Patently-O Bits and Bytes No. 27

51 thoughts on “Patently-O Bits and Bytes No. 27

  1. “Checks up until then had to be flown all across the country, to be correctly processed, in their paper form. … If we did not need paper checks to be flown across the country to be processed, obviously we would be much less vulnerable.”

    … a KSR need/reason?

    … or was the ability to create electronic versions of paper documents a long felt, unmet need? lol

  2. The smell test is an interesting criterion to judge public policy and maybe it all depends on where you are standing. DT sees suing banks a a lucrative business and they are undoubtedly upset to see any concerns, greater than they pocket books, play a role in policy formulation. DT is out to make money anyway possible. They have quite producing products for clients and now focus exclusively on attacking banks (Small Company Is Specializing in Suing Banks, NYT Dec. 25, 2004).

    lower, the reason the personality of the DT CEO is important it that it demonstrates a trend. This guy would sell (or at least sue) his own father for a buck. When the going got tough, he robbed an armored car. Sure, we all deserve a second chance but lets be reasonable. The CEO has been anti-banks since 1990 (judging by his actions). Since folks (we average Joes) tend to frown on bank robbery, he is trying to use the judicial system (the arbiter of justice in our society) to lay claim to every penny he can see- earned or unearned.

    Banks do compensate DT for the technology of imaging and transferring checks. So don’t try to say this poor inventor isn’t getting his due. The problem is that DT wants its due, plus everyone else’s.

  3. Dear lower,

    Although I am not familiar with the DataTreasury particulars, I read your post and, absolutely, I agree with everything in your post.

    My question is this: If it is a national security matter, why doesn’t the government exercise eminent domain in return for fair compensation?

  4. Johnathan Scott,

    The reason so many of us on this board dismiss the national security implications is because the banks’ actions stink. In trying to get legislation passed that specifically allows them to infringe these two patents, we suspect that the banks are trying to evade the law, i.e. 35 USC. We generally believe that all persons are equal under the law, and this legislation violates that belief.

    Saying electronic processing of checks is necessary for “national security” does not make it so. The problem is, as MaxDrei notes, that “national security” could be used to justify anything. Can you name something that national security would not justify? Pres. Bush hasn’t found it yet, as far as I can tell, and I’m a Republican who voted for him.

    I’ll give you one example of good reasoning. Congress decided to exempt patents on medical procedures from enforcement because they didn’t want to prevent a doctor from using the best procedure to save a life b/c he was afraid of infringing a patent. That’s good reasoning b/c it cuts two ways, justifying noninfringement for some patents, but not others. National security never cuts both ways – have you ever seen someone say national security justified PREVENTING the government from doing something?

    Saying electronic processing of checks is necessary for “national security” is not the same thing as saying banks must infringe the DT patents. Why can’t electronic processing of checks be done by a method that is not covered by the claims? One goal of the US patent system is to encourage innovation by giving people an incentive to design around the patent. If the patents can’t be designed around, then take a license. A quick scan of Google News tells me several banks have done just that. This is the way the patent system is supposed to work.

    Whether the patent is valid is an important point. DT played the game by the rules. I generally believe that it is unfair to change the rules in the middle of a game.

    DT is a company that made something: the two patents. I’m sure they offered their product to the banks. The banks decided, thanks, we’ll use your product without paying for it. That’s why DT sells nothing – the banks wouldn’t pay. That’s why DT has no clients – the banks wouldn’t pay. That’s why their business is suing other companies and they spend all their time in court- the banks wouldn’t pay.

    I assume you’re a lawyer – when your clients don’t pay your fees, do you just write it off, or do you try to collect? I assume you’re a consumer – when you don’t pay your bills, do your providers write it off, or do they send you to collections? It’s the same thing for DT.

    What kind of press coverage would DT be getting if the banks had all taken licenses? Probably coverage along the lines of “here are people that represent what is good about America. They came up with a moneymaking idea and were able to profit off it.”

