sand in the gears,” he said.

Last week, Kearns’ group and 200 others — universities and companies that include the Biotechnology Industry Council, the Innovation Alliance, several pharmaceutical companies and small manufacturers — sent a letter to Senate Judiciary Chairman Patrick Leahy (D-Vt.), ranking member Arlen Specter (R-Pa.), House Judiciary Chairman John Conyers (D-Mich.) and Rep. Howard Berman (D-Calif.), who is chairman of the subcommittee on courts, the Internet and intellectual property.

In the letter, they called for a section on apportionment of damages to “be deleted from the legislation.” And, it added, “we are united in our opposition to a new, open-ended, administrative post-grant review mechanism, which we believe is unreasonable and should be deleted.”

Advocates for the patent bills in the House and Senate said the letter undermines the message of some of the critics of the bill.

That’s because Members who support the legislation have been working with both sides to come to a compromise. The public demand of asking for certain provisions to be deleted ruffled feathers, lobbyists and Congressional aides said.

Ackil, the Democratic lobbyist for the Information Technology Industry Council, is among those pushing for the bill who saw an inconsistency between the group’s willingness to meet and negotiate and the letter’s far harsher, more dogmatic tone.

“The letter that was sent was disingenuous to leaders on the Hill who are trying to lead a process of negotiating in good faith to ensure that everyone’s on board,” said Ackil, whose member firms include large technology companies Apple and Oracle, among others.

“I think we saw opponents of this bill do this last Congress where they negotiated not in good faith, but as a tactic to stall the bill and gut the meat of this bill,” said Ackil.

A representative with BIO, who would speak only on background, said that wasn’t the case.

“It’s our No. 1 goal to get this worked out,” this BIO representative said. “I’d disagree with the notion that it poisons any ongoing negotiations. We have always been 100 percent out front with our concerns.”

The BIO representative added that his side will continue in talks with Members, staff and other interest groups.

Manus Cooney — a former chief counsel to then-Senate Judiciary Chairman Orrin Hatch (R-Utah) who represents high-tech company Tessera, an Innovation Alliance member — said that while pharmaceutical and biotechnology companies might have a seat at the table, his client does not. Cooney’s client signed the letter as well.

“If there are negotiations ongoing, the Innovation Alliance is not a party to them, and that’s part of the problem that some have with the bill,” Cooney said. “The process for resolving concerns has lacked transparency.”

Cooney said the main issues his side has with the current patent reform bills include provisions on post-patent review and giving the Patent and Trademark Office rule-making authority.

From his perspective, Cooney said, the bill would create “a permanent cloud” over patents because companies could challenge at the PTO and, perhaps, in the courts. The bill also would reduce the damages that patent infringers pay.

“So if you are a small company and you have a novel idea and your patent is being infringed by a large company, they can drag that person into the PTO with a lower burden of proof that’s applicable in those cases,” Cooney said. “We feel it will lead to large-scale infringement.”

Cooney added that he doesn’t believe Congress intended to harm the interests of small inventors. But, he said, “They have been working on this for a couple of years, they were sold a story and a solution by large IT companies and have invested a lot of time and energy in this issue.

“Now is the time to hopefully correct some of the problems of the bill.”

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