From the Alliance

Jun. 4, 2015

Broad Bipartisan Agreement in Senate: PATENT Act (S. 1137) Not Ready for Floor Consideration

Republican and Democratic Senate Judiciary Committee Members Voice Strong Opposition to Patent Legislation

Sen. Dick Durbin (D-IL)

  • “I guess we have to ask ourselves a basic question here. Major patent reform occurred in 1952. The next time this Committee considered major patent reform was 59 years later. In 2011. 59 years. And now 4 years later. We’re back. We’ve returned to this issue of patent reform very quickly after the first effort. Some might say that our first effort in the modern era, 2011, needed some attention and some work. But I think there’s more at stake here and there’s more at risk here.”
  • “I listened carefully to what this is all about. Patents. Innovation. American creativity. Jobs. And I understand that. I think we all do. I think that’s why this is enshrined in our Constitution. It’s one of the things that we believe in as a nation and we have tried to protect it, respect it since the founding of this republic. And the characterizations have been made here. I don’t want to say have been overblown but they’ve been somewhat hyperbolic.”
  • “I readily concede there are people who abuse the current system. There are ways of policing the system and making it better. But this bill goes too far.”
  • “Why would we want to make it harder on legitimate inventors . . . or legitimate businesses . . . to protect their patents? This bill will do exactly that.”
  • “Someone in Congress needs to look out for these people. These legitimate family owned companies. These inventors. The small businesses that protect their patents and have to raise capital to survive. This bill hits them very hard. They can’t absorb this bill’s new burdens.”
  • “There are things in this bill that crosses lines that I didn’t believe would be crossed in my time in Congress. That’s why groups like the National Venture Capital Association, the Independent Inventors of America, the U.S. Alliance for Startups and Inventors opposed the bill. Asian carp? Scum suckers? Tapeworms? I don’t think so.”
  • “Now I know the bill’s sponsors think they struck the right balance. We also thought we struck the right balance 4 years ago and that law created unintended consequences that are hurting innovators and need to be corrected still today.”
  • “I can tell you provisions in this bill before us today will make it virtually impossible to consider asserting your rights to patents and defending yourself as we have it written.”
  • “We are now breaching what I consider to be a terrible principle with the loser pays approach. This loser pays approach means that fundamentally the small guy doesn’t have a chance against the big guy and the big guys just love this bill.”
  • “In terms of stemming the abuses? There are lot of things we can and should do. Some of them are underway now. The judicial conference has already agreed to rules changes to heighten patent pleading standards and reduce excessive discovery. The recent Supreme Court decisions have already caused patent litigation rates to decrease. Fee shifting awards to increase.”
  • “The tide’s already turned. Let’s not overreach. We should adopt first do no harm approach when it comes to legitimate inventors . . . Let’s target the trolls. But let’s not put a bill on the Senate floor that would make things harder for the good guys.”

Sen. Ted Cruz (R-TX)

  • “We have in our economy I think a particular obligation to protect innovators. To protect the little guy who is inventing the next great invention that will transform the world that we don’t know what it is we don’t understand where it might be going and yet it represents a threat to the status quo. A threat to the giant corporations of today because they are in their garage starting the company that will become the giant corporation of tomorrow.”
  • “Before I was in the Senate I litigated cases on both sides of patent matters. Both on behalf of defendants and on behalf of plaintiffs asserting intellectual property. At the end of the day, at least in Committee, I’m going to vote against this legislation, but I think it’s a close call and I may well be open to supporting it ultimately on the floor depending upon what amendments are considered.”
  • “I think we need to be particularly solicitous of protecting inventors, protecting the little guy, protecting those who are asserting their rights protected by the United States Constitution to develop new innovations, and I fear that if we lean too far against the small patent holder that in turn will hamper innovation in our economy.”

Sen. David Vitter (R-LA)

  • “[A]s a conservative I have long had strong concerns throughout the legal system and the economy about litigation abuse. I’ve been a proponent consistently for tort reform. But notwithstanding that, I have real concerns about this bill and will oppose it in Committee and beyond if it stays in its current form because from a conservative point of view I do not think it strikes the right balance.”
  • “[O]ur founders correctly recognize, and it’s pretty unique in the world to the extent we do, but they correctly recognized a patent as a core important fundamental property right. And they felt so strongly about that they put it in the Constitution. I think some aspects of this bill really weaken that property right and make it difficult for smaller entities in particular to protect that fundamental property right which may be the entirety of what their business is about.”
  • “[A]s a conservative, I’m always suspect quite frankly of big comprehensive bills versus a much more targeted approach whether we are talking about healthcare of anything else. I think this falls into that big comprehensive bill category and I think they’re going to be all sorts of unintended consequences, at least unintended by members, maybe not by many of the interests involved.”
  • “There are abuses in this space. Why don’t we go after those abuses in a far more targeted way in terms of demand letters and true patent trolls, etc. I think that would be far more effective.”
  • “[O]ur patent system is pretty unique in the world and I like it that way. I think we get it right compared to Europe and other places. I think we’re merging into those other sorts of systems, moving toward them in a way that is not positive. That the founders never intended.”