    What does the fact that the CEO was convicted of robbing an armored car in 1990 have to do with whether or not he can get and assert a patent? He served his time and paid his debt to society. America believes in second chances. That’s why you get three strikes in baseball, two free throws in basketball, discharge of debts in bankruptcy, and two chances to amend your claims during prosecution.

    This kind of legislation doesn’t pass the smell test. It stinks. If it doesn’t pass the full Senate, we can chalk it up to Congress taking a stand for truth, justice, and the American way.

    Congress’ already low approval rating can only sink further when
    the public finds out our Senators are letting the banking industry strongarm a two-person company so they can make themselves richer.

    And I’m pretty sure JAOI can agree with most of the above.

  5. Sure Max, my pleasure.

    After 9/11, all of our airlines were grounded for days. Checks up until then had to be flown all across the country, to be correctly processed, in their paper form. Because the planes were stuck on the tarmac, $50 billion worth of checks were also for days after 9/11. It’s easy to imagine what this did to our economy, with $50 billion in transactions frozen due to terrorist acts. Hutchinson points out the Fed had to intervene and inject huge amounts of liquidity into the market to prevent a major liquidity crisis. This isn’t exactly desireable monetary policy, but it had to be done.

    Check21 sought to prevent this from ever happening again by allowing banks to accept electronically processed checks. If we did not need paper checks to be flown across the country to be processed, obviously we would be much less vulnerable. Unfortunately most banks are not making the switch largely because they fear liability to Data Treasury, who has proved a very aggressive litigator. It’s something around only 4% of banks have switched entirely to electronic processing, without a paper duplicate. Should another attack happen again today (God forbid) we are no less vulnerable than we were in 2001 in terms of our economy, and financial industries.

    It is easy to ignore national security implications involved in the economy. But that is perhaps where we are most vulnerable. By removing the liability to DT, Congress is opening the way for banks to switch to electronic processing.

  6. Can somebody help me with the Data Treasury “national security” point. I’m a bit suspicious. If you want a stick with which to beat those with scruples who demur, whatever the issue, and whether or not it has anything at all to do with national security, there is no bigger and better stick than the cry “prejudices national security”.

  7. It’s a little disconcerting how easily so many of these posts dismiss the national security implications of Data Treasury’s actions. Even worse, how many of these posts seem to think the banks are more morally blameworthy than Data Treasury.

    Hutchinson’s op-ed is very accurate in that it acknowledges this legislations main purpose: to amend Check 21 and ensure that our nation actually becomes more secure. Congress’ approval rating is already low enough, it could only sink further if the public found out our Senators are letting a two-person company strong arm the entire banking industry, so they can make themselves richer. And to make matters worse, they are interfering with national security legislation knowingly so they can make a profit. (While we’re discussing moral blameworthiness, anyone unfamiliar with the backgrounds of the individuals behind Data Treasury should look this up. The CEO was convicted of robbing an armored car in the 1990′s!)

    Whether the patent is valid is not even the point. It makes sense for opponents of this legislation to focus on this issue however, because the more the rest of us can be distracted from the real national security issue at hand, the better off they are.

    The fact is Congress is intervening because that is what Congress does–it changes laws, intervenes in business and the economy, generally regulates society. National security is a top priority for both parties right now. That is why this legislation to amend Check21 and abolish liability to Data Treasury was approved unanimously in committee. If it doesn’t pass the full Senate, we can chalk that up to expensive (and intensive) lobbying efforts purchased by Data Treasury. However, I don’t think that will happen, but if it does it would be a shame to have our Congress in addition to our banks held hostage by a two person company that makes nothing, sells nothing, has no clients, and spends all of its time in court. More than a shame, it would be a sham…

  8. Thanks EP. Method of protecting a joke I see. I guess the prio at the UK PTO has long ago lapsed, with no search report. Wonder when a USPTO search report will emerge. Can’t imagine there’ll be any novelty-destroying art in it though. The technical field of “protecting jokes” is surely virgin territory for patenting.

    Wonder how the claimed subject matter stacks up against the 101 “transformation” test now being advocated, in the context of Bilski at the CAFC.

