Supporters Laud House OK of Patent Reform Act of 2007. Opponents Warn It May Weaken US Patent System.

Out of control patent litigation.

An overburdened US Patent and Trademark Office.

Complaints about poor quality and invalid patents issued by the U.S. PTO.

These are just some of the issues that have prompted Congress to come up with a bipartisan bill that promises real reform on this complex and obscure legal area. Designed to address patent quality, stop "patent trolls" (companies whose sole asset is an often questionable patent portfolio) from suing SMEs to seek revenue, and provide a no-costly-litigation means to challenge patent validity, the Patent Reform Act of 2007 has just passed the House and now moves on to the Senate. You'd think the debate was over. Hardly.

The legislation contains extensive changes that would change how patents are obtained and enforced and it has pitted some industries against others.

When the bill was just gestating, advocates on both sides of the issue had unleashed big-time lobbyists, formed coalitions, and spent fortunes to make sure the outcome went their way. In one corner, high-tech companies (on the receiving end of a lot of costly patent litigation) and some financial services firms clamored for damages to be proportionate to the value of the component in question rather than the entire product. They also demanded that "willful" treble damages assessed "only where there is truly egregious conduct," that companies not be held liable in U.S. courts for acts of infringement that occurred in other countries, and that patent disputes be resolved in "courts that have a reasonable connection to the underlying claim" rather than in places like the Eastern District of Texas, a plaintiff favorite.

In the opposite corner are pharmaceutical, biotech and traditional technology firms like 3M and GE who wanted strong patent protection for their highly profitable products. For the most part, they'd like to maintain the status quo because, according to Hans Sauer, associate general counsel for intellectual property for BIO, the biotech industry group, "The relative value per patent is much higher in the pharmaceutical and biotech industries than in the financial and IT sectors." A study by the Tufts Center for the Study of Drug Development also revealed that it costs a bundle (an average of $1.2 billion) to develop new biotech products.

Small inventors, patent trolls and well-funded IP investment funds such as Intellectual Ventures (which has thousands of patents across a broad range of industries, from high tech to biotech) also oppose most of the proposed reforms, saying patent holders have to each a point where they can be sure they have rights.

And here lies a major bone of contention. While some aspects of the reform have received broad support – such as switching the US to a first-to-file (rather than first-to-invent) patent system followed by most foreign countries, making the process less costly, complex and unpredictable – other aspects continue to generate controversy.

Providing post-grant review proceeding is one such example. According to Harold Wegner, a Foley & Lardner partner and professor at George Washington University Law School, such a review is a major tool for eliminating bad patents and that "… a system of prompt, post-grant review with an appropriate 'second window' is the central, core patent reform that is needed as soon as possible." But for drug companies, such a system can invalidate a patent at any time. And the creation of an open-ended "second window" means a patent can be challenged at any time in its life, can be challenged repeatedly, and can be subject to review without the limitations of the current reexamination system.

The House passage of the Patent Reform Act of 2007, with its focus on minimizing patent litigation by making it harder to claim intellectual property infringement and taking away the plaintiffs' potential rewards, is definitely a win for the tech industry and has prompted an industry group that included Intel, Apple and Microsoft to praise the House passage of the bill as a "victory for American innovators and consumers."

On the other hand, General Patent Corporation Chairman Alexander Poltorak, a national expert on the US patent system and author of two books on Intellectual Property (IP), condemned the House of Representatives’ passage of the patent reform legislation, bemoaned it as a "severe threat to our entire patent system,” a bill that “means weaker protection for universities, small inventors and entrepreneurs across America,” "undercuts domestic industry and hurts independent inventors,” and "renders patents nearly worthless, which will consequently weaken the incentive to innovate.”

So while high-tech industry giants are celebrating, the bill's opponents refuse to concede the war and have pledged to raise their voices even higher to prevent Senate approval of what they call a "flawed legislation."