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The U.S. House approved legislation today that seeks to overhaul and modernize over 55 years of patent law and address a patent-award system that bi-partisan groups have long argued is broken.

Years in the making and still considered a work in progress by its strongest proponents, the complex and controversial patent reform bill passed the House by a vote of 220 to 175. The information technology industry quickly applauded the House action, while opponents warned that it could harm small inventors.

The Patent Reform Act of 2007 (H.R. 1908), authored by Rep. Howard Berman, D-Calif., seeks to address problems that have bogged down the U.S. Patent and Trade Office, resulting in poor quality patents, abuses in patent litigation process, and a disconnect between patent law in the United States and the rest of the world.

The legislation creates an opportunity to review patents after they are granted, giving challengers an alternative to what often becomes expensive and drawn-out litigation. It allows third parties to submit information to the PTO while a patent is being examined to help prevent poor quality patents from being issued.

To bring the U.S. patent system into greater harmony with systems around the world, the bill moves to a system in which patents are granted to the first inventor to file an application rather than the first person to invent.

"The Act will inject needed clarity and certainty into the system," said Berman in a statement. "While cognizant of the enormity of the change that a 'first inventor to file' system may have on many small inventors and universities, a grace period is maintained to substantially reduce the negative impact to these inventors."

High tech, the major force behind the legislation, praised the measure.

"Today's bipartisan House vote represents six years of work dedicated to modernizing the U.S. patent system," said Rhett Dawson, president of the Information Technology Industry Council. "Information technology leads the innovation economy and ITI's membership includes seven of the top ten U.S. patent recipients of 2006, but there is widespread agreement the current patent system is broken.

Another provision in the legislation gives the PTO the authority to establish new patent-related rules. However, in an effort to calm fears about lawmakers losing control over patent law, the bill was amended on the floor to give Congress 60 days to review any PTO regulations before they take effect.

Acknowledging that the legislation is not perfect, sponsors vowed to continue working toward greater compromise when the legislation is reconciled with the Senate version in a conference committee. Working into the night yesterday, they crafted numerous revisions to the version that had been approved at the committee level in July.

"We were making changes to accommodate the minority side," said Rep. John Conyers, D-Mich., chairman of the Committee on the Judiciary. "Even now the [bill] is a piece of work that will not be concluded until we come out of conference."

Eleventh-hour changes, and support

Last-minute revisions include the bill's most controversial provision, dealing with how courts determine damages in patent infringement lawsuits. The legislation now allows for courts to apportion damages based on the component of a product that was infringed, but it also allows courts to calculate using a formula similar to that used today.

In a bid to address ongoing worries about the damages provision, the bill was amended to require the PTO to conduct a study of damage awards over the last 17 years.

The legislation received a much-needed boost earlier this week when the University of California lent its support. A last-minute change includes a concession to large research universities, allowing them to bring lawsuits in their own districts. Additionally, six consumer groups voiced their support this week, arguing that the bill will reduce the risk and cost of litigation for software and online services, which raise prices for consumers.

"The House acted this afternoon to strengthen the U.S. economy and to spur innovation by passing important patent reform legislation," said Gigi Sohn, president of Public Knowledge, one of the consumer groups following the legislation. "The bill will strengthen the patent process, making sure that patents that win approval will be stronger and better withstand challenges to their validity."

Opponents were not mollified. Rep. Dana Rohrabacher, R-Calif., argued that the bill will make easier for foreign competitors to take unfair advantage of U.S.-developed technologies.

"This so-called reform will make [individual inventors] vulnerable to foreign and domestic technological thieves," Rohrabacher said. "It is a horror story for American inventors and a windfall for foreign and domestic thieves."

Opponents also complained vehemently that they were not given enough time to review the bill before it came to the House floor and they were not given enough time on the floor to voice their opinions.

While the bill enjoys strong bipartisan sponsorship, the White House voiced dissatisfaction with it yesterday, and twice as many Republicans as Democrats voted against it in the final House vote.

The Senate is expected to take up its version of patent reform this fall.