U.S. Patent Reform Bill: An Interview with Mark Webbink

U.S. Patent Reform Bill: An Interview with Mark Webbink
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Patent Reform Legislation

Koman: So, can you give us a big picture of the legislation--what would it do and who's interested in seeing it pass?

Webbink: It's House Resolution 2795. It was advanced by Lamar Smith, the chair of the House Subcommittee on Intellectual Property, with support from both sides of the aisle. The original legislation, as introduced, incorporated a lot of the proposed changes that were recommended by reports from both the Federal Trade Commission and the National Academies of Science. They then started getting feedback on this from a lot of different industries. Chairman Smith set up an industry panel to see if the industries could reconcile their differences. They picked a representative from the pharmaceutical industry, one from biotech, one from tech transfer (basically academic institutions), and for software they picked the Business Software Alliance.

Reforming Patent Reform

There's still a chance that the patent reform bill can be made somewhat useful. Webbink said that Red Hat has made some recommendations that would help software without offending the pharmaceutical industry:

Denying injunctive relief to patent trolls ("nonproducing entities," to put it nicely). "If you're not really producing anything and you're out licensing your patents then you're primarily interested in a monetary remedy," Webbink explained. "Why should you be granted injunctive relief, which for the company that is producing is like the death penalty? All of a sudden, you can't ship your product anymore."
Fund the Patents and Trademarks Office to create a patent prior art repository.
Exempt gold masters from the rule that copies produced outside the U.S. are subject to the infringing claim. "In the Eolas v. Microsoft case, Microsoft claimed that because they shipped a gold master to their foreign replicator and then all the foreign copies were produced outside the U.S., the foreign copies should not be subject to the infringement claim, and the court held against them. That's not a problem just for Microsoft, that's a problem for any software company that ships gold masters outside the U.S. to produce copies. We're basically asking for gold masters to be exempted from that rule so the only thing you would be faced with in an infringement ruling would be copies actually produced in the U.S., whether consumed in the U.S. or shipped abroad."

Those four groups got together and after days of arguing basically got nowhere. Given the amount of money that Big Pharma pours into Congress, when they said they wouldn't accept certain things, those things were taken out. The bill has been revised: it has removed many of the features that would have favored not just open source software but software in general. Especially the so-called second opposition period.

The original bill provided two post-grant opposition periods; one to commence immediately upon grant and the second to commence immediately upon an assertion of infringement. They removed that second one. That effectively takes away from all the small and medium businesses the chance to challenge a patent at the time that it's asserted, but left in the provision of big businesses to sit there and oppose any patent that any single inventor advances. The big guys are the only ones who can afford to monitor what's being issued. And they took out some additional provisions around injunctive relief.

Basically, the bill is a shell of what it originally was. And it still includes this first-to-file provision.

Koman: OK. So this bill, which is essentially written by Big Pharma, is it still a good thing, from the perspective of Microsoft and Oracle?

Webbink: I think if you were to ask [Microsoft general counsel (GC)] Brad Smith and [Oracle GC] Dan Cooperman, they would say, "At best, it's an OK bill now, it's not a great bill. It doesn't help the software industry very much at all."

Koman: So there's not really a division between Big Software and open source software on this bill?

Webbink: No, no. It's a division between Big Pharma and the software industry. The software industry is just less well-organized and does less in the way of political contributions.

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