Following hours of back-and-forth verbal sparring, the House passed a bill Thursday aimed at reducing predatory patent litigation, marking the first step forward for patent-reform advocates since the passage of the 2011 America Invents Act.
The bill, which passed with strong bipartisan support on a 325-91 vote, makes procedural changes intended to limit the adverse and chilling impact on innovation made by so-called patent trolls, or companies that profit by buying up patents and using them to target others with infringement lawsuits. The bill would require plaintiffs to be more specific in their lawsuits, increase transparency of patent ownership, reduce the costs of discovery, and protect end users, such as coffee shops who might purchase a patent-protected item from a vendor. It also makes it easier for those who successfully defend themselves against a patent lawsuit to recover legal costs.
"This bipartisan legislation should send a powerful message to patent trolls that their continued abuse of the patent system and extortion of American businesses will not be tolerated," said Michael Beckerman, president and CEO of the Internet Association, in a statement. "We are also encouraged by the White House's support of the bill and will continue to work with the Senate to ensure the passage of strong and effective legislation that deters the abusive litigation practices of patent trolls and promotes innovation and economic growth."
Patent-troll litigation costs the U.S. economy $80 billion a year, according to one oft-cited study from Boston University. Though some dispute those numbers, nearly everyone agrees that patent trolling is a problem that has ballooned in recent years, particularly in the software industry.
But the Innovation Act also represents the first substantial victory to some sectors of the tech community that have become increasingly frustrated with Congress's inability to address their top concerns. Immigration reform continues to flounder and government-surveillance disclosures continue to agitate large swaths of the tech community, both big and small.
Despite the bill's easy passage in the House, no one, including Judiciary Committee Chairman Bob Goodlatte, R-Va., thinks the bill is a panacea. It was greeted with nearly unfettered enthusiasm when it landed in late October, the culmination of months of work and two public-discussion drafts. But the coalition of large tech firms, start-ups, and software entrepreneurs began to show crack as the bill quickly slogged through Congress. Opponents said the bill was strong-armed through the Judiciary Committee.
Additionally, a controversial provision championed by many "small guy" stakeholders that would have strengthened the Patent and Trademark Office's ability to reject infringement claims made on bad-quality patents was nixed by Goodlatte following a do-or-die campaign against it waged by large tech firms, including IBM and Microsoft.
"It's not a perfect bill, but it's the closest we've ever come to real reform that would get patent trolls out of the way of innovation, and bring our patent system nearer to its goal of promoting the progress of science and useful arts," said Julie Samuels, a staff attorney with the Electronic Frontier Foundation and the Mark Cuban Chair to Eliminate Stupid Patents.
Eight amendments were brought to the floor Thursday morning, but only four small changes earned approval, including one by Rep. Jared Polis, D-Colo., requiring more transparency in demand letters, and another by Rep. Sheila Jackson Lee, D-Texas, commissioning a study on the economic impact of the bill. A substitute amendment by Reps. John Conyers and Mel Watt, which Goodlatte rebuked as "a poison pill that will kill any attempt at meaningