Consumer groups back patent bill

Five consumer groups have given their support to legislation that would overhaul the U.S. patent system, saying the bill would create fairer penalties for infringement.

The Patent Reform Act of 2007 could come before the U.S. House of Representatives for a vote as soon as this week despite objections from some labor unions, small inventors, and some small tech vendors. The bill, backed by several large tech vendors, also found support from Consumer Federation of America, Electronic Frontier Foundation, Knowledge Ecology International, Public Knowledge, and U.S. Public Interest Research Group.

“Numerous flaws have emerged within the current patent system that can foster poor quality patents and invite uncertainty that inflates the risk and cost of litigation, especially in the areas of software and online services,” the consumer advocacy groups said in a Friday letter to congressional leaders.

The groups support two controversial sections of the bill that allow for a new way to challenge patents after they’ve been granted and change the way patent awards are calculated based on apportionment of damages. Currently, courts generally consider the value of the entire product when a small piece of the product infringes a patent, but supporters of the bills want Congress to base damages only on the value of the infringing piece.

The apportionment provision would “encourage courts to limit damages for infringement so that they bear some relationship to the actual value of the damage to the patent owner,” the groups said.

The bill’s post-grant review process would allow challenges within a year of a patent being granted by the U.S. Patent and Trademark Office. “This provision would provide a comparatively inexpensive and quick means to ensure the validity of issues patents before litigation becomes necessary,” the groups said.

Tech vendors, including Microsoft, IBM, and Cisco, have argued that the USPTO often approves questionable patents and that it’s too easy for patent holders to sue, collect huge damages, and shut down product lines that have a small infringing piece.

But since late July, three labor unions, including the giant AFL-CIO, have written letters to congressional leaders raising objections to the patent-reform legislation.

The United Steelworkers letter said nearly 70 percent of patents filed in the U.S. come from manufacturing firms. “These bills would allow an endless loop of legal challenges after patents are awarded that will make it more difficult for U.S. patent holders to prevail against frivolous challenges,” the letter said.

The Coalition for 21st Century Patent Reform, whose members include Motorola, SanDisk, and Texas Instruments, has also opposed the legislation. “We believe a number of senators and members of Congress … have expressed concerns with the bill and a desire to further work on the bill,” coalition spokesman Bill Mashek, said earlier this month.

The Senate Judiciary Committee has approved its own version of the Patent Reform Act, and that bill is awaiting action in the full Senate.