May 11, 2006 1:22 PM PDT

Tech firms to lobby for patent litigation reform

Leading technology companies are forming a coalition in Washington to lobby for patent litigation reform.

The group, tentatively named the Coalition for Patent Fairness, will focus on reforms in patent litigation, rather than patent filing.

Coalition members include Intel, Cisco Systems and Hewlett-Packard. The coalition is also talking to industry leaders from financial services, manufacturing, energy, automotive and retail, said coalition president Doug Comer, who is also Intel's director of legal affairs and technology policy.

"We have all been working on these issues separately, and in the course of that work, we've found a lot of members that share our concerns," Comer said.

One of those concerns involves so-called patent trolls--companies that exist primarily to make money from patent litigation and are using the system to force lucrative settlements.

Many of these companies file patent-infringement suits to gain injunctive relief that can force settlement offers. Injunctive relief grants a hold on product shipments related to the patent. The procedure originally was intended to protect legitimate plaintiffs from losing market share while a patent is in dispute.

The recent NTP-Research in Motion case drew much attention to the issue, particularly when the patent lawsuit threatened the shutdown of RIM's BlackBerry service. RIM eventually agreed to pay $612.5 million to settle the suit.

"We are concerned about what we see as the growing imbalance in the application of patent law heavily in favor of plaintiff-as-patent-holder at the expense of patent holders more focused on developing, producing and marketing," Comer said. "Generally, we are interested in improving the way remedies are applied, the way damages are assessed in the courts, and the function in the courts."

While no formal list of policy goals has been released, the coalition plans to make a public announcement within the next few weeks that will include formal a list of members. The group will focus on reforming the standards for injunctive relief, standards for royalty and damages awards, and choice of venue.

Choice of venue is a concern because patent law falls under federal jurisdiction, so cases can be filed anywhere a patent has been infringed. Defendants complain that this broad interpretation allows plaintiffs to seek out sympathetic judges and file in those federal courts.

Washington has been abuzz with discussions of how to combat patent trolling without hurting the small inventor.

"The primary focus of this coalition is the litigation abuses that have evolved in the patent system," said Comer. "There are cases in front of courts that are inadequately equipped to deal with the complex questions surrounding the technology of some patent litigation. We are interested in improving the quality of the courts the cases are in front of."

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