April 5, 2006

US patent chief urges Congress to act on reforms

By Peter Kaplan

WASHINGTON (Reuters) - The head of the U.S. Patent and
Trademark Office on Wednesday urged Congress to move ahead with
legislation to improve the patent system, even though lawmakers
are still deadlocked over related proposals to rein in patent

Jon Dudas, director of the government office that grants
patents, told a U.S. House of Representatives Judiciary
subcommittee that it should adopt provisions that would prevent
questionable patents from being approved and give companies
more leeway to challenge patents after they're issued.

"We may be able to make a real difference now," he said.

Lawmakers are weighing broad initiatives to modernize the
U.S. patent system, with the U.S. pharmaceutical and technology
industries holding sharply different views of what changes are
needed. The tech industry complains that the current patent
system has forced companies such as BlackBerry maker Research
In Motion Ltd. to be held hostage by patent infringement

Dudas singled out two improvements he said the patent
office supports that are being considered by the House
Judiciary subcommittee on intellectual property.

One would give third party companies more leeway to
challenge a patent that has been approved. "It would serve as a
quicker, lower cost alternative to expensive litigation in
reviewing patent validity questions," Dudas said.

The other would allow third parties to go to government
examiners while they are still considering whether to grant a
patent and point out similar existing technology to argue
against granting a patent.

Both proposals "are widely supported throughout the
intellectual property community and would directly improve
patent quality," Dudas said.

The panel also heard complaints about the patent system
from Research In Motion, which reluctantly paid a $612.5
million settlement last month after losing a patent
infringement case to NTP Inc.

RIM Chairman James Balsillie said a judge overseeing the
case was poised to issue an injunction shutting down most U.S.
BlackBerry service even though the patent office re-examined
the patents claimed by NTP and rejected them. "The facts in our
case support the need for reforms in these areas," he said.

Dudas said reforms supported by the patent office should
not be held up while lawmakers grapple with more controversial

One of the issues that have stalemated patent legislation
is a provision promoted by technology companies that would give
judges more latitude to deny patent holders injunctions barring
infringers like RIM from using patented technologies. Another
controversial proposal would change how courts calculate damage
awards in patent infringement cases, reducing the amount patent
holders could recover.

Those proposals are opposed by the U.S. pharmaceutical
industry. Drug makers say watering down patent rights could
hurt innovation and hinder investment in new technologies.

The chairman of the subcommittee, Republican Lamar Smith of
Texas, has been trying to broker a compromise between the
technology and pharmaceutical industries and is expected to
revise an unsuccessful patent reform bill he offered in 2005.

In the Senate, Judiciary Committee Chairman Orrin Hatch, a
Republican from Utah, is also preparing a patent reform bill.