Key Senator Reports Compromise Reached on U.S. Patent Reform

Leading U.S. lawmakers have reached a tentative agreement to reform the nation’s patent system, according to Senator Patrick Leahy, chairman of the Judiciary Committee and a leader in the effort.

Leahy did not provide details of the compromise on Thursday, but sources working on the issue said that the bill would require judges hearing patent infringement cases to play a gatekeeper role in helping identify appropriate damages.

The measure also gives the patent office the authority to set its own fees, said the sources, who asked to speak privately since they were not authorized to discuss the matter. Big computer and hardware firms, facing expensive patent infringement lawsuits, have pushed for years for patent law changes. But the effort has been opposed by big drug companies, some smaller technology firms and others dependent on small portfolios of patents.

“Today we can report that we have reached a tentative agreement in principle that preserves the core of the compromise struck in committee last year,” Leahy said Thursday.

“No one will think this a perfect bill,” said Leahy, indicating that discussions were continuing.

A patent reform bill passed the House in late 2007, but stalled in the Senate largely because of disagreements between industries over what damages should be paid by infringers and other measures.

According to the sources, the latest measure would empower judges to determine if an infringed patent is crucial — as in many drugs — or less important, as is often the case in high tech products that can have hundreds of patented devices.

The U.S. Patent and Trademark Office (PTO) has asked for the right to set its own fees in order to hire examiners and upgrade technology so it can chip away at a massive backlog of applications.

The bill does not, at this point, include a measure pushed for by Republican Senator Orrin Hatch, who has wanted to make it harder for patents to be attacked by arguing that there was misconduct in the application process. That aspect is still being discussed, the sources said.

Steve Maebius, chair of Foley & Lardner’s Intellectual Property Department, said: “The Senate has struck an artful compromise on certain key provisions that address certain concerns of the PTO and tries to balance the needs of opposing industry groups who have clashed over this legislation.”

Q. Todd Dickinson, a former head of the patent office who now heads the American Intellectual Property Law Association, said he hoped the measure would become law.

“We are eager to discuss the final product and are very hopeful that it will be something that the vast majority of the patent community can support,” he said.

(Reporting by Diane Bartz; Editing by Tim Dobbyn)