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Will the U.S. patent bill regain its momentum?

By Diane Bartz

WASHINGTON (Reuters) - After flying through the U.S. House of Representatives and winning the support of an influential senator, closely watched legislation aimed at reducing frivolous patent litigation appears to have stalled, at least for now.

Since at least early April, Democratic Senator Patrick Leahy, chairman of the Judiciary Committee, has been crafting an amendment aimed at reining in "patent assertion entities," or PAEs, companies that critics say use weak patents to file unwarranted infringement lawsuits.

The Senate measure, sponsored by Leahy and Republican Mike Lee, is similar to legislation passed overwhelmingly by the House on December 5. The White House has asked for legislation to combat patent trolls, as the PAEs are sometimes called.

Leahy's legislation, introduced last November, has bogged down over two provisions that would affect how infringement lawsuits are written and when document demands, or discovery, would begin.

"It's somewhere between sinking like a rock and air going out of it, like a balloon," said one patent expert following the negotiations.

That does not mean the bill is dead.

Leahy and his staff have been working on four major changes to the legislation they plan to put in a "manager's amendment." The plan is for the changes to be added to the bill at the same time as it is voted on by the committee.

"I am continuing work with other members of the committee to address constructive comments from both sides about the patent legislation on our agenda," Leahy said recently.

The reform effort has strong support from big technology companies such as Google Inc and Cisco Systems Inc, as well as retailers that have been surprised to find themselves accused of infringement for such practices as using off-the-shelf routers to provide Wi-Fi to customers.

Two of the four changes on which Leahy is focusing have been largely worked out, lobbyists said.

One would make it easier for the winner of patent infringement litigation to demand the loser pay its legal bills. A second would allow manufacturers to step in if their customers are accused of infringement.

The other two, more troublesome, measures would change how infringement cases are litigated.

One would require that complaints detail how a patent is infringed. A second would require that most document demands be delayed until after a preliminary hearing on what the patents do, called a Mark man hearing.

Some industry groups, including the Biotechnology Industry Association, which represents pharmaceutical companies, are skeptical of those provisions because they would slow litigation. Drug companies often file patent infringement lawsuits against their generic rivals.

(Reporting by Diane Bartz; Editing by Peter Cooney and Steve Orlofsky)

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