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Could patent reform bill delay in Senate relate to formation of new industry organization?

Summary: There is mounting speculation that the Senate Judiciary Committee’s decision to temporarily delay major work on a patent reform bill is a result of increasing ...

There is mounting speculation that the Senate Judiciary Committee's decision to temporarily delay major work on a patent reform bill is a result of increasing public and industry criticism.

In fact, on Thursday, the same day as the hearing took place -- with Senators limiting their efforts mainly to making statements -- an announcement was made that Apple, DuPont, Ford, GE, IBM, Microsoft and Pfizer helped to form a new organization called the "Partnership for American Innovation (PAI)." The organization may not be an official lobbying group, but it will at least inform the public on what is in the best interest of these companies as far as patent reform.

Markup on the Senate's patent reform bill is now planned for Tuesday April 8, news reports said, and some compromises are likely.

But is it more than a coincidence that the PAI formation was announced on Thursday? It is also noteworthy that former U.S. Patent and Trademark Office (USPTO) Director David Kappos, who now works at Cravath, Swaine & Moore, was named as "a senior advisor" to PAI.

In a statement released on Thursday, the organization said "the conversation around patents has been dominated by those seeking to curtail America's strong system for narrow, short-term gains. Companies like those in the PAI support a strong, balanced system and are working together to make sure the conversation is driven by facts, not rhetoric, and reason rather than emotion."

In addition, Kappos warned, "Now is not the time to gamble with America's innovation engine -- once patent protections are eliminated, they cannot be restored."

"It is in our country's best interest to have a patent system that rises above short-term interests, and creates long-term gains for all sectors of the economy. We must move beyond rhetoric that 'the system is broken and trolls are bringing businesses to a complete halt' to a discussion of calibrated improvements for what is actually the best patent system our planet has," Kappos added.

But when it comes to the Innovation Act, the patent reform bill already approved by the House, and proposals now before the Senate Judiciary Committee, The Verge reported that PAI does not have an official position.

But The Verge added that PAI members Microsoft and IBM were key players in deleting a section of the House bill that would have "preserved a cheaper and faster method of declaring patents invalid."

In a statement to the Verge, Kappos said, "We're pro-reform, no problem with that at all, but we've got to be smart about the reforms, and we shouldn't be demonizing any entrants in the system."

InsideCounsel reported that there are concerns being voiced by both pro-business and pro-consumer groups over current proposals in Congress which try to reform the sometimes unwieldy patent system. The main focus of the Senate Judiciary Committee has been the Patent Transparency and Improvements Act, S. 1720, which was supposed to improve transparency and sought to remedy problems associated with patent trolls, also known as non-practicing entities.

Another pending issue for the patent sector relates to Alice Corp. v. CLS Bank International, a case now before the Supreme Court, which could help determine if software patents would be excluded from patentability.

Related Stories:

Senate urged to improve proposal on patent reform

Alice was asked aplenty

Go ask Alice: Supreme Court to hear arguments on software patents

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Publication:Inside Counsel
Date:Apr 4, 2014
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