Innovators take patent bill battle to Senate

By Diane Bartz

WASHINGTON (Reuters) - Executives and lobbyists from some of America's richest and most influential companies are walking the halls of Congress, buttonholing senators to argue for strong patents to preserve U.S. innovation.

But they disagree on how to accomplish that goal.

High-tech firms like Intel, Hewlett-Packard and Cisco say they need patent legislation that reduces their vulnerability to a growing number of infringement suits.

While seed and herbicide giant Monsanto, pharmaceutical companies like Eli Lilly and smaller tech firms say the bill weakens patents and threatens American competitiveness.

After the U.S. House of Representatives passed its version of a patent overhaul bill on September 7, the battle has moved to the Senate where the measure could come up within weeks.

Both patent camps say they can win.

"If you brought this bill before the Senate tomorrow, I think it would pass," said Steve Elmendorf, lobbyist for the pro-tech Coalition for Patent Fairness.

A coalition opposing the bill disagrees, saying there are 33 undecided senators -- enough to put the bill's future in doubt.

Since the House passed its version, the two sides have reached agreement on some areas in the bill but one big sticking point remains: damages.

Under current law, damages can be calculated as the entire market value of the product, and that number can be tripled if the patent infringement is found to be willful.

Those opposed to changes in the damages provision say the costs of infringement should be high to protect their patents.

But big high tech companies argue this calculation is inappropriate for cell phones, televisions or other gadgets that contain a dozen or more patented features. Under the patent reform bill, damages would be based on the contribution that the infringed patent makes to the product.

"That is the big thing that is holding up patent reform in Congress right now," said Hans Sauer, associate general counsel for the Biotechnology Industry Organization. "Everything else is subject to resolution."

WHY THEY FIGHT

The driving force behind the legislation has been complaints by tech companies of a sharp increase in patent infringement lawsuits over the past several years.