The largest stumbling block to substantial reform of U.S. patent law became quickly evident Tuesday before a panel of Senate lawmakers Tuesday: to what extent any reform should address the size of patent damages awarded.

A top lawyer at a large household-goods maker told a hearing of the Senate Judiciary Committee that the case hadn't been made for reform of royalty patent damages.

"As to reasonable, royalty patent damages, the 21st Century Coalition believes the case for remedial legislation has not been made," said Philip Johnson, chief intellectual property counsel at Johnson & Johnson (JNJ).

Johnson was referring to the 21st Century Coalition for Patent Reform, a group of traditional manufacturers and big pharmaceutical firms.

But the committee also heard from a patent law professor at Stanford University and an executive at a high-tech firm that the issue of damages awarded is among the most important areas requiring reform.

"There remains one significant judicially created problem with litigation abuse of the patent system that Congress should address: the problem of damages calculation in reasonable royalty cases," the professor, Mark Lemley, said in prepared opening remarks.

Last week, for the third consecutive session of Congress, lawmakers on the judiciary panel introduced a bill aimed at patent reform. Each time, despite significant progress, lawmakers haven't been able to reach a final agreement on the way forward.

Sen. Patrick Leahy, D-Vt., chairman of the panel, said it was essential that the bill is successful this year.

"We can't be in the 21st century with a 50-year-old [patent] system, and we will bring it up to date," Leahy said.

The top Republican on the panel, Sen. Arlen Specter, R-Penn., neatly summarized the opposing sides in the matter.

He said that it was primarily a dispute between high-tech and entertainment industries versus traditional manufacturing and pharmaceutical companies.

The former group is a strong advocate of substantial reform, and argued before the committee that their industries are being held back by a lack of change to the law.

Steven R. Appleton, chief executive and chairman of Micron Technology Inc. (MU), a semiconductor maker, told the panel that a study being published Tuesday found that reform could lead to 100,000 jobs in the high-tech industry over the next five years, while no reform to the patent laws could cost 150,000 jobs over the same period. The study was released by Dr. Everett Ehrlich, a former official in the Clinton administration.

Manufacturing and pharma companies, which rely heavily on the protection that patents provide, have advocated for far less substantive reform to the laws.

-By Corey Boles, Dow Jones Newswires; 202-862-6601; corey.boles@dowjones.com