US patent law to change drastically
30/10/2007

The US House of Representatives recently approved the first major overhaul of US patent law in more than 50 years. Patents will be harder to get, easier to challenge, and penalties for violating them will be reduced.

The most significant changes will include:

1. replacing the current “first to invent” US system with a “first to file” system used, for example, by South Africa;
2. making granted patents easier to challenge by introducing a three-judge tribunal with the hope of reducing the number of questionable patents and patent lawsuits;
   and
3. limiting damages for patent infringement to the narrow value of an infringed patent. This follows a $1.52 billion award for damages last year against Microsoft in favor of Alcatel-Lucent SA.

According to the Wall Street Journal, Microsoft Corp., Cisco and Goldman Sachs Group Inc. voiced their support of the new legislation, being of the opinion that it was needed to “restore some balance and fairness to the litigation landscape”.

In contrast, pharmaceutical companies like Eli Lilly & Co. and Pfizer Inc, along with manufacturers like Caterpillar Inc. believe that the new measures will have a detrimental effect on the value and protection of patents and that the changes would be a “very substantial policy shift away from fostering innovation”.