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US patent reform clears House hurdle

Could bring US patent awards in line with rest of world

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A proposed law revolutionising US patent legislation has passed through a vital committee of the House of Representatives. The bill has got further than previous attempts at such reform.

If enacted, the bill would change the way that patent damages are calculated and would bring the way in which US patents are awarded into line with most other countries.

The US currently awards patents to the first person to invent something. The new law would award a patent to the first person to file for one in relation to an invention, which is the more common method internationally.

Patent reform advocates claim this will prevent difficult arguments over who was first to invent something in favour of easier-to-settle arguments over who was first to file a patent for the invention.

The bill was changed in the committee process to add more powers for an inventor to challenge a patent on the basis that it had been misappropriated from him.

The change to the way in which damages are calculated will mean that a court should only consider the value which a patent brought to an invention rather than consider the entire market value of an invention.

Companies in the technology sector in particular have lobbied extensively for the changes, claiming that large patent awards to litigants increased the costs of running patent-reliant technology companies.

The new proposed law also includes provisions for an early-stage, non-judicial mediation body and a limit to the circumstances in which an infringement is designated "wilful". Wilful damage incurs three times the damages awarded in patent cases.

"Our objective in passing this bill is to reform the patent system so that patents continue to encourage innovation," said House member Howard Berman, the bill's sponsor. "When it functions properly, the patent system should encourage and enable inventors to push the boundaries of knowledge and possibility."

Previous attempts to push through similar legislation failed at the committee stage in 2005 and 2006.

The bill is not unopposed. While the patent-dependent technology sector is largely behind the move, some businesses which depend on patents are opposing it because they believe it undermines some of their patent rights.

The bill has passed through the House Judiciary Committee and now awaits a hearing on the House floor. Similar legislation is passing through the US's other chamber of government, the Senate.

Copyright © 2007, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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