Last Friday, I presented “Patent Reform Update” as a guest lecture at Stanford Law School. Jeff Schox, a San Francisco-based patent attorney and long-time friend, asked me to help him with the ‘patent reform’ topic in his patent law class.

(yes…’patent reform’ has received syllabus-level attention in the country’s leading law schools for some time)

According to Grier C. Raclin, executive vice president and general counsel of Charter Communications Inc., patent reform legislation is necessary to guard against “existing loopholes” and to protect against “frivolous lawsuits.”

In this Op/Ed piece on STLtoday.com, Mr. Raclin invokes two powerful concepts – loopholes and frivolous lawsuits – that immediately resonate with folks having no legal background.

The “Dear Senator” letters and memoranda on patent reform have been flying fast and furious over the last several weeks.  The rhetoric of late is at an all time high and seems to reflect the “false choice” on innovation described by PTO Director Jon Dudas in his explanation of the Bush administration’s letter of opposition to the Senate bill (S.1145, The Patent Reform Act of 2007) – some describe the bill as an innovation killer while others paint it as necessary for the survival of some of our most innovative industries.

The letters are, for the most part, non-revealing because we’ve known where the lines have been drawn in this battle for so long.  Most contain the same recycled language and few present any new or interesting information, causing many of us that follow the issue to glaze over them quickly.

At least one should have raised our eyebrows, though.  According to this article from Inside Higher Ed, the Coalition for Patent Fairness, which counts Google, Microsoft, Intel, Micron and other computer/software companies as members, circulated a memorandum last week that claimed that the concerns raised by various educational institutions and related associations had been “addressed” by the bill and the committee review process.

Universities have strongly opposed several provisions of the various vintages of the Patent Reform Act…so an impression that their concerns had been “addressed” could cause one to believe that the legislation was a step or two closer to significant movement.

Not so fast, though.  Turns out the CPF memorandum was not, um, blessed by any single university or association.

A call-to-action alert from the National Association of State Universities and Land-Grant Colleges aimed to set the record straight:

“The briefing paper implies that all of the university community’s concerns with S. 1145, the Patent Reform Act of 2007, have been addressed.  CPF’s assertion is factually incorrect and misrepresents the position of the university community and individual institutions on patent reform legislation.”

Looks like there’s no harm from the gaffe, though…CPF claims it didn’t intend to suggest that the heavy lifting was done, and the Association of American Universities acknowledged that several important changes that address university concerns have been made to the bill.

Jon Dudas held a Q&A with the media this morning to discuss the recently-issued Bush administration letter of opposition (.pdf) regarding the Senate version of The Patent Reform Act of 2007 (S.1145).

Director Dudas characterized the bill (and legislative reform proposals in general) as creating “a false choice on innovation.” How can it be that some folks believe the bill will end innovation as we know it while others see it is downright necessary for innovation to continue?

Following the theme of the opposition letter, he noted that the section on damages is a deal breaker. The administration believes that the current language in the bill unnecessarily ties the hands of federal judges and fears that, over the long term, the language would inhibit innovation and might even encourage infringement.

Interestingly, Director Dudas, in discussing the damages provision, noted that “the overall goal of reform is to promote innovation across all business models and industries” and that the damages provision needs to respect that goal. In that light, he reiterated the administration’s position on damages reform: a flexible approach that gives federal judges the “ability and responsibility” to apply discretion based on the “facts, technology and business model” involved in a particular case.

He also shed light on the administration’s position on post grant review. It favors the two window approach, but wants bigger teeth in the bill in order to make the new system “a true alternative to litigation.” How? Include very strong estoppel measures, including an “anything raised or that could have been raised” standard for challenges brought in the second window.

Director Dudas had several other insights on patent reform legislation in general:

“Reform needs to be technology neutral.”

“First-to-file needs to be a ‘pure first-to-file‘ system.”

(He explained that a “pure first-to-file” system would not exclude inventor disclosures from the scope of prior art. This seemingly major point of disagreement with the language of S1145 is not explicitly mentioned in the letter of opposition, unless this veiled reference counts: “we would like to work with you to address technical issues regarding the scope and application of prior art and the grace period.”)

“We support the fee-setting authority provision. Some fees should be lowered, some raised, and, quite honestly, some should go away….”

…and offered his outlook on reform legislation:

“We think a balance can be struck on the damages issue.”

“several reform measures could stand on their own or together in a smaller reform package” (ala the focused v. comprehensive approach to reform)

“It varies from Senator to Senator. Some want it done now. Others are saying ‘let’s take the time to get this right, no matter how long it takes’.” (answering a question about the prospect for passage this year)

Jon Dudas held a Q&A with the media this morning to discuss the recently-issued Bush administration letter of opposition (.pdf) to the Senate version of The Patent Reform Act of 2007 (S.1145).

I was able to participate on the call and will post an analysis soon, but wanted to push this tidbit out quickly:

In his opening remarks, Jon Dudas noted that the allowance rate for the first quarter of the current fiscal year is “about 44%.”

And so the precipitous drop in the allowance rate that started in about 2000 continues….

Representative Marcy Kaptur (D-OH), an ardent opponent of comprehensive patent reform efforts, recently jumped on an opportunity to notify the administration about Microsoft’s “agressive posture” on the issue.

Kaptur, the most senior Democratic woman on the influential House Appropriations Committee, recently issued a letter to Attorney General Michael Mukasey urging the application of a ’strict scrutiny’ standard of review to Microsoft’s recently announced hostile bid for Yahoo! Inc.

Interestingly, the letter’s focus (and purpose?) seems to be more on patent reform than on the takeover bid.

To wit:

She characterized the bid as appearing “against the backdrop of [Microsoft's] current aggressive posture in Congress seeking to reform and diminish the effectiveness of our nation’s intellectual property protections.”

She specifically pointed to the company’s lobbying for the passage of two controversial reform efforts, apportionment of damages and the “second window” in a post grant review system:

“Microsoft is seeking to fundamentally transform the treatment for those entities that infringe on the intellectual property of other innovators by minimizing the damages the victim could receive and to ensure that the potential for harassment would extended (sic) dramatically by allowing for virtually endless attacks on patent validity.”

Download a .pdf of Representative Kaptur’s letter here.

Kaptur has made several spirited floor speeches against patent reform efforts over the years, including one that included a statement of disgust with the politics played by members of her own party in setting the ‘debate’ on H.R. 1907, The Patent Reform Act of 2007.

Representative Kaptur’s district includes my beloved Toledo, OH, but just misses my current hometown of Perrysburg, OH.