Patent News

Apr. 30, 2015

Legal Newsline: Senators introduce PATENT Act; opponents claim it misses the mark, supporters call it ‘strong’ and ‘balanced’, by Jessica Karmasek

This post originally appeared in Legal Newsline on April 30, 2015.

WASHINGTON (Legal Newsline) – A bipartisan group of U.S. senators introduced their own legislation aimed at ending patent abuses Wednesday.

Sens. Chuck Grassley, R-Iowa and chairman of the Senate Judiciary Committee; Patrick Leahy, D-Vt. and ranking member of the judiciary committee; John Cornyn, R-Texas and committee member; and Chuck Schumer, D-N.Y. and also a committee member, all are sponsors of the PATENT, or Protecting American Talent and Entrepreneurship, Act.

Judiciary committee members Mike Lee, R-Utah; Orrin Hatch, R-Utah; and Amy Klobuchar, D-Minn. are cosponsors of the bill.

The senators argue their legislation — the fourth patent reform bill to be introduced this Congress — makes “necessary and commonsense” reforms to stop abusive patent litigation practices and prevent “bad actors” from further undermining the nation’s patent system.

The bill would clarify pleading standards; protect end users; reasonably limit early discovery; create more risk for bad actors; curb abusive demand letters; and increase transparency.

“Abusive patent litigation is a threat to our economy and costs consumers and businesses billions of dollars each year. Too often, small business owners are being targeted for doing nothing more than using off-the-shelf products. These types of frivolous lawsuits cost them millions of dollars and force them to settle despite having a strong defense,” Grassley said.

“The meaningful reforms in our bipartisan bill are needed to ensure that the innovation and entrepreneurship our patent system was designed to protect isn’t undermined.”

Schumer said so-called patent “trolls” are taking a system meant to drive innovation and instead using it to stifle job-creating businesses.

“Main Street stores, tech startups and more are being smothered by the abuse that is all too common in our patent system, and it’s time for that to end,” he said. “This bipartisan bill shifts the legal burden back onto those who would abuse the patent system in order to make a quick buck at the expense of businesses that are playing by the rules.

“I’m hopeful we can move quickly and in a bipartisan way to get this bill passed in committee and on the Senate floor this summer.”

Klobuchar noted the legislation will protect patent holders against trolls without impinging on the ability of good-faith actors to enforce their patent rights.

“Minnesota has one of the highest rates of patents per capita in the nation — we’ve invented everything from the Post-It Note to the pacemaker — and this bill will help our businesses and those across the country reap the reward of their innovations, while being protected from abusive lawsuits,” she said.

Not everyone is convinced.

Innovation Alliance Executive Director Brian Pomper said Wednesday that while the bill incorporates some “welcome improvements” over earlier versions, the group, made up of research and development-focused companies, must oppose its adoption as introduced.

“Passage of this act would cripple the ability of legitimate U.S. patent owners to protect their ideas from infringers, both in the United States and overseas,” he said.

“A strong patent system has been the engine of innovation in this country for over two centuries, and remains the fundamental driver of economic growth and job creation in this new technology-driven economy. U.S. competitive advantage depends on strong, enforceable patent rights that incentivize innovators to invent.

“A law that would make it harder to enforce U.S. patents will encourage the infringement of American ingenuity and innovation and embolden competitors in China and elsewhere.”

The American Conservative Union, one of the nation’s largest conservative groups, said lawmakers continue to be “way off the mark.”