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Patent reform measure ignited fierce lobbying effort

By Amanda Becker,

The Senate's recent passage of the America Invents Act has been hailed as the first meaningful overhaul of the country's patent process in more than 50 years. It is also the culmination of a long-running advocacy campaign that has sent at least 100 lobbying shops to Capitol Hill to represent at least 267 organizations in the last year alone.

The bill, which the Senate passed 99 to 5 on March 8, still faces scrutiny in the House -- where it is scheduled for a hearing before the Judiciary Committee on March 30. President Obama praised the effort as a long-overdue move that will eliminate a backlog of more than 720,000 pending patents. He indicated he will sign the existing bill into law if it reaches his desk.

The proposed changes give the U.S. Patent and Trade Office the ability to set its own fees, manage its own revenue, establish an expedited patent-review system and expand the ways in which a patent can be challenged. But no provision generated more interest among the organizations that weighed in than the switch from a first-to-invent to a first-to-file system used in most other countries, which would grant a patent to the first inventor to file an application even if others conceived of a similar idea first.

The shift was a victory for big companies such as Johnson & Johnson, Eli Lilly and General Electric, which are adept at filing patents often and early and hope the new system will help keep disputes over patent ownership out of court. The Coalition for 21st Century Patent Reform spearheaded their campaign, doling out more than $1.4 million to the lobbying firms Akin Gump Strauss Hauer & Feld and the Palmetto Group last year on behalf of these corporations and dozens of others that included BP, Dow Chemical, Motorola, PepsiCo and Procter & Gamble. At times, coalition members hired their own lobbyists to work on the issue, with Eli Lilly bringing on Heather Podesta and the Nickles Group, and Novartis retaining the shop of former Clinton White House staffer Steven Ricchetti.

The coalition's work paid off. The group lauded the near-unanimous passage of the Senate's bill, which contained many of its recommendations and none of the proposals it deemed unacceptable, as an indication they'd hit a “sweet spot” or “balance point” reflected in the bill, said spokesman Bill Mashek.

Smaller start-ups and entrepreneurs -- and the organizations that represent them -- lobbied fiercely on the idea that the first-to-file system favors powerful corporate players, but they weren't as successful in convincing lawmakers that obtaining a patent would now become a race to beat innovators to the patent office. The National Small Business Association was among the bill's opponents, arguing that structuring the patent system in this way would be “strongly titled in favor of large incumbent corporations” that have teams of patent lawyers at the ready. The organization spent $250,000 lobbying on the American Invents Act and other issues over the past year, gaining the support of Sen. Barbara Boxer (D-Calif.), one of the five senatorial naysayers who agreed “this legislation could hurt start-ups, entrepreneurs and inventors -- whose success is crucial to job creation in California and nationwide.”

Somewhere in the middle was a group of young-but-already-large tech companies, which turned to the Coalition for Patent Fairness to advance their goals. That coalition, which includes members such as Apple, Dell, eBay, Google, Oracle and Yahoo, spent more than $2 million last year on lobbyists from Elmendorf Ryan; Fierce, Isakowitz & Blalock; the Franklin Square Group; Mayer Brown; and Patton Boggs. These companies often turned to their own lobbyists for additional work as well, with BlackBerry-maker Research in Motion employing the services of Clark Lytle & Geduldig; the Franklin Square Group; Mehlman Vogel Castagnetti; the Walter Group; Vinson Elkins; Jones, Walker, Waechter, Poitevent, Carrère & Denègre on patent reform and other issues.

Though this group of younger industry giants did not object to the move to a first-to-file system, it said it was concerned about certain provisions in the Senate's bill and could not support its implementation at this time. The group says changes to the patent dispute process would “increase the time and money spent on lawsuits that could be spent on the development of new technology” at the expense of its member companies, said spokesman Amos Snead.

Some companies have indicated they won't consider the effort done until Obama signs on the dotted line -- at least three have hired patent-reform lobbyists since the Senate's vote.

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