Hi-tech allies challenge patent proposal
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A group of US technology companies has called for an urgent backtrack on a key piece of patent reform.

In a letter to US commerce secretary Gary Locke, the 59 hi-tech and medical firms have raised concerns over a clause in the 2007 Patent Reform Act that would implement reviews of patents after they have been granted. The group says that this would perpetuate a climate of no confidence in the examination process and leave the patent system open to abuse.

In the letter, the group highlights the Act's provisions for damages as an example of how the legislation could bring lasting benefits. The provision would differentiate between a product that has infringed a patent with a single component, and one that has been fully created for the purpose of infringing. Judges would be able to steer juries towards setting heavier damages in the latter case.

However, the group feels that post-grant reviews 'will have serious negative consequences' for the United States Patent and Trademark Office (USPTO). 'First, these proposals represent a huge risk for the PTO, which already is under severe strain as indicated in Congress's emergency approval to use trademark fees for patent functions,' said the group.

'Adding new obligations to the agency at this time seems extraordinarily unwise. Almost inherently, the basic patent examination function will suffer, with the result of longer patent pendency and lower patent quality. We do not want that. The health of the PTO is extremely important to us.'

The letter urged secretary Locke 'to support no proposal' that would undermine the USPTO's 'core mission'.

'Another troubling aspect of the post-grant review,' added the group, 'is that, as written, [it is] vulnerable to a high level of abuse. Specifically, the current construct of the proposals will allow infringers to subject valid patents to lengthy and repeat challenges.'

On this point, the group quotes a recent comment from Yongshun Chen, one of China's most prominent ex-IP judges. Observing the development of the new Act from overseas, Chen concluded that 'the proposed post-grant review procedure would … enable infringers to easily subject legitimate patents to consecutive attacks, creating much expense and uncertainty for the patent holder and those investing in the patent holder's business.'

The group adds that the clause would only play into the hands of companies that seek to target key patents and devalue them through continual re-examination. Far from providing a quick and efficient means of challenging patents that could offer an alternative to litigation, the clause would in fact slow down the patent system and compound legal woes.

'We agree on the goal of reducing the amount and cost of patent litigation,' said the group. 'We do not believe, however, that the … provisions, as drafted, will achieve this goal.' The letter asked Locke to 'push for improvements to these provisions which will limit the ability of infringers to undermine the very system the legislation attempts to strengthen'.

Global drug developer Allergan and audio specialist Dolby Laboratories were among the 59 signatories. The legislation is pending before the Senate.