Counsel to Counsel - January 2008 - (Page 30) in the spotlight PATENT PENDING: Putting Proposed Changes in Perspective By Nina Schuyler Don Farrall/Digital Vision A lthough Congress has long considered the patent system in need of an overhaul, not much has been done. But in 2007, lawmakers vowed anew to reform the system by proposing the most sweeping changes in more than half a century. A lot is at stake. A Cisco Innovation 2005 study found the most critical factor in a company’s success is innovation—far outweighing wage and tax issues. In the study, 53 percent of business leaders surveyed cited innovation as having the biggest impact on competitiveness. “Congress is trying to make the system more responsive,” says Lewis F Gould Jr., . of counsel at Duane Morris LLP and chair of the firm’s Intellectual Property group. “The trick is not to adversely impact the patent law system.” The most common complaint about the current system, says Mark Charles Comtois, partner at Duane Morris, is the length of time it takes to obtain a patent. According to the United States Patent and Trademark Office’s 2007 annual report, the average patent pendency is 32 months. A close second is the prevalence of “patent trolls,” patent speculators who use patents, not to manufacture products or services, but to collect royalties. House and Senate bills try to address both problems, but how successfully they do so is subject to debate. In September, the House passed its reform bill, but the Senate’s version has stalled. Together the bills contain 23 provisions, with little overlap. There are five common provisions, however, that are generating the most attention and controversy, and companies are urged not to wait to voice their views on the proposed changes. “People who have patents don’t like this provision because there’s a good chance if you apportion damages, you’ve made it cheaper to infringe rather than obtain a license.” 1. Apportionment of Damages Under current law, in determining damages, courts consider the value of the entire product when even a small piece of the product infringes a patent. Both bills limit damages to the component of the device that infringes on the patent. For instance, if a cell phone with a range of five miles is improved to a range of 20 miles by including a chip that infringes on a patent, the damages would be limited to the chip only. 30 LexisNexis® Martindale-Hubbell®
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