Washington, D.C. – In testimony today before the House Judiciary Committee today, Bernard J.  Cassidy, Senior Vice President & General Counsel at Tessera, Inc. – an Innovation Alliance member – expressed deep concerns about several provisions of H.R. 1260, “The Patent Reform Act of 2009,” that would weaken patent protections, stifle innovation, and cost American jobs.

“A strong and predictable patent system fosters the collaborative development and funding required to transform basic research into commercially viable technologies and stable, high-paying jobs,” Cassidy stated.  “It is troubling to many small technology companies that, at a time of such grave economic uncertainty, Congress would seek to fundamentally alter the economic structure of our nation’s patent system.”

In his testimony, Cassidy discussed the impact recent court decisions have had on the rights of patent holders, stating:  “When the patent legislation of today was first being discussed in 2005, advocates for far-reaching changes to patent law argued that the patent system was out of balance, with lax standards that yielded weak or overly broad patents and harsh remedies that gave so-called patent speculators too much bargaining power.  Since that time, a series of U.S. Supreme Court and Federal Circuit decisions have unquestionably changed major areas of the law and shifted the balance of power between patent holders and users, tightening standards of patentability and narrowing patent rights and remedies.”

Despite the impact that ongoing judicial reform is having on the patent system, H.R. 1260 attempts further sweeping changes that are of concern for Innovation Alliance and its members, including:

Post-Grant Opposition: H.R. 1260 provisions for expanded post-grant review and inter partes reexamination of U.S. patents will allow repeated frivolous challenges, resulting in increased costs to patent holders, decreased certainty regarding validity and enforceability of patents, and lower-value patents for U.S. businesses and patent holders.  This will undermine legitimate patent rights, threaten the jobs that depend upon them, and discourage investment in new technologies.

Damages for Infringement: The apportionment of damages provisions in the House bill would reduce the value of patents, inviting infringement by users of the patented technologies, including from companies in China, India and other countries.  After careful consideration of the harm that could result if apportionment of damages was enacted, the Senate Judiciary Committee has chosen not to include these provisions in its version of The Patent Reform Act of 2009, opting, rather, for a more reasonable approach that empowers judges to exercise a “gatekeeper” function in order to determine which of the many factors available under the law are appropriate for a jury to consider in calculating damages.  

“In a world where innovation and IP are more important and valuable than ever, Congress should champion America’s small innovators, and vigorously challenge the premises of any legislation that would diminish the value of the patents that help reward that innovation,” Cassidy concluded.

For a copy of Mr. Cassidy’s full testimony, visit www.innovationalliance.org.