Sen. Chris Coons (D-DE)

  • “[W]hat makes a patent worthwhile is if you can successfully defend it against infringers whether domestic or foreign and whether in the early stages of a startup company as you try to scale and develop and deploy and market your invention whether you can attract and retain the investors who make it possible to grow that invention.”
  • “[M]y core concern is that much of the negotiations have occurred between exactly those interests that are best represented and that most represent stable, mature and dominant industries in different sectors and the voices from which we have heard the least are those who are most important both in the history of patents and in the history of innovation in this country.”
  • “There’s a lot of statements decrying trolling behavior but this bill still does not make a specific enough definition of what is a patent troll.”
  • “I too have heard from very small companies from those who are in the commercial field who are very concerned about demand letters and baseless cases and patent trolls. But in the eyes of this bill, every inventor, every startup, and every small business that relies on patent protection so they can invest and grow jobs and defend their legitimate invention against foreign or domestic infringers is also considered a troll. There is no clear line.”
  • “I am disappointed that this bill doesn’t make that distinction. We can pretend otherwise and avoid listening to the legitimate voices of real, small inventors and those who invest in them but we will miss the most important voice in the whole discussion about invention and innovation because it is exactly those inventors who come forward with disruptive inventions. . . . And it’s exactly those inventors who are most at risk of being closed out of market place by the big and established players and it is those inventors who were most intended to be protected by the framers of our Constitution.”
  • “[The National Venture Capital Association] say the unintended consequences that will result from provisions in this bill will make it harder to invest in patent reliant startups. We have no choice but to oppose the bill in its current form and hope that improvements can be made as work through the legislative process.”
  • “Whether we listen to Dr. Fogarty, the inventor of the balloon catheter cited by Senator Durbin, or we listen to the investors who would help grow a small startup company, or we listen to the professional practitioners who are the very center of patent litigation on all different places along the spectrum, there are many voices saying this bill is not done. It is still controversial. It is not yet baked. There are still likely unintended harms caused by this bill.”
  • “This is largely a story about unintended consequences. Many of the sponsors have referenced the fact that just a few years ago broad and comprehensive reforms to our intellectual property system spawned a new process and that has raised new questions and issues. We should first be concerned about the likely unintended consequences of complex and controversial legislation such as this.”
  • “This Congress should not be choosing sides between powerful interests that rely on intellectual property without a thorough and searching examination of its likely impact on the entire system of innovation in this country.”
  • “Why would we legislate in haste in a way that might take away hope from a family with a loved one struggling with Alzheimer’s, living with Muscular Dystrophy, concerned about Sickle Cell Anemia, wondering when or how a device or treatment or pharmaceutical might be invented and developed that would help them relieve their suffering. Why would we focus solely on one segment and ignore a whole other?”
  • “In my view, the narrow and targeted bill that the Chairman of the Small Business Committee Senator Vitter and I have introduced, the STRONG Patents Act, is a way to target our actions against exactly the patent trolls that other Senators have spoken about without broader unintended negative consequences to every legitimate inventor, investor and patent holder in our entire system.”
  • “[I]t is my hope that we will . . . not move this bill for floor consideration until the different and competing issues that have been raised by sponsors and members of this Committee alike have actually been seriously and thoroughly discussed and resolved.”

Bill Sponsors Agree on Need for Further Improvements Before Reaching Senate Floor

Chairman Chuck Grassley (R-IA)

  • “. . . [A]s this bill moves to the floor, there remain a few issues that need to be resolved.”
  • “[T]he language that we included in the managers’ amendment . . . that deals with amending claims in the PTO proceedings that that is a placeholder because it remains the subject of good faith negotiations. This has been a difficult nut to crack . . . [u]nfortunately we weren’t able to reach agreement before today’s session . . . .”
  • [Referring application of post-grant proceedings to Hatch-Waxman cases]. “It’s imperative for us to hear from all sides, get additional information and data, and of course to consult with the authorizing HELP Committee[.]”

Ranking Member Patrick Leahy (D-VT)

  • “There are further [issues to] address. One is the further issues that we are going to need to address was the question of amending patent claims in the context with PTO proceedings.”
  • [Referring application of post-grant proceedings to Hatch-Waxman cases]. “I agree with the Chairman that we’ll get input from all sides including the HELP Committee.”

Sen. John Cornyn (R-TX)

  • “[O]ur work isn’t done . . . The language of the bill that addresses amendments and IPR for instance remains under good faith negotiation by both sides. And to me that’s what’s characterized this legislation is good faith negotiations. . . I’m encouraged by those efforts and committed to finding a proposal that works.”
  • [Referring application of post-grant proceedings to Hatch-Waxman cases]. “When we passed the American Invents Act no one anticipated that IPR would impact that process in the way that it has. . . And it’s important we preserve incentives both for generics to come to market and encourage future investments in developing new treatments for patients. This is a serious issue. And we need to give it the consideration it deserves. But we can’t do that today. But we will and are committed to continuing to do that through the rest of this process.”

