US House panel backs patent overhaul bill

By Peter Kaplan

WASHINGTON, July 18 (Reuters) - A bill designed to overhaul the U.S. patent system by weeding out bad patents and reining in excessive litigation was endorsed by the U.S. House of Representatives Judiciary Committee on Wednesday.

The panel backed legislation backed by many software and technology companies that would give parties more leeway to question the validity of patents and limit damage awards in some infringement cases.

"Past attempts at achieving comprehensive patent reform have met with stiff resistance," Rep. Howard Berman, one of the bill's chief sponsors on the committee, said in a statement. "However, the time to reform the system is way past due."

"I hope to take this bill to the full House for a vote before we break for August recess," said Berman, a California Democrat.

A similar version of the bill was approved by the Senate Judiciary Committee last week.

Supporters of a patent overhaul, including many companies in the computer and software industries, say the U.S. Patent and Trademark Office sometimes grants questionable patents that lead to bogus lawsuits and excessive compensation in infringement cases.

These companies complain that many patent infringement plaintiffs are "patent trolls" who don't sell any products but seek to make money by suing profitable companies and holding them to ransom.

However, efforts to overhaul the system stalled in Congress last year, in part because of reservations by pharmaceutical and biotechnology companies and other patent-reliant industries.

Bills introduced in the House and Senate earlier this year have been modified by lawmakers in an effort to address critics' concerns.

However, a trade group representing many pharmaceutical and biotechnology companies said more changes should be made before the legislation is approved by the full House and Senate.

The Coalition for 21st Century Patent Reform, said it "continues to have serious concerns regarding the overall impact the bill will have on U.S. patents and the inventions they protect..."

The patent issue caught the public spotlight last year when a small patent-holding company nearly got an injunction to shut down Research In Motion Ltd.'s (RIM.TO) (RIMM.O) popular BlackBerry wireless e-mail devices. RIM settled the case after a judge made it clear that he would impose an injunction.

Patent issues got lawmakers' attention again in February when a federal jury in San Diego awarded Alcatel-Lucent ALU.PA (ALU.N) a record $1.52 billion after concluding that Microsoft had infringed audio patents.