Backed patent bill in trouble in U.S. Senate

WASHINGTON, April 14 (Reuters) - A long-negotiated patent overhaul bill sought by technology companies and opposed by big pharmaceutical makers is in deep trouble in the U.S. Senate, Democratic and Republican aides said on Monday.

Big high-tech companies such as Cisco and Hewlett-Packard began pushing for reform legislation years ago to cut the number of patent infringement lawsuits and the amount of damages paid.

A version of the bill passed the House of Representatives last September but a similar measure is stalled in the Senate amid vocal opposition from drug maker Eli Lilly & Co, seed and herbicide company Monsanto Co, and smaller tech companies that fear lower damages would leave them vulnerable to infringers.

"I wouldn't say the bill is dead, but let's say right now it's on ice," said one Democratic aide.

Senate Democratic leaders had hoped to bring up the bill in the Senate this week. But they postponed action indefinitely when negotiators failed last week to reach a self-imposed deadline to resolve differences, aides said.

The measure has drawn opposition mostly from Republicans and lacks the 60 votes needed in the 100-member Senate to clear a likely procedural roadblock, aides said.

"We'll try it again next year when we will have more (Senate) Democrats," said a second Democratic aide. Democrats have a slim majority in the Senate but are expected to add seats in the November elections.

"It's almost dead," said a Republican aide. "But people are still talking to each other. When they completely stop talking, then it is dead."

Tom DiLenge, general counsel of the BIO trade group which represents biotechnology companies, said he hoped to see a patent reform bill that eliminated "inequitable conduct" and "best mode" provisions that currently allow judges to throw out a patent if it was applied for improperly. Both have been the source of litigation.

He said that high-tech companies could also come out ahead, if they compromised. "They could get 85 percent or 90 percent of what they want," DiLenge told Reuters.

Mark Isakowitz, the high-tech firms' lead legislative strategist on patent reform, said the single sticking point was on damages. "We have an issue here that was literally one sentence away from being done," he told Reuters.

"I think the next step is really everybody is kind of taking a breath. ... I think they should take a breath too and see if they want to kill the bill," he said. "There are stakeholders on this bill that are completely intransigent and play by a set a rules where you don't budge."

Currently, damages can be calculated as the entire market value of the product. That number can be tripled when the patent infringement is found to be intentional or willful.

The tech industry -- which sells devices that can have many patented elements -- wants to reduce damage awards to deter people, who they privately call "patent trolls", from filing what tech companies say are unwarranted lawsuits.

The pharmaceutical industry, whose drugs often have just one or two patents, says it needs the threat of high damages to protect their intellectual property.

Some experts say the legislation goes too far.

"The central problem with all of these proposed changes is that they would inject far too much uncertainty and arbitrariness into the patent system," says Scott Kieff, who teaches patent law at Washington University School of Law in St. Louis. ...

•	Backed patent bill in trouble in U.S. Senate The Guardian (UK), Monday, April 14, 2008 Byline: Diane Bartz and Tom Ferraro, Reuters

	Story also ran in 10 others:  Reuters, Reuters (UK), PC Magazine, Insurance Journal.com, U.S. Daily, EETimes.com, Information Week Weblog (NY), Baseline (NY), eWeek (NY) and TECHWEB