Patent News

May. 21, 2014

Broadcasting & Cable: Leahy Pull Patent Reform Bill, by John Eggerton

This article originally appeared in Broadcasting & Cable on May 21, 2014.

Senate Judiciary Committee chairman Sen. Patrick Leahy (D-Vt.) has taken so-called patent troll legislation off the committee’s calendar, at least for now. The Computer and Communications Industry Association, whose member include major computer and telecom companies, called it a default victory for patent trolls at the expense of needed relief for businesses.

Leahy teamed with Sen. Mike Lee (R-Utah) to introduce the bill last November.

The House back in December passed its version of patent reform, the Innovation Act of 2013 (HR 3309), which was introduced by House Judiciary Committee chairman Bob Goodlatte (R-Va.), targeted at so-called patent trolls, and strongly supported by the National Cable & Telecommunications Association.

But Leahy Wednesday relayed the “repeated concerns” that the House bill would have “unintended consequences” on patent holders and their thousands of employees, and said there was no agreement on what should be in the Senate version, S. 1720, the Patent Transparency and Improvements Act. “[C]ompeting companies on both sides of this issue refused to come to agreement,” he said.

That House bill would require lawsuit plaintiffs to specify which patents are at issue and what products they allegedly infringe. It would also allow a court to require the loser in a patent case to pay the winner’s costs if the case was not reasonably justified. “We commend the members of both parties who voted for this pro-jobs, pro-economy bill.”

“Unfortunately, there has been no agreement on how to combat the scourge of patent trolls on our economy without burdening the companies and universities who rely on the patent system every day to protect their inventions,” he said in announcing that he was taking the patent bill off the committee’s agenda.

He did say that if agreement could be reached on a more targeted bill, he would bring it “immediately” to the committee.

“We can all agree that patent trolls abuse the current patent system,” he said. That includes the President, who signaled last fall he supported various measures to discourage the so-called trolls and referenced the issue in the State of the Union.

Charles Duan, director of the Patent Reform Project at Public Knowledge, called the move unfortunate that after more than a year of discussion and negotiation, the bill had been pulled from the docket.

“Although ‘companies on both sides of the issue’ could not come to agreement,” he said, echoing Leahy, “the real loser here is the American consumer. Patent abuse raises costs on consumer products, keeps innovators from bringing products to market, and blocks all individuals from fully accessing the wealth of technology. Without the bipartisan, White House-supported, widely agreed-upon reforms that were pending before the Senate, consumers will continue to pay a tax for an outmoded, misused patent system.”

The Computer and Communications Industry Association, which supported the House version, was not happy with the Senate impasse over reforms, particularly after the House was able to pass a bill.

“The removal of comprehensive patent litigation reform legislation from the Senate Judiciary Committee’s agenda makes this a day of celebration for patent trolls,” said Consumer Electronics Association President Gary Shapiro. “Unfortunately, it’s a sad day for American innovators, businesses and consumers. We are profoundly disappointed the Senate has abdicated its responsibility to address the skyrocketing costs of patent abuse.”

“We are greatly disappointed to see patent reform removed from the Senate’s agenda,” said CCIA president Ed Black (CCIA members include Google, eBay and Microsoft). “Patent trolls no doubt celebrated the lunchtime announcement that they could continue to misuse U.S. patent law to feast on U.S. companies in all sectors and sizes.”

“The Obama Administration has said patent trolls cost companies $89 billion a week. With the kind of money they’re raking in, can policymakers really expect to get patent trolls to agree to legislation that curbs the use of some of the tools they are using to unfairly file nuisance lawsuits to collect those kind of fees? Senate leaders are now saying legislation cannot proceed without agreement among all patent holders, including those trying to block it. This a sign the legislation might be effective – not a reason to stop trying to pass it.”

“Today American businesses learned relief is not on the way, and they are on their own against the trolls as they await an announcement that the trolls have comprised and will no longer block patent reform.”

“It’s clear to all those targeted by trolls they need a rescue effort led by statesmen and women in Congress – not yet another delay that blames stakeholders and hands patent trolls a default victory.”

An association of university associations, which says the bill was overburdensome, hailed the decision.

“The first rule of patent legislation should be to do no harm,” said Association of American Universities EVP John Vaughn. “We appreciate the efforts of Chairman Leahy and the entire Judiciary Committee to ensure that in addressing abusive behavior, we don’t undermine the system that all patent holders, including America’s inventors, entrepreneurs and universities rely upon to maintain and strengthen our country’s legacy as the global innovation leader.”

Eb Bright of the Alliance of U.S. Startups and Inventors for Jobs (USIJ) was applauding the reset.

“This legislation attempted to hunt for trolls, but ended up shooting at American inventors and job creators,” he said in a statement. “The legislative proposals being discussed either missed the abusive practices altogether or cast a far broader net than intended. We applaud the work of Chairman Leahy and the Committee and their wise decision to throw out the current proposals, slow down and reconsider how to thoughtfully deal with this important issue.”