The Bush administration is opposing a key provision of the patent reform bill that has passed the House of Representatives and is awaiting a floor vote in the Senate, The San Francisco Chronicle reports.

The position puts the White House at odds with high-tech firms such as Intel, IBM, Apple, Google, Cisco and Hewlett-Packard that have banded together to push the bill, and squarely on the side of biotech and venture capitalists, which say the proposed change would significantly weaken patents, the paper reminds us.

In a six-page letter written on behalf of the US Patent and Trademark Office, the administration told senators that it disagrees with a provision that would change the way damages are calculated in cases when patent infringement is proven. That change “could promote infringement,” the administration warned, saying it would oppose the legislation unless the bill is changed to “protect the inventor,” according to the Chron.

At the heart of the current dispute is the fact that patents are somewhere at the high end of their historical value. As an example, the paper points to the widely publicized case in which Research In Motion paid $612.5 million in March to settle a patent dispute that had very nearly lead to a court-ordered injunction stopping sales of the BlackBerry device, which is popular on Capitol Hill.

The size of the settlement and the drama leading up to it lent credence to tech industry complaints about patents. “We have a system which is out of whack, out of balance,” says Tim Sheehy, a Capitol Hill lobbyist for IBM, which backs the current language on damages that the White House opposes.

Biotechs feel particularly threatened by proposed changes because their industry has grown up in the past 25 years when, largely thanks to court actions, patents have become more and more valuable. “If it comes down to a choice between a tilt toward the iPod or a tilt toward cancer cures, I think that’s a no-brainer,” Jim Greenwood, president of the BIO trade group, tells the paper.