Sen. Chuck Schumer (D-NY)

  • “I did want to make clear that our work here is not done on the IPR package. We’ll need some more negotiations before we bring a bill the floor. The IPR package will get further refinement.”
  • [Referring application of post-grant proceedings to Hatch-Waxman cases.] “I see a strong justification for working to preserve the incentive structure as it has existed for decades. That said we are not able to make this change today. It requires more discussion with the stakeholders off the judiciary committee especially the other committee of relevant jurisdiction the [HELP] Committee. But I want to let the people know . . . I am committed to pursuing this issue and to find a way to address the problem as the bill moves to the floor just as I am on the issue of the claims amendments in IPR.”

Sen. Orrin Hatch (R-UT)

  • “We made a great deal of progress and I believe we’re heading in the right direction but outstanding issues remain. We must make the required adjustments to resolve these issues before this legislation makes its way to the Senate floor.”
  • “Among these issues is the way some actors are using the USPTO’s inter partes review process to undermine the legal framework for Hatch-Waxman and Biosimilar litigation.”

Sen. Amy Klobuchar (D-MN)

  • “I don’t think it’s a bad thing that we’re still open to discussion on amendments and changes to this bill. I think it shows how difficult this has been.”
  • [Referring application of post-grant proceedings to Hatch-Waxman cases]. “I am willing to examine those concerns and work with those companies as we move forward.”
  • “I think this bill is not an end but a beginning . . . .”
  • I see the horror of these patent trolls but I also see the importance of supporting our patent holders and the patent system . . . I am very proud to support this bill and to move forward as we continue to work it out.”

Republican and Democratic Senate Judiciary Committee Members Who Voted To Move the Bill Out of Committee Say It Needs Further Changes

Sen. Sheldon Whitehouse (D-RI)

  • “While I’m not completely happy with the bill at this stage I think we’re close enough that it deserves to go forward through the process.”
  • “We are very good at protecting the interest of big. We are not very good of protecting the interest of small.”
  • “I worry that there are some unintended consequences here from our point of view that may very well be intended consequences from the point of view of some of the special interests who are pushing on us and it’s our job to look at those forces and draw reasonable lines and not allow what are perhaps their intended consequences but our unintended consequences to effect the innovation environment that has been our country’s hallmark.”
  • “I would urge that all of us follow the old famous injunction of Benjamin Franklin that we all doubt a little bit of our in infallibility even when that judgment is bipartisan. Even when that judgment reflects considerable compromise and we keep minds open to improving this bill as it goes through the Committee and as it goes through the floor.”

Sen. Al Franken (D-MN)

  • “I really respect the people have patents. . . . They are really brilliant people and so I think it’s very important to protect their patents.”
  • “I do think this isn’t the end of this bill.”
  • “Senators Blumenthal and Whitehouse and I have tried to move this forward in a way to protect the interest of patent holders and their ability to enforce their rights.”
  • “I understand and appreciate this legislation that targets bad actors but I also believe in preserving our innovation economy as well as people’s access to judicial system and I remain confident that we can arrive something that keeps those goals in mind at all times.”

Sen. David Perdue (R-GA)

  • “I think it’s actually very healthy that we still have major disagreements about this bill at this eleventh hour.”
  • “I am also encouraged that it [major disagreement about this bill] is not divided on partisan lines.”
  • “I believe that this particular bill right now still has some major problems.”
  • “I think we have to make sure that whatever we end up with does not put at disadvantage the small competitor. The resources of a large corporation is not to be ignored when it comes to the litigation imbalances that we have currently.”

Sen. Richard Blumenthal (D-CT)

  • “Any time we close our court house doors even partially we imperil that lifeblood of democracy and therefore I’ve approached this bill with a lot of reservations, ambivalence and skepticism.”
  • “I think we need to be careful about placing hurdles or obstacles in the way of litigants who seek to make a claim and I have worked in particular to make sure that the fee shifting provision avoids any presumption in favor of the loser in litigation bearing the cost of litigation.”
  • “A lot of these demand letters could be stopped if certain of our federal and state agencies were more vigorous in enforcing existing law so again we need to be careful what we do here for unintended consequences that may result and we need to make sure that whatever we do here is enforced skillfully and wisely.”

Sen. Thom Tillis (R-NC)

  • “[T]here are . . . areas that I just want to note that I hope we make progress on before we get it to the floor.”
  • [On IPR] “I’ve got to believe that we can come up with a way to do that to get all stakeholders on board but address what I think are some legitimate concerns among pharma and biologics and I hope we make progress because otherwise I would have difficulties supporting the bill on the floor but I’m optimistic that we will.”