The Senate Judiciary Committee today is holding a hearing about a controversial - and fundamental - proposed change to the nation’s patent laws. And drugmakers are squaring off against big finance and high-tech companies that want new rules. The legislation, which is backed by Republican and Democratic leaders, would be the first major overhaul in 50 years and make patents harder to get and easier to challenge, The Wall Street Journal reports. It would also reduce penalties for violating them.

The proposed legislation reflects years of criticism from judges and businesses that the nation’s current system of protecting intellectual property is ill-suited to the modern economy, where new inventions crop up quickly and often involve the marriage of hundreds of potentially patentable technologies and ideas, the paper writes. Many large companies also complain that patent litigation is becoming increasingly common and judgments against patent infringers increasingly costly.

But drugmakers, along with manufacturers like Caterpillar and Dow Chemical, tell lawmakers the proposed measure goes too far. They say the legislation wouldn’t only weaken the value of patents, but would make challenges to them too easy to launch - and win.

“It’s almost everything an infringer could ever want,” says Phil Johnson, the chief patent attorney for Johnson & Johnson, who adds the legislation being pushed by the leadership of the influential Senate and the House judiciary committees would make “very sweeping changes,” and would be a “very substantial policy shift away from fostering innovation.”

As the Journal notes, drugmakers jealously guard their technology against challenges by Congress and the courts, arguing that their patents make up the bulk of their real assets, and that any weakening of patent protections would discourage expensive research into next-generation cures.

This spring, the US Supreme Court, in two important rulings, made it harder to get new patents and defend existing ones. In one decision, the justices sided with critics who contend innovation has been stifled by lower-court rulings that gave patent holders more power than Congress intended. The legislation now on Capitol Hill marks an effort to transform what have been piecemeal court rulings into a comprehensive set of changes.

The bill has already cleared an important hurdle, winning approval in May from the House Judiciary Subcommittee on Intellectual Property. The measure is expected to go to the full House Judiciary Committee later this month, and could be ready for floor action in July. Today’s hearing before the Senate Judiciary Committee is designed to set the stage for formal action in the chamber later this summer.

To watch the proceedings, click here and look for the Webcast box.

Source: The Wall Street Journal (subscription required)