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Mr WebTV skewers US patent bill

Startups in danger?

The baby and the bathwater

But the first-to-file rule is the least of Perlman's worries. He's more concerned with the bill's efforts to cut back on damages awarded in patent cases.

If a court finds that only a portion of a product infringes a particular patents, the bill says, then it should award damages that reflect only a portion of the product's revenue. What's more, the bill would discourage courts from awarding triple the damages for "willful" infringement.

These are obvious attempts to battle trolls, but in cutting back on damage awards, Perlman argues, Congress is tossing out the baby with he bathwater. So many times, it's just a portion of a product that generates all the revenue. "With a lot of inventions, there's a very small, very clever insight that makes all the difference between a great product and a not great product."

Plus, the bill fails to account for inventions that reduce costs. "Many times, as an inventor, you're taking something that used to be expensive and bringing it down to something that's inexpensive," Perlman said. "If I improve a machine part, so that the machine is now inexpensive and it can be sold for cheaper, my damage award is now less than if I'd left it the way it was."

He believes the Patent Reform Act has gained so much momentum thanks too a pair of high-profile suits generally tagged with the troll label. Last year, a suit against eBay by a small Virginia outfit called MercExchange went all the way to the Supreme Court, after a jury awarded the company $35m in damages, and Research in Motion forked over $612m to another Virginia company, NTP, as a federal court threatened to shut down its Blackberry mobile email service.

"This really hit home on Capitol Hill, because everyone there uses Blackberries," Perlman said. "They said 'Oh My God. Some little company can bring down our entire communication system? We have to fix that.'"

But he is adamant that trolls are the exception, not the rule. "Trolls have defined the bill. A bill should identify who the bad actors are and then sanction them. This bill doesn't identify the bad actors. It just sanctions everybody." Patent reform should deal with trolls, but not at the expense of legitimate inventors.

Mr. Perlman goes to Washington

Through lobbying groups like Coalition for Patent Fairness, the Apples and Microsofts may have pushed the bill through the House, but Perlman believes it's finally facing some stiff opposition.

Last month, Perlman and fellow inventor Dean Kamen, known for the Segway and the AutoSyringe, flew to Washington to lobby against the bill. And late last week, a group of more than 100 California-based bio companies and venture capitalists sent a letter of opposition to Diane Feinstein, the state's senior senator and a member of the Senate Judiciary committee.

"They're gathering the troops," Perlman said. "They're saying 'We're not going to let this thing slip through the Senate the way it slipped through the House.'" ®

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