- Thu. Aug. 28, 2008
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ISSUE OF THE WEEK
110th Congress, Round 2: Patent (Reform) Pending
Intellectual property policy issues have been high on the agenda of the 110th Congress - but, as the second session gears up, a number of bills working their way through the House and Senate might fall victim to a crowded, condensed legislative calendar and an increasing focus on the election season.
Lawmakers have not enacted comprehensive patent law reform in more than 50 years, and key members of both chambers made it their mission early in the 110th Congress to introduce and push forward a massive, multi-faceted bill. Both chambers' bills have attracted vocal fans and foes as they have moved through committees of jurisdiction.
The House version (H.R. 1908) passed in September by roll call vote of 220-175, and a debate on the Senate bill (S. 1145) is pending. Senate Majority Leader Harry Reid, D-Nev., said he wanted the measure on the floor early in the second session, with both legislators and stakeholders eyeing a mid-February timeframe.
But other, unrelated legislative efforts could get in the way: Coalition for Patent Fairness spokesman Steve Elmendorf expressed the hope that the patent reform measure would soon progress, but called the Senate schedule a "wildcard."
The coalition -- whose members include Apple Inc., Cisco Systems, Dell, Hewlett-Packard, Oracle, among others -- is a leading voice for a patent overhaul. But the biotechnology and pharmaceutical sectors, as well as the Innovation Alliance -- which represents firms that license patents -- oppose current versions of the legislation.
Supporters argue that the bills balance the apportionment of damages in infringement cases; establish fair standards for punitive damages; restrict "forum shopping" for courts that favor patent claims; and improve patent quality by providing a second chance for Patent and Trademark Office examiners to review potentially problematic patents.
Detractors such as the Innovation Alliance contend that the legislation as passed by the House and under consideration by the Senate "contains provisions that will create uncertainty and weaken the enforceability of validly issued patents."
The U.S. patent regime has undergone major changes through recent Supreme Court decisions and new PTO rules, noted Bryan Lord of AmberWave Systems, a firm that creates strained silicon for semiconductors. "Enacting a radical patent system overhaul before there has been time to understand the full impact of changes already made would be irresponsible and risky," he said.
The Coalition for 21st Century Patent Reform, which represents varied interests such as Eli Lilly, General Electric and Motorola, has called for "fair and balanced" legislation that promotes U.S. innovation while strengthening the patent system. Progress has been made in both chambers but more must be done to ensure that the bills do not favor infringers over inventors, the group argues.
Progress and Freedom Foundation fellow Thomas Sydnor said the fate of the bill is "difficult to call."
There has been substantial progress on areas of dispute "but the ones that remain are quite significant," Sydnor said, adding that patent reform is a "critically important issue and it is critically important to get it right."
Meanwhile, the second session of the 110th Congress also faces debate over several other IP-related concerns.
IP Enforcement Bill Gains Steam
House Judiciary Chairman John Conyers, D-Mich., took a bold step forward on the IP enforcement front when he introduced a wide-sweeping bill in December that was aimed bolstering protection amid growing piracy and counterfeiting concerns.
The bill, H.R. 4279, would increase civil and criminal penalties for infringers; create an executive-level office to oversee coordination of domestic and global copyright and trademark laws; and establish a permanent IP division within the Justice Department.
The legislation followed a similar IP enforcement bill authored by Senate Judiciary Chairman Patrick Leahy, D-Vt., and yet another measure introduced by Sens. George Voinovich, R-Ohio, and Evan Bayh, D-Ind.
Movie studios, musicians, manufacturers and others that rely on IP hailed the bill. The Copyright Alliance - whose members include Microsoft, NBC Universal and Time Warner, -- said that the measure "seeks to help individual creators in exercising their rights, while it also recognizes that improvements are needed in government coordination."
Others, such as copyright "fair use" advocate Gigi Sohn, have expressed concern over the section geared toward targeting commercial bootleggers and ramping up fines for copyright infringement.
Sohn, who heads the advocacy group Public Knowledge, said Conyers' bill also would move in a direction opposite from patent reform legislation, which would limit patent damages relative to actual harm. Conyers' legislation would expand "already extraordinary copyright damages," Sohn argued.
Existing law provides for penalties of up to $30,000 for each non-willful violation and up to $150,000 per willful violation. Critics say the legislation would wrongly disaggregate parts of a compilation or derivative work to triple or quadruple damages.
Rep. Howard Berman, D-Calif., who chairs the House Judiciary subcommittee with jurisdiction over intellectual property, partnered with the Copyright Office to bring together stakeholders for a closed-door discussion in January. Aides involved in the meeting cited progress and said talks are continuing.
Sydnor said the broad support for the bulk of the measure is "a pretty powerful signal to me that this is a very serious proposal and it's something they think is needed." However, he acknowledged, "It's is a big bill and that means the odds are against it."
Radio Royalty Bills Rile Broadcasters
Legislation that would eliminate a longstanding exemption granted to AM and FM radio stations, which allows them to play music without paying royalties, has generated a great deal of heat on Capitol Hill. The legislation, introduced in December by Leahy and Berman, will likely remain in the spotlight.
Under current copyright law, Webcasters, satellite radio services and cable companies pay artists for use of their sound recordings -- but over-the-air radio does not. The National Association of Broadcasters' lobbying blitz to kill the bills has labeled the effort as a "tax" on local stations. The bills propose an annual flat fee as a payment option for non-commercial radio stations, including public, educational and religious broadcasters. Commercial stations whose annual revenue is less than $1.25 million also would get reprieves.
More than 100 radio chart-toppers including Christina Aguilera, Celine Dion, and Patti LaBelle have voiced support for the Recording Industry Association of America-backed S. 2500 and H.R. 4789. Country crooner Lyle Lovett and folk singer Judy Collins testified at hearings on the legislation last year.
Broadcasters have amassed their own posse of 100-plus lawmakers, led by Reps. Gene Green, D-Texas, and Mike Conaway, R-Texas, who oppose the bills. NAB has also called attention to record label executives and artists who have noted the promotional value of free radio airplay at November's Country Music Awards and elsewhere.
A New Tactic For Fighting Piracy
The music industry's battle against piracy on college campuses took a novel turn last year when an Education Department bill aimed at making improvements to post-secondary institutions included funds for installing anti-piracy technology on college networks.
H.R. 4137 would force schools "to provide record labels a revenue stream" by requiring them to institute industry-sanctioned music-sharing programs such as Napster and Ruckus, according to Michael Petricone, a lobbyist with the Consumer Electronics Association.
The 750-page bill is expected to be voted on this month. Critics hope that an amendment to remove the latter language will pass on the House floor, or that it will be excised when the Senate and House reconcile their bills. The Senate version contains language that simply requires colleges to offer education about the dangers of illegal downloading.