Patent Bill Now Faces Union Foes

Posted February 6, 2008 at 6:37pm

As negotiations over a major patent reform bill intensify in the Senate, those opposing the measure got a significant boost Wednesday when more than a dozen unions called on Senators to thwart the legislation.

Spearheaded by the United Steelworkers, 14 unions sent a sharply worded two-page letter to every Senator. Over the next few weeks, the labor groups plan to march into Member offices hand-in-hand with their corporate employers to lobby against the bill in its current form.

“This is a major development that gives political validation to the arguments we’ve been making,” said Bill Frymoyer, a senior adviser at Stewart and Stewart. The firm’s client Cummins-Allison, which makes currency handling equipment and paper shredders, is pushing against the patent bill.

Patent reform proponents, however, dismissed the letter and said the bill is moving forward and could easily be on the Senate floor after the Presidents Day recess.

“Labor organizations sent a similar letter to the House of Representatives last year, and the House passed the Patent Reform Act soon after,” Steve Elmendorf, who represents the Coalition for Patent Fairness, a key force in favor of the patent bill, said in a statement released by the coalition. He later added in an interview, “We’re getting to the final stages here. It’s going to come to the floor, and there are people on all sides of the issue that are suddenly waking up that it’s coming to the floor and increasing their level of activity.”

All sides of the issue will be on display today during a meeting, just the latest in a string of sessions, organized by the staffs of Senate Judiciary Chairman Patrick Leahy (D-Vt.) and Sen. Orrin Hatch (R-Utah). Both are sponsors of the bill.

The meeting’s participants include lobbyists from pharmaceutical and manufacturing companies that oppose the bill as well as many tech industry giants that favor it. Labor will have a seat at the table today, several sources said.

“For months, we have been bringing stakeholders together to discuss how best to accomplish those reforms,” Leahy said in an e-mailed statement.

“I am committed to having the Senate consider these critical, long overdue reforms, and my staff and I will continue to speak with people from all corners of the patent world as we prepare for Floor debate on patent reform legislation.”

In an e-mailed statement, Hatch was optimistic about the bill’s chances, calling it “one of the most important bills that this Congress considers.”

“We will get this done,” Hatch said. “I expect a compromise package that resolves the few outstanding key issues on the Senate floor in a few weeks.”

In addition, the Coalition for Patent Fairness this week organized a fly-in of patent attorneys from technology and financial services companies who are making their case to Senators in favor of the bill.

Lobbyists pushing for the patent bill, which would be the first reform of patent laws in half a century, said the unions will have to make a bigger splash than just writing letters to stop the legislation.

“To be taken in good faith on Capitol Hill, you probably should do more than just send up two letters saying you have problems,” said Josh Ackil, a partner with the Franklin Square Group, who represents high-tech clients in favor of the bill.

“You should come up to the Hill and try to work with Members of Congress who are trying to get this done,” Ackil said.

“They haven’t wanted to be involved in the discussion at all,” he added.

According to their letter, the unions — which include the International Brotherhood of Teamsters, Communications Workers of America and the Laborers’ International Union of North America — have the identical concerns of their employer companies.

They are worried that the bill would limit damages paid in patent infringement cases. And they also don’t like other proposed changes to patent law that would make it easier to challenge patents after they have been granted.

“All of these changes increase the likelihood of American inventions being stolen and provide incentives for American manufacturers to simply license their technology for production overseas,” the union letter said. “This is unacceptable.”

While it’s hard to see patent reform as a bread-and-butter union matter, labor sources said it’s about jobs.

Several sources said Stan Fendley, director of legislative and regulatory policy for Corning Inc., has been a “ringleader” and point-person in bringing the corporate opponents of the patent bill together with their employees’ union interests — as well as other groups that have concerns about the bill.

“We think the legislation will have a negative implication for innovation and therefore for jobs,” Fendley said. “We are happy that our friends in labor have chosen to speak out.”

Fendley added that Corning and other companies have reached out to their employees unions and have appointments to lobby Members together in the coming weeks.

“I don’t think it’s lost on anybody that a lot more people are speaking out,” he said.

One labor source, who would only speak on background, said that even though he was at first skeptical of the corporate opponents of the patent bill, “we kept asking questions. There’s some pretty cogent arguments there. I believe them when they say ‘this really is important to our future and our success as a company.’”

The unions could help the patent bill’s opposition when it comes to Democrats, who are viewed as tight with the high-tech supporters of the reform bill.

“Concerns are actually growing, instead of weakening, because we haven’t seen really positive movement toward getting rid of some of these really problematic provisions,” said Susan Mora, a spokeswoman for the Innovation Alliance, a coalition of companies that want changes to the bill. “We’re really happy that the unions who speak so much for American jobs are aware of the problems that the bill would cause and are voicing their concerns.”