Feinstein Demands ‘True Compromise’ on Patent Damages in Overhaul Bill
Leaders of the Senate Judiciary Committee seem to have started winning over two prominent critics of the Patent Reform Act (S-515). Its damages “apportionment” provision has defined the debate (WID March 11 p5). Sens. Jon Kyl, R- Ariz., and Dianne Feinstein, D-Calif., are co-sponsors of a manager’s amendment for S-515 approved by the committee in a markup Thursday. So is Ranking Member Arlen Specter, R-Pa., who stopped the bill on the Senate floor last Congress. Last week, Kyl quietly introduced his own overhaul bill (S-610), which leaves damages calculations unchanged. But Feinstein made clear at the markup she won’t tolerate anything less than “true compromise” on damages from the high-tech industry and its Senate supporters.
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The manager’s amendment makes mostly technical changes. But it includes a new provision to allow patent holders to “virtually mark” a product. Current law requires patent owners and sellers of patented products to include a notice on the product or its packaging that shows any patents in the product and their registration numbers, and without the disclosure damages can’t be recovered for infringement. The proposed change would allow owners or sellers to use a Web page link to the patents and their numbers for the notice. The amendment also clarifies that first-window, post-grant review proceedings by the Patent Trial and Appeal Board must be instituted by the director of the Patent and Trademark Office. It also tightens the language on prior art and derivation proceedings.
“We may be coming close to what is an agreement,” Specter said at the markup. “Very significant modifications” to S-515 are being discussed, and those interested should “be on notice” that a bill could be nailed down sooner than expected. “We will complete a patent bill relatively soon in this committee,” said Chairman Patrick Leahy, D-Vt.
Feinstein implied that she’s in the best position to decide the appropriate “balance” in the bill, a word she used several times. California has high-tech giants, startups, biotech and pharmaceutical companies, which have widely differing views on what should go in an overhaul bill, she said. Feinstein also gave a nod to Steve Perlman, the owner of 80 patents and creator of the much-discussed OnLive Game Service announced at the Game Developers Conference this week (WID March 25 p3).
Biotech, pharmaceuticals, small inventors and universities remain concerned about the “elephant in the room” - figuring damages -- and tech giants have been unwilling to budge on S-515’s apportionment provision, Feinstein said. When she introduced her “gatekeeper” language in 2007 to ensure that judges can stop disproportionate damage awards, she said, “unfortunately there was silence from the high-tech community.” But “I'm now thankfully getting some feedback” from tech companies on Feinstein’s new gatekeeper language.
To show good faith, Feinstein hasn’t revived her old amendment to codify the so-called Georgia Pacific factors used by juries to come up with damages awards, she said. “I'm not wedded to codifying.” But patent law is “rather obtuse,” and any changes could have “major unintended consequences” for industries whose business models don’t align with that of high tech, Feinstein said. “A solution means true compromise.”
Other proposed amendments weren’t taken up. One, by Sen. Tom Coburn, R-Okla., would prevent the diversion of user fees collected by the PTO. Insufficient funding of the office has been blamed for the issuance of low-quality patents and a backlog of applications, now 750,000, the U.S. Chamber of Commerce said in a letter to committee members. The Chamber said it isn’t taking a position on any bill but supports an end to fee diversion. The committee will take up other proposed amendments at a markup Tuesday.
The committee also voted out three nominations to Obama administration positions. One was that of Tony West, a former child-porn prosecutor, to lead the Justice Department Civil Division. Another was that of Christine Varney, well known in online privacy policy circles, to lead the Antitrust Division. Specter said he wouldn’t vote for Varney on the Senate floor until she fully answers his questions. “I want more answers from nominees. I want to know where they stand.” Specter didn’t specify which of Varney’s answers he considered inadequate.