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The Judge Dissents on Patent Reform

Alan Sipress

As Congress wrestles with legislation aimed at overhauling the U.S. patent system for the first time in half a century, the chief federal judge assigned to patent cases has weighed in. And he's raised serious concerns about one of the most far-reaching proposals.

The patent reform bill now being considered by Senate and House committees includes a provision revising the way that damages are calculated in the case of patent infringement. The proposal says the damages should be based on the value only of the patented invention and not on the whole product using the invention. So for instance, if a tech company violates someone else's patent on a software program by marketing a computer that includes this program without paying proper royalties, the company would be ordered to pay a fine based on the value of the program. Today, the company could be forced to pay greater damages based on the overall value of the computer.

Large tech companies that are out front in advocating the patent bill say they favor this new approach, called apportionment, because it limits their liability when they accidentally violate others' patents.

But Chief Judge Paul R. Michel, who presides over the special federal court assigned to hear the appeals of patent cases, said the proposed revision -- which he said would "radically change the law" -- would prove extremely costly and time consuming.

In a letter last week to the staff of the House Judiciary Committee, Michel noted that judges can already use an approach to apportion damages when they see fit. But he disagreed with the bill's proposal making apportionment mandatory, saying the result would be severe court delays, higher court costs and greater uncertainty over how to apply the law.

By contrast, he said the existing approach to damages has been refined over decades of individual court decisions. "This body of law is highly stable and well understood by litigators as well as judges," he wrote.

By Alan Sipress  |  June 14, 2007; 3:33 PM ET  | Category:  Alan Sipress
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The penalty for "incorporating" somebody's else patented software without paying for it should be the same as if the software had been "pirated" because it HAS BEEN PIRATED! It should be noted that the software companies are quite aggressive when it comes to suing against reverse-engineering.
In this Brave New World, for the same offense, the user gets thrown in jail with hundred of thousands in penalties, but the Microsoft, et al, pay with some pocket change full of lint.

Posted by: Bernard Pierre | June 18, 2007 12:16 PM

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