Patent News

Jul. 23, 2014

Washington Examiner via Legal Newsline: Law professor: Federal patent reform ‘certainly’ not going away, by Jessica Karmasek

This article originally appeared in the Washington Examiner on July 23, 2014.

WASHINGTON (Legal Newsline) – Though one federal bill aimed at combating so-called “patent trolls” failed to make it out of a U.S. Senate committee in May, one legal expert says patent reform is nowhere near dead.

Adam Mossoff, a law professor at George Mason University and senior scholar at the university’s Center for Protection of Intellectual Property, said in an interview last week that the push for revisions to the patent system is not going away anytime soon.

“There are too many stakeholders that have lobbied to make this happen,” he said Thursday.

But it’s unlikely anything will be done this year, Mossoff said — mainly because of the November election.

“It’s officially dead for this Congress,” he said. “But it’s certainly coming back next year. I’m not sure if it will be in the same form, or in a modified form.”

Mossoff said he believes the only piece of federal legislation that has the slightest chance of passing this Congress is the recently-introduced TROL Act.

A draft of the Targeting Rogue and Opaque Letters Act was approved by the House Subcommittee on Commerce, Manufacturing and Trade earlier this month.

The proposed legislation offers what some are calling a “balanced solution” to the demand letter problem — the crux of the current patent reform debate.

Such letters are often sent by patent trolls in an attempt to enforce or assert rights in connection with a patent or a pending patent.

Patent trolls, or the “bad actors” in this case, are those patent assertion entities or non-practicing entities that purchase groups of patents without an intent to market or develop a product and then target other businesses with lawsuits.

The TROL Act aims to protect businesses while preserving the ability of patent holders to legitimately protect their intellectual property by increasing transparency and accountability in demand letters.

The bill would give the Federal Trade Commission the authority to levy fines on fraudulent practices.

“With so many stakeholders with differing perspectives, the process has been difficult — but our product reflects the input of the most divergent interests on this subject,” said U.S. Rep. Lee Terry, R-Neb. and chairman of the committee. “Our bill strikes the appropriate balance.”

Mossoff, himself, testified at a hearing for the legislation in May. He said his only issue with the bill is that it mandates certain types of disclosures in demand letters, which could lead to potential First Amendment issues.

“With that aside, the other aspects of the bill are actually quite good,” he said.

Mossoff noted that Terry has worked hard to draft a bill that “actually addresses the bad actors.”

“It’s undeniable that there are bad actors,” he said. “But the concern is that Congress is using a nuclear missile to kill a mouse.

“We have to be careful to not impose collateral damage on good companies and good innovators.”

And though U.S. Sen. Patrick Leahy, D-Vt., has blamed the recent failure of his bill, the Patent Transparency and Improvements Act, on Senate Majority Leader Harry Reid, Mossoff contends the Senate’s due diligence also played a part.

“The Senate held hearings and actually permitted multiple stakeholders to be involved in the process, which the House never heard,” Mossoff pointed out, referring to the Innovation Act, which was approved in an overwhelming bipartisan vote in December.

“There were a significant amount of stakeholders that had concerns about the far-ranging changes in the House version — small innovators, small companies and many other companies that have legitimate business models.

“As a result, they couldn’t reach a compromise.”

So what of U.S. Sen. Claire McCaskill’s troll bill?

McCaskill, D-Mo., introduced the Transparency in Assertion of Patents Act in February. It was assigned to a congressional committee and has yet to move or be voted on.

Her legislation would empower the FTC by requiring minimum disclosures in demand letters. It also would allow the commission to specify for businesses exactly what constitutes a deceptive demand letter.

“My impression is that they’re waiting to see what happens with Terry’s bill before moving forward with McCaskill’s,” Mossoff said, noting there is more wide-ranging support for Terry’s bill.

“The process for (the TROL Act) was inclusive and transparent, and the bill is very narrow and targeted. So there is much more support for it.”