HP says patent reform bill "in the final stretch"

WASHINGTON (Reuters) - Major U.S. high-tech companies, seeking relief from infringement lawsuits, are in the “final stretch” of getting a patent reform bill moving in the Senate, Hewlett-Packard Co, General Counsel Mike Holston told Reuters on Tuesday.

Reform legislation was approved by the U.S. House of Representatives on September 7 but stalled in the Senate because of stiff opposition from pharmaceutical companies and others who feared that proposed changes in the U.S. patent system would leave them vulnerable.

Drug maker Eli Lilly & Co, seed and herbicide company Monsanto Co and smaller tech companies say the bill would weaken patents that are their corporate lifeblood.

A Monday meeting of companies, industry groups and universities closely following patent reform gave the Senate bill fresh impetus, said Holston.

“We’re 95 percent of the way there. We’re down to four (sticking points),” Holston said in an interview, adding that Patrick Leahy, the chairman of the Senate Judiciary Committee, appeared at the meeting. “We’re in the final stretch.”

The bill is slated to go before the Senate in February, according to an aide to the Senate Judiciary Committee, which oversees patent law issues.

The sticking points involve calculating damages for patent infringement, limiting venue, allowing post-grant reviews and defining “inequitable conduct,” said Holston.

Under current law, 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 Senate bill would allow damages to be based on what the infringer would have had to pay if it had bought a license for the patent, according to a draft report that summarizes major portions of the bill.

Both the House and Senate versions of the bill would strengthen the post-grant review process by allowing anyone to bring proof to the federal patent board that a patent should not have been granted.

As for inequitable conduct, current law requires inventors to share anything they already know about similar research, often called “prior art,” in applying for a patent. Lawsuits are frequently filed saying this was not done, even in the absence of proof. The House and Senate bills would require proof that prior art was withheld before a lawsuit is filed.

The House and Senate bills would also crack down on “forum shopping,” the filing of patent suits in courts believed to be sympathetic to parties claiming infringement.

Reporting by Diane Bartz, editing by Gerald E. McCormick