Patent News

Aug. 17, 2014

The Wall Street Journal: Patent Overhaul Effort Stalls, by Ashby Jones

This article originally appeared in The Wall Street Journal on August 17, 2014.

The patent overhaul effort has expired.

Legal experts say the likelihood of the full Congress revisiting the issue before the election in November is slim.

In May, Sen. Patrick Leahy (D., Vt.), pulled the plug on a bill that was close to being sent to the full Senate, all but ending the best shot at passing a reform bill this session to help stem the flood of costly patent litigation facing American corporations.

The failure of that effort came after success in the House. Last December, the House overwhelmingly passed a bill that would have added new responsibilities on plaintiffs filing patent-infringement suits.

Among the additions: a provision requiring plaintiffs who lose their infringement lawsuits to pay the defendants’ litigation costs.

A more modest bill is still pending in a House committee, but reform proponents are mainly setting their sights on reviving efforts early next year, after the 114th Congress is installed.

“We’re looking down the road,” said Daniel Nazer, an attorney at the Electronic Frontier Foundation, which supports patent reform. “When the bill died in the Senate, pretty much everyone involved in the debate either gave up and looked to the next Congress, or breathed a big sigh of relief.”

The latest effort came after Congress passed a patent-reform law in 2011 called the America Invents Act, the largest overhaul of the patent laws in nearly 60 years. But the law didn’t squarely address so-called “patent trolls,” patent-holding firms that buy up patents and seek to make money from them through licensing and litigation.

Hundreds of companies, including technology giants Google Inc. and Microsoft Corp., pushed Congress to work to curb patent-holding firms, which, in their eyes, too often filed lawsuits based on software patents that never should have been issued. The lawsuits were, the companies said, costing them millions of dollars every year in settlements and legal fees.

The arguments took hold of the House, which last year passed a bill aimed at curbing frivolous lawsuits by a 325-91 vote.

The bill hit strong headwinds in the Senate, after new voices joined the debate. Big segments of the pharmaceutical and manufacturing sectors, industries that have long relied on a strong patent system, worried that the law could weaken their ability to protect their inventions. Research universities, which reap big returns through licensing their ideas, raised red flags. The plaintiffs’ bar objected to the “fee-shifting” provisions.

“A chorus of other interests came forward,” said David Kappos, the former head of the Patent and Trademark Office, now at Cravath, Swaine & Moore LLP in New York. “They essentially fleshed out a fuller story that hadn’t really been presented to the House.”

To read the full article please visit the Wall Street Journal site here.