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IP: Divided Congress May Create Perfect Storm for Patent Reform

The promise of Patent Reform reminds me a bit of Lucy's perennial football prank on Charlie Brown in the Peanuts comic strip. Every year Congress tees up a reform package designed to cure the ills of the Patent System, patent practitioners and business owners get excited about the first real reform of the patent system in decades and then, like Lucy, Congress yanks the ball away by closing its legislative session without taking action.

This past year was no different. In March, the Senate introduced the Patent Reform Act of 2010. The Act included a number of measures to provide clarity in the patent system and to curb patent litigation abuses. For example, the 2010 Act provided guidance on patent damages, raised the bar for finding willful infringement, discouraged forum shopping and eliminated false marking suits where the plaintiff could not show competitive damage. All in all, the 2010 Act was seen as pro business and a good first step towards much needed systemic change.

The Act also had broad support. In September 2010, a bipartisan group of 25 senators (14 Democrats, 10 Republicans and one Independent) sent a letter to Senate Majority Leader Harry Reid encouraging him to bring the Act to the Senate floor for consideration. In making their case, the bipartisan group promoted their view that a well functioning patent system would help stimulate the economy and create jobs. Unfortunately, with a majority in both houses and a Democrat in the White House, Senator Reid had bigger fish to fry. Reid's office issued a statement indicating that while Patent Reform was "an important issue, we have many items to consider before the end of the year and not much time to consider them."

Senator Reid's failure to take up Patent Reform while the Democrats had control of Congress is not without precedent. In fact, the Republicans failed to pass the Patent Reform Act of 2006 when they had control of both houses and President Bush sat in the Oval Office. If there is a lesson to be learned from these failures, it might be that Patent Reform is just not partisan enough to make it to the top of either party's agenda. If that's the case, the current divided Congress may create the perfect storm for action on Patent Reform.

The Democrats in the new Congress have pledged to work toward bipartisan cooperation to help the economy and create jobs. Both parties agree that Patent Reform meets these goals. The Republicans have also pledged bipartisan cooperation, but have promised to hold their position on hot button topics such as tax cuts, health care and new spending. Patent Reform implicates none of these issues. While most commentators dismiss the promises of bipartisanship and predict nothing but gridlock from the new Congress, Patent Reform would seem to be one issue where Democrats and Republicans can come together.

As luck would have it, the bipartisan group of senators who urged Majority Leader Reid to take up Patent Reform last September have largely survived the recent election. If they can be encouraged to renew their efforts, 2011 could finally be the year when Congress breaks the "Lucy-and-the-football" cycle and enacts Patent Reform.

Mark Scarsi is a partner in the Intellectual Property Group of Milbank, Tweed, Hadley & McCloy, LLP, resident in the Los Angeles office.

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