Senators, Inventors Criticize Patent Bill Favored By Tech Cos
16 October 2009 - 11:07AM
Dow Jones News
Twelve Republican U.S. senators on Thursday sent a letter to
Senate leaders criticizing pending patent legislation, saying the
bill "threatens to diminish the value and enforceability of U.S.
patent rights."
The Oct. 15 letter backs criticism against the legislation being
levied by independent inventors and academics who argue the bills
favor major technology companies. If approved the legislation would
be the most sweeping rewrite of federal patent law in 50 years.
Critics say two similar bills now in Congress would broadly make
it harder for individuals, universities and start-ups to defend
their inventions against companies with deeper pockets. Opponents
are also upset that Obama administration officials with past ties
to International Business Machines Corp. (IBM) and Microsoft Corp.
(MSFT) are supporting the bill.
At issue is a provision giving outside challengers expanded
ability to initiate review of newly approved patents. "These
so-called post-grant review provisions, as currently crafted, are
quite problematic," the Republican senators said in the letter
written by Sen. Sam Brownback, R-Kan., and signed by 11 other
Republicans.
Microsoft and IBM are two of the most active companies involved
in filing patents; IBM, for example, earns over $1 billion each
year in intellectual property-related income. Both companies have
ties to top government officials with authority over patent policy,
including U.S. Patent and Trademark Office Director David
Kappos.
In testimony before Congress last March, Kappos - who was, back
then, the head of intellectual property at IBM - praised the
post-grant review. Kappos, who spent 26 years at IBM, said in an
interview Thursday that he recuses himself from IBM-specific
matters and has taken pains since his appointment to listen to the
concerns of independent inventors.
"If I wanted to do the right thing for a specific company, I
could have stayed there," he said. IBM declined to comment.
Kappos also said he told lawmakers in private meetings they
should establish a high threshold for reviews and include
safeguards against serial challenges.
But even one post-grant review can cause an inventor to lose
market advantage and venture capital funding.
"Patent certainty is critical to the ability of a venture
capitalist to be able to invest," said Kelly Slone, director of the
National Venture Capital Association's medical industry group. More
than a dozen research universities have also sent letters opposing
the post-grant review provision.
Microsoft, too, has connections in the Commerce Department. Marc
Berejka, a senior official handling intellectual property matters,
worked for Microsoft for the 12 years leading up to his July 2009
hiring, including eight years as a lobbyist for the company.
Commerce Secretary Gary Locke, who endorsed most of the bill in
an Oct. 5 letter, received campaign donations from Microsoft
employees as Washington state governor. Locke accepted $96,900 in
cash donations from company employees while running for re-election
in 2000, according to state public records. In total, Locke raised
$3.8 million in that election cycle. He also owned between $100,000
and $250,000 of Microsoft stock until divesting it on June 22 as a
condition of his appointment.
A Commerce spokesman said the agency is deferring to Congress on
how to alter patent laws.
Pat Choate, an economist and board member of American Innovators
for Patent Reform, said he was troubled by the process. "Patent
policy is suddenly being run by advocates for Microsoft and IBM,"
Choate said.
But some representatives of small companies say they think the
government is trying to work in good faith.
"It is certainly the case that big companies have a lot of very
well-qualified people who work with them and then go and do other
things," said Brian Pomper, executive director of Innovation
Alliance.
-By Kristina Peterson, Dow Jones Newswires; 202-862-6619;
kristina.peterson@dowjones.com