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ATLANTA � Changes in patent rules � in the courts, in Congress and in federal regulations � have forced general counsel to take sides against each other and caused some outside attorneys to sound an alarm. “A number of remarkable events have occurred in the intellectual property world just this year that have the potential to change the landscape,” said John Harris, a patent attorney and partner in the technology/intellectual property group of Morris, Manning & Martin. “It’s scary to me because I represent clients on both sides. The U.S. has the best patent system in the world. What I’m afraid of is that they are about to throw the baby out with the bathwater.” The U.S. Supreme Court ruled on three major patent cases this year with the effect of making it more difficult to get patents. The U.S. House of Representatives passed a set of much stricter rules for patents now under consideration in the Senate. And the U.S. Patent and Trademark Office has proposed a new set of rules that opponents say would dramatically limit the ability of companies to create new products and protect them under the law. The patent office rules were set to take effect Nov. 1, until they were temporarily blocked by a suit from GlaxoSmithKline, a British drug maker, and smaller companies claiming the new rules would cause irreparable harm to their business. Leading Glaxo’s fight is its patent counsel, Sherry Knowles, who was hired from King & Spalding’s biotechnology and pharmaceutical IP practice. Before graduating with honors from the University of Georgia School of Law, Knowles was a pharmaceutical synthetic chemist with SmithKline Beecham, now GlaxoSmithKline. Knowles could not be reached because she was traveling on business in China this week, said a Glaxo spokesperson. The new rules have had the remarkable effect of teaming giants like Glaxo with smaller, more entrepreneurial companies � all of whom depend upon patents to protect their investments on research and development. In the other corner are technology giants and financial services companies. One of the leading proponents of the changes is Mark Chandler, general counsel of Cisco Systems Inc. Cisco owns Scientific Atlanta, which designs and sells the technology that makes cable television work and is known as the granddaddy of high tech in the Southeast. Chandler was in Washington last week working in support of the legislation currently in the Senate, said Michael Veysey, Scientific Atlanta’s general counsel. Chandler also dropped in on Scientific Atlanta on Friday before he went back to the West Coast. “Patent reform is a No. 1 priority for Cisco,” said Veysey. The main concern of the reform movement seems to be curbing the increasingly lucrative business of patent holding companies � also known negatively as patent trolls � which buy or file patents without ever manufacturing products and then sue those that use the patented technology to market new products. “Patent infringement litigation in the last two years has proliferated,” said Veysey. “Patent trolls are the principal threat. These are patent holding companies that do not have a business other than an IP portfolio. The way the laws are set up today, plaintiffs can go into any one of the federal district courts and file a patent infringement action. It’s a legal game that costs millions and distracts everyone from the whole purpose of the patent, which is innovation.” The success of the reform movement in the Senate at the moment is in question as the session draws to a close. But the issue will not go away, even if it has to start over with the new year, said Veysey. “The proposed legislation is strongly supported by other technology companies and the financial services industry. My understanding is the pharmaceutical and biotech industries have some concerns. What Mark has told everyone is the technology companies are prepared to discuss how to make these bills less objectionable.” The one point all parties seem to agree on is that patent reforms are needed. The debate is about what changes to make. “There are definitely issues that need to be fixed, the problem is that the fixes are going too far,” said Jack Todd, also an IP partner at Morris Manning. “That’s of concern because even the companies that want the fixes and need the fixes would not be happy if they got into place. It seems to be going from one extreme to the other.” Harris and Todd say the issues are more important than many corporate counsel realize. “The new rules are radical. The new legislation is radical. They will cause fewer patents to be issued. Some people think that’s good, but not necessarily. We want better quality patents, but not just an arbitrary limit,” Harris said. “If we’re about to go into a recession and all of a sudden you kill innovation in the country, we might not have a recession. We might have a depression.” Patent attorneys seem to be even more alarmed about the new rules under consideration by the U.S. Patent and Trademark Office than they are about legislation before Congress. They say the patent office seems to be trying to clear up years of backlogged patent applications simply by arbitrarily limiting the number of requests a company can make. “It’s an arbitrary limit that makes no sense,” said Harris. “It’s like saying we can’t make car tags fast enough so you can only have two cars in your family.” Others seem to agree. “It’s pretty clear that what they are doing is trying to discourage people from filing patents,” said Ann Fort, a patent attorney with Sutherland Asbill & Brennan. “I think the patent office was hoping a lot of people would just say nevermind and drop it.” Katheryn Hayes Tucker is a reporter with the Fulton County Daily Report, a Recorder affiliate based in Atlanta.

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