Congress Prepares

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Congress Prepares for Patent Donnybrook

By Neil Munro

Staff Writer

Congress is preparing to reform the nation's patent laws, setting the stage for a repeat of last year's bitter battle between large corporations and an alliance of small companies and inventors.

The alliance of inventors and smaller companies is led by Rep. Dana Rohrabacher, R-Calif., who is proposing a patent-reform bill in opposition to a rival bill supported by large corporations, such IBM Corp. and Microsoft Corp. The industry bill is sponsored by Rep. Howard Coble, R-N.C.

But the outcome of the debate will hinge on pressure from a third party - the research universities, according to Biff Kramer, a lobbyist for the Washington-based Alliance for American Innovation, which backs the Rohrabacher bill. "The universities will be a prevailing factor," he said.

But the universities have not weighed in on the dispute so far, opposing only a provision in the industry-backed bill that would ease legal challenges to patent applications.

Another critical factor are the views of senior Republican leaders, including Rep. Newt Gingrich, R-Ga., and Dick Armey, R-Texas, who can shape the battle by giving preferable treatment to any of the patent reform bills being pushed by the two sides. In 1996, Gingrich did not push for earlier versions of either Rohrabacher's bill or the industry-backed bill, effectively preventing both from winning any time for a debate and vote by the House of Representatives.

Rohrabacher "is reasonably convinced that his bill, along with the others, will reach the floor [for a vote by the House of Representatives] before August," said a member of Rohrabacher's staff.

By late February, Rohrabacher claimed his bill had won sponsorship from 42 members of Congress. In 1996, a similar bill by Rohrabacher eventually won 207 sponsors in the 435-member House.

"We believe that Mr. Coble will have 100 sponsors for his bill by the end of March," said Herb Wamsley, director of the Washington-based Intellectual Property Owners Association, which opposes Rohrabacher's bill. "I don't think [Rohrabacher] will have 100 by March," he said.

Whatever the outcome in the House, a similar debate faces the Senate, where Sen. Orrin Hatch, R-Utah, chairman of the Senate Committee on the Judiciary, is drafting a patent-reform bill. In 1996, he introduced a bill backed by the large companies.

The coalition of 80 large companies, dubbed the 21st Century Patent Coalition, includes IBM and Microsoft as well as Intel Corp. and a variety of information technology companies. The coalition's lobbyists are trying to build support for a bill introduced by Coble, the chairman of the House Judiciary Committee's panel on intellectual property.

The bill is also backed by the White House and Bruce Lehman, director of the Patent and Trademark Office.

Coble's bill, HR 400, is titled The 21st Century Patent System Improvement Act. If passed, it would allow the Arlington, Va.-based Patent and Trademark Office to become a government-owned corporation, giving it some measure of independence from government personnel regulations while keeping it under top-level control of the Department of Commerce. The bill would allow patent applications to be challenged by companies with similar technology, and require patents to be published 18 months after being filed at the PTO. It would also give patent holders at least 18.5 years of protection even if their patent application is delayed for several years in the PTO.

"Many of the provisions of HR 400 will be especially useful to small businesses - some of whom will not survive if foreign competitors continue to operate on a tilted playing field" caused by the different patent publication rules in Japan and the United States, according to a statement from Coble's office.

Rohrabacher's bill, HR 811, The Patent Term Restoration Act, is intended to reverse a patent-law change passed by Congress in 1995, when it required that the PTO grant patent protection for 20 years after the patent is first filed. The small inventors allied with Rohrabacher oppose this law, saying lengthy reviews by the PTO - and legal challenges by larger companies - can reduce the effective term of patent protection by many years.

Rohrabacher's bill would give companies and inventors protection for 20 years after the patent is filed, or for 17 years after the patent is approved by the PTO.

Rohrabacher's bill would also bar the PTO from publishing a patent application until it was approved, or until it has been filed overseas. The bar on publication is needed to prevent large companies - and their lawyers - from copying inventions before they can be commercialized by small companies and inventors, said the staff member.

But patent applications should be published after 18 months to prevent unfair lawsuits against companies for the violation of technology hidden in so-called "submarine patents," said Wamsley, who works closely with the 21st Century Patent Coalition.

Submarine patents is the term used by large companies for technology hidden during the PTO's review process. Once the patent is granted, companies using similar technology can face patent infringement lawsuits from the patent owner.

However, Rohrabacher has tried to sink the submarine patent issue by allowing the head of the PTO to publicize technology awaiting patent approval if the inventor tries to extend the review process, delay final approval beyond five years, or seek patent protection overseas, said a staff member in Rohrabacher's office.

But "we think it is very difficult and expensive for the PTO to make an investigation of every case," said Wamsley. "Clever patent lawyers could find a way to delay and still avoid publication," he said.

So far, universities' technology managers have not chosen sides in the battle, except for the third-party re-examination proposals in the industry-backed bill, said Terri Willey, director of the Norwalk, Conn.-based Association of University Technology Managers. The provision would allow outside companies to challenge any patent proposal being reviewed by the PTO, and "could put universities at a disadvantage," Willey said.

Universities are not concerned about the requirement to publish patent applications 18 months after they are filed, because they already publish their research, she said.

In addition to the Rohrabacher and Coble bills, Rep. Duncan Hunter, R-Calif., has proposed a bill that would bar Congress from spending patent-application fees on other programs. The White House's 1998 budget request would divert $92 million from the PTO for other purposes.

Coble has also proposed a third bill, HR 673, to bar the transfer of funds. However, this bill is not included in Coble's HR 400 bill, suggesting that it has a low priority, said opponents.


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