  9. jbe88:

    Senator Sessions’ amendment, and Asa Hutchinson’s defense of it in the Times, illustrates the problems with the bill – the provisions are based on misunderstandings (at best) or outright misrepresentations (at worst) of the situation.

    The facts are that the Data Treasury patents have been re-examined twice, as well as upheld by litigation. There are few patents that could be considered more valid than these. Also, the idea that an inventor who happens not to be a big corporation is less entitled to protecting her IP is close to being anti-American – isn’t this the American dream? Coming up with an idea, satisfying the requirements of the law and getting a patent to protect yourself from corporate predation?

    Finally, the law was passed well after Data Treasury obtained its patents, and several banks have done what the infringing banks should have done – taken a license. The fact is the proponents of this bill seem to care much more about their financial friends than the nation’s security.

  10. “Do any of you realize that the fees paid by Mr. Grace exceeded the cost to the PTO for examination, and that he helped to keep an examiner gainfully emplyed? Not to mention the other civil servants he helped out with his excees fee?

    Some of you don’t have a very firm grasp of reality.”

    Mr. Grace filed as a small entity and paid the USPTO a whopping $474 to examine the case. I’m fairly certain a primary examiner’s take home pay alone multiplied by the number of hours per disposal for this case exceeds $474. That and I keep hearing about a backlog, perhaps the examiner’s time could have been better spent on more credible application.

    If you do some digging you’ll note Mr. Grace also filed application 10/440895 (US PGPUB 2007/0078664). Looks like an in-person interview was conducted for this application on the same day as the above above application.

    link to google.com

  11. “Congress is unlikely to ignore the national security underpinnings of the legislation.”

    That’s a shame, because the “national security underpinnings” are a complete red herring. These “underpinnings” might be a great reason to deny the patentee injunctive relief, but they have no rational connection to carving out a broader exemption to the patent law.

    “The question, however, is whether Data Treasury has valid patents for having laid claim to commonly used processing methods that banks, financial institutions and others had been using for years.”

    Is this a question that Congress should answer? If the stated facts are accurate, then existing law should take care of the problem.

    I also like how the op-ed implies that the Check 21 regulations impose huge costs on the “private sector.” I have no idea whether this is true. However, if it is true that infringing the patent is required by law, and that infringing the patent actually costs the banks, what is a “reasonable” royalty? Zero?

  12. The Check 21 Amendment seems to still have some traction. An op-ed by former DHS top official Asa Hutchinson explains the merits of the claim – Congress is unlikely to ignore the national security underpinnings of the legislation.

    The full piece is found here: link to washingtontimes.com

    And a relevant excerpt:
    “Let’s be clear: A company should be compensated for a competitor’s infringement on its patents. The question, however, is whether Data Treasury has valid patents for having laid claim to commonly used processing methods that banks, financial institutions and others had been using for years.

    The claim of the patent holder in this case, compared to the national-security needs of the nation, is further undermined when it becomes clear that the company in question neither invents new products nor sells them. To quote the New York Times, this is a company “whose only business, other than one client, appears to be suing other companies.” (“Small Company is Specializing in Suing Banks,” New York Times, Dec. 24, 2004) One issue that rises above the validity of the patents is the role of the federal government in prompting the private sector to take certain actions. When the government dictates to the private sector, inevitably the latter faces certain costs. This is why government interference in the private sector should be done with extreme caution.

    In this case, due caution was given, but the enormous responsibility for the safety and security of American citizens outweighed the specific and narrowly tailored costs to the private sector.

    To address this unintended obstacle to realizing its intent, the Senate Judiciary Committee introduced bipartisan legislation that passed unanimously last summer. The legislation would protect the financial system, respect legitimate intellectual property rights and prevent frivolous lawsuits by clarifying the regulation for the financial system, for national security purposes, to efficiently process checks and transfer funds.

    As patent-reform legislation heads to the full Senate for a vote, it’s critical this legislation be included. Speedy passage will ensure that we close critical gaps in our nation’s financial security that should have been addressed years ago.”

  13. Do any of you realize that the fees paid by Mr. Grace exceeded the cost to the PTO for examination, and that he helped to keep an examiner gainfully emplyed? Not to mention the other civil servants he helped out with his excees fee?

