Dean and the US patent system reform in USA Today.

[Elgin Clock]

http://www.usatoday.com/money/compan...t-reform_x.htm

SAN FRANCISCO — Chip giant Intel, Segway scooter inventor Dean Kamen and a 20-person holograph-making firm from Vermont are among those lobbying Congress to change a troubled patent system they say costs the tech industry billions.



The long-underfunded patent office takes years to review some applications and many patents are improperly granted because examiners lack technical expertise, according to testimony to Congress last week from tech firms, universities and other inventors.

Patents — crucial to tech firms because intellectual property is often their most valuable asset — are contested in court, creating a flood of costly litigation, those inventors and companies said.

Microsoft, for one, says it is embroiled in 35 to 40 patent cases at any given time — racking up $100 million in legal fees each year. Even disputing a patent worth less than $1 million usually costs a company about $500,000, says the American Intellectual Property Law Association, a trade group.

To address these issues, Rep. Lamar Smith, R-Texas, at the hearings introduced an early draft of a bill for patent reform. There's lots of support for the general idea — but debate about the best way to get it done.

"Suggestions for changing the law have been accumulating," says Herbert Wamsley, executive director of the Intellectual Property Owners Association.

From 1992 to 2004, Congress diverted more than $750 million of the revenue generated from patent applications to other government agencies, Wamsley says. That left the office understaffed.

Under pressure from the tech industry, Congress stopped doing that during the current fiscal year, which ends Sept. 30. It also approved a fee hike. The patent office is using the money to hire 900 more examiners, especially those with technical backgrounds.

But many tech companies and trade groups say other changes are needed, including:

•A review period. Now, someone who objects to another person's patent has few options but to sue. A review period of nine to 12 months would let the patent office, instead of the courts, address complaints. That would be a simpler and cheaper way of settling many disputes, Wamsley and other advocates say.

•First-to-file. Today, patents are awarded to the inventor who comes up with an idea first — even if another inventor beats them to the patent office. The first to have the idea gets the patent. But that can be hard to prove. Some tech firms want the patent to go to the first person to file for one. Critics, such as William Parker, co-owner of hologram-maker Diffraction, say that would hurt small firms with few resources.

Legal questions are being debated, too, such as how hard it should be to get an injunction stopping a company from using a disputed patent.

It is unclear how long reform will take. An earlier round of patent reforms took a decade. But tech firms say they'll work hard to move as quickly as possible. "Patents are really the currency of innovation in the tech sector," says David Kaefer, Microsoft's head of business development. "To get (tech devices) to work together, companies need to collaborate and share. You need (patents) to allow that to happen."