    Some of you don’t have a very firm grasp of reality.

  14. RE: ” Dan Feigelson” comment,

    I could initially understand why you don’t think what Grace did deserves a severe penalty (but, after reviewing the case, I can no longer understand your position & my opinion has changed).

    What I really do NOT understand is why you think he should be defended. Can you explain WHY his actions should be defended.

    Yes, on its face, it initially sounds like a sweet way to propose (if you like that kind of stuff ;) ). And if he abandoned the case b4 the 1st action or even after the 1st action, no big deal. Maybe a small waste of PTO time & expense, but not that much & he paid for it. So, OK.

    But, not only does he NOT let it go abandoned, he then also INTERVIEWS the case after the action (apparently requiring the SPE & examiner (primary) to sit in on it). And then, to top it off, he files 12 pages of response, as well as amendments to a totally frivolous case! THIS is when it clearly goes from a cute novelty to abuse of the system & a waste of govt. resources!

    NO ONE with any reasonable amount of sense could honestly say that this application & claims has ANY merits as an actual patent. It is a total waste of time & expense. And it is unlike things like the “stick” patent or the IBM bathroom reservations patent, which had something that could actually support a patent. And it is unlike some of the craazy cases we see where the applicant is clearly not completely in the real world. This is from a registered patent lawyer that is F-ing with the system for no other reason than to “mess” with it.

    The more I review the application history, the more I agree with the poster above that some disciplinary action (not disbarment or such, but something) should be done to this attorney as an example to those that will file and prosecute CLEARLY frivolous applications. Just like they can do for those that file clearly frivolous law suits.

    Take a look at the file history & see what actually has gone on with the case.

    MVS

  15. Lighten up Jim H. I realize that you may think that filing a patent application that’s unlikely to go anywhere is right up there with murder and rape on the “thou shalt not” list, but most of us can think of a few more serious offenses against humanity. Heck, on the “contributors to the backlog” scale, most of us think he doesn’t even rate a mention. And can any of us prove that Mr. Grace himself thought the application was frivolous?

    If you want to file a complaint with OED, then please use your real name in doing so. When you do, I’m sure there will only be a few hundred of us ready to defend Mr. Grace. You might also want to be sure that you yourself won’t be subject to a complaint pursuant to 37 C.F.R. 10.23(c)(12), which says one of the things that constitutes unacceptable conduct is
    “Knowingly filing, or causing to be filed, a frivolous complaint alleging a violation by a practitioner of the Patent and Trademark Office Code of Professional Responsibility.”

  16. Without having read Mr. Grace’s application in full, did the poor fool wait to use the publication to “pop the question”? And did an expected 18 mo. wait turn into over 4 years? If he didn’t know enough to file a request for early publication to advance the ball, you have to wonder…

  17. “My guess is that this was originally filed in response to some “person” who has been trying to get things like movie scripts and book plots patented. Things that, in my opinion, at least, are clearly NOT patentable.”

    That person is Andrew Knight. Just last week non-final rejections were sent out on all of his applications. See 10/722,473, 10/846,544,10/861849 & 10/869,082. All claims got 101 rejections

  18. Jim H. – You would take someone’s livlihood for filing a silly patent application? Here’s hoping you never get anywhere near a judicial position. Sheesh.

  19. RE: “No One in Particular”

    That particular patent WAS a legitimate invention if you read the spec. The thing is the claims were very, very broad. And the subject is funny. So it raised a big flack. And, another big problem is that there was good prior art (102b if you find the foreign (UK?) priority doc. for a corresponding US ref.)
    However, the spec is not a “waste of time” or “$tupid” idea like some would claim. It had to do with balancing the load on a plane rather than having a lot of people congregate at the bathroom waiting their turn. Probably also security reasons since 9/11.

    Things like inter-dimensional travel, faster than light spacecraft, movie scripts or how to propose are what are a waste of resources.

    re: #84k examiner
    Check the “inventor” for that application. Hint: his initials are GA. Not a serious application, is my guess, just a “point maker”.
    My guess is that this was originally filed in response to some “person” who has been trying to get things like movie scripts and book plots patented. Things that, in my opinion, at least, are clearly NOT patentable.

    thanks,

    LL

  20. RE: “Method of Telling a Joke”.
    I am relatively a new examiner.

    Well…I finished my work for this week and got curious about finiding the application filed by the UK attorney related to “Method of Telling a Joke”.

    I didn’t find it….it might have been not published yet. However, I found (US 2008/0070711) while searching for (UK and joke) in EAST (a patent db that we use for searching).

  21. Jim H. wants to file a formal complaint against Mr. Ryan Grace.

    How about the attorneys who filed the application for IBM that resulted in U.S. Patent 6,329,919 “System and method for providing reservations for restroom use?”

    For those those who are unfamiliar with this gem, Claim 1 is:

    1. A method of providing reservations for restroom use, comprising:

    receiving a reservation request from a user; and

    notifying the user when the restroom is available for his or her use.

    And if “Sir or Madman” is sucessful with his patent application he may need permission from IBM to use the bathroom.

  22. “Just for sh-1ts and giggles (and because I have nothing better to do this weekend), maybe I’ll file my own applications on, oh I don’t know, maybe (1) a method of brushing my teeth with a toothbrush, (2) a method of wiping my a$$ after taking a sh-1t, (3) a method of pleasuring myself while looking at p0rn on the internet, etc, etc, etc.”

    I’m for it. You’d be employing examiners and entertaining us.

    You and Jim H should get together and do a stand up routine.

  23. April 11, 2008
    Director, United States Patent and Trademark Office
    PO Box 1450
    Alexandria, VA 22313

    Re: Formal Patent Bar Grievance against Mr. Ryan Grace, PTO Registration No. 52,956

    Dear Director:

    This is a formal complaint against Mr. Ryan Grace for what appear to be at least one ethical offense under Part 10 of Title 37 of the Code of Federal Regulations pertaining to his U.S. Patent Application No. 20070078663.

    As a registered practitioner before the Office, Mr. Grace certified that an application for patent was not being presented to the Office for any improper purpose. In claim 32, Mr. Grace states that an application for patent may be used “to offer marriage[.]” In claim 1, Mr. Grace states that an application for patent may be converted “into an offer to marry[.]” By his own admission, he seeks or has sought to use an application for patent not the proper purpose of obtaining a patent but for the improper purpose of offering marriage.

    Given the seriousness of this matter, Mr. Grace should be immediately and temporarily suspended from the practice before the Office, as provided by your Rules until final disposition of this matter, and I hereby request that immediate suspension now.

    Regards,

  24. Examiner Mooneyham must be the least romantic person on earth. She states, and I quote, “The Examiner asserts that the method claim does not produce a real-world result, or beneficial effect and thus has no substantial application.” Pg. 11.

    While some may agree that marriage has no beneficial effect, there is no argument that it does not produce a real world effect.

  25. - No invention was made “prior to” the filing of the application. His invention “was” the application. -

    I’ll merely point out that, unless Mr. Grace somehow drafted the application instantaneously and contemporaneous with filing, his invention clearly was made “prior to” filing.

  26. Never mind Mr Grace, what about the UK patent attorney who drafted and recently filed at the USPTO an app entitled something like “Method of Telling a Joke” which was intended (thoughfully written) to have utility in that it might stimulate debate about 35 USC 101 issues. Dennis, has it published yet? Can any reader stump up the A publication number. Maybe the logic of the various Bilski Briefs could be run up against it.

  27. how can it possibly be a waste of government resources… when the filing fees exceed the cost of the prosecution?

    (and if they did not, the fees are too low).

    look at the application backlog in this way…. and you quickly realize the government has left free money by the side of the road by failing to staff up/pay examiners a living wage so they stick around – and adjusting the fees accordingly if required.

    throw the pto management out and get somebody in there that understands basic economics.

  28. Look at the merits of the “invention.” No invention was made “prior to” the filing of the application. His invention “was” the application.

    I am glad to know that Mr. Grace thinks the PTO is there to provide him with his personal amusement. It cannot be for any invention made prior to the application.

    I cannot be jealous with such a poor exercise of attorney judgment. Of course, the exercise of such judgement may prove the right stuff for the “right potential clients.”

  29. RE JOBS: I have heard from several employers that hired employees through the Patently-O Jobs site. Of course, you will notice that most jobs are for experienced patent attorneys in a specific technology areas — those are difficult to fill, and a corporate head hunter would charge $30,000 or more to find an individual. This is a low cost way to test the waters.

    The site receives well over 30,000 visits per month. So, it is also a cheap way to advertise if you want to send the message: “Our R&D department is so innovative that we we need to hire more patent attorneys.”

  30. Get a sense of humor, people. Better yet … quash your jealousy at above-ordinary creativity. The man had mad skills, and probably still does. I would expect that for the right potential clients, that app is a big selling point on his legal services.

  31. I love how Grace’s bio mentions he’s the inventor of a patent application like it’s a real qualification. :P

  32. Mr. Grace is as bad or worse than the administrative law judge who sued the dry cleaner for millions of dollars. He made the legal system look bad.

    As a patent attorney, Mr. Grace has made the patent system look bad by taking it to the level of absurd. What a waste of time, human talent, and governmental resources.

  33. “Anon,

    GET A FRICKIN’ SENSE OF HUMOR!

    GET A LIFE!”

    So I guess it’s perfectly reasonable to outright waste government resources so long as you’ve paid the fee for doing so? The fact that this guy even mentions this on his firm bio page is tops. I hope his clients are equally amused.

    Just for sh-1ts and giggles (and because I have nothing better to do this weekend), maybe I’ll file my own applications on, oh I don’t know, maybe (1) a method of brushing my teeth with a toothbrush, (2) a method of wiping my a$$ after taking a sh-1t, (3) a method of pleasuring myself while looking at p0rn on the internet, etc, etc, etc.

  34. Hey Dennis, do you get any feedback on whether the jobs posted here are actually filled by people who saw your ads, rather than other means of advertising?

  35. “However cute or amusing Mr Grace’s application might be, consider that REAL PTO resources (i.e. Examiner time) were spent searching, examining, and responding to these ridiculous claims. It’s sh-1t applications like this that help to contribute to the current backlog at the PTO.”

    Yes, because we all know that the odd quirky application like this is the real reason for the backlog rather than huge companies filing multiple applications for every little design change no matter how trivial.

    I’m so concerned about this, I’ll even draft a memo for the PTO. It’ll go something like this: No more silly applications, people. We don’t care that you’ve paid fees enough to cover the costs of examination. We’ve got corporate masters to serve.

  36. I couldn’t help it, I had to see what the first rejection was to the Grace app.
    Enablement: “Moreover, it relies on the controlling of human behavior and due to the subjectivity of each individual, one skilled it the art would not be enabled to make or use the invention *without undue experimentation*.”

    Heh heh heh. Too funny.

  37. Anon,

    GET A FRICKIN’ SENSE OF HUMOR!

    GET A LIFE!

    Sheesh, even JOAI (pronounced “Joyless”) appreciated how clever this was.

    Bad Joke Ahead: LOL!

  38. However cute or amusing Mr Grace’s application might be, consider that REAL PTO resources (i.e. Examiner time) were spent searching, examining, and responding to these ridiculous claims. It’s sh-1t applications like this that help to contribute to the current backlog at the PTO.

  39. From: pianews-l-bounces@piausa.org [mailto:pianews-l-bounces@piausa.org] On Behalf Of PIAUSA.org News Distribution List
    Sent: Thursday, April 10, 2008 12:07 PM
    To: PIANews-L@PIAUSA.org
    Subject: [PIANews-L] **** Shutdown – Patent Reform Being Held Up ByRepublicans ****
    Importance: High

    About a quarter past 10 AM today Senator Arlen Specter (R) announced on Cspan that so called Patent Reform legislation was being held hostage over the judicial nominees. Yesterday he withdrew his support for the Patent Reform bill.

    During the last session of Congress the Republican party faced a no win situation with patent reform. Today the Democrats also face a no win situation with Patent Reform due to labor’s growing opposition.

    I have to take my hat off to whoever conceived of this tactic to dump Patent Deform legislation. It is brilliant and I am more than a bit peeved that I did not think of this.

    Everyone gets rid of a hot potato and in the process the Republicans gain leverage in addition to getting rid of a bill which no one except a handful of legislators who have milked the Coalition for Patent fairness & Piracy really wants.

    Ronald J. Riley,

    Speaking only on my own behalf.
    Affiliations:
    President – http://www.PIAUSA.org – RJR at PIAUSA.org
    Executive Director – http://www.InventorEd.org – RJR at InvEd.org
    Senior Fellow – http://www.patentPolicy.org
    President – Alliance for American Innovation
    Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
    Washington, DC
    Direct (202) 318-1595 – 9 am to 9 pm EST.

  40. I wonder if Young Mr. Grace will file another application when he and his wife invent a small entity.

  41. Thank you.

    Too bad that no one, including Specter, Leahy or the CQ reporter seems to actually know what the “current law” on appportionment is. Neither do the courts, but what else is new?

  42. CQ TODAY ONLINE NEWS
    April 9, 2008 – 3:54 p.m.

    Patent Overhaul Loses Key GOP Supporter
    By Seth Stern, CQ Staff

    Patrick J. Leahy, the chairman of the Senate Judiciary Committee, lost support of a key Republican on Wednesday as he seeks to hash out new language for legislation overhauling the nation’s patent laws.

    “I cannot join him on some parts of the bill,” said Arlen Specter, R-Pa., the committee’s ranking member. Specter said the issue of how to assess damages in patent infringement suits remains the “principle sticking point” between him and Leahy.

    Specter’s apparent defection is a blow for Leahy, who has been negotiating new language with him and Orrin G. Hatch of Utah, the lead Republican cosponsor. Leahy is preparing to bring the bill (S 1145) to the Senate floor later this month.

    Leahy has been expected to introduce his latest version of the much-anticipated bill for several days. He has reserved the Senate television studio for a news conference two days in a row this week, only to cancel both times.

    The bill has languished for months since being approved by the Senate Judiciary Committee July 19 as Leahy and Hatch sought to find compromise language that might satisfy the many affected industries.

    No issue has proven as difficult to address as how to establish damage awards for patent infringement. While current law bases damages on the value of the entire product, the legislation would set damages according to the fraction that the patented invention contributes to the overall value of a product. The high-tech firms want judges to have more leeway to gauge a patent’s importance to a product before a jury decides on damages. Manufacturers are leery of such a requirement.

    Leahy acknowledged he will need every vote he can find to advance the bill through the Senate and said he was disappointed with Specter’s stance.

    “I’ve given up things I wanted in the bill to accommodate the needs of Senator Specter and the needs of Senator Hatch and I would hope they would try to accommodate me but everyone has an absolute right to do whatever they want to do,” Leahy said.

    Leahy says he expects Hatch to remain a cosponsor. But Hatch has made clear this week that his continued support for the bill is contingent on the inclusion of his language regarding procedures for determining “inequitable conduct” on the part of patent applicants who file misleading statements or omit material with the intent to deceive the patent office.

    Hatch said he is optimistic Leahy will adopt his inequitable conduct language.

    The industry group representing the high-tech and financial services companies that favor the bill has brought in some big guns to build support. The Coalition for Patent Fairness has hired the new lobbying firm founded by former Sens. Trent Lott, R-Miss., and John B. Breaux, D-La., as well as former House Majority Leader Richard A. Gephardt, D-Mo.

    Source: CQ Today Online News
    Round-the-clock coverage of news from Capitol Hill.
    © 2008 Congressional Quarterly Inc. All Rights Reserved.

  43. I didn’t find Specter opposing the Patent Reform bill on damages grounds. CQPolitics says that he was opposing it to put pressure on the Democrats to confirm Bush’s judges.

    link to cqpolitics.com

    Dennis, did you find something else? And do you have a link?

Comments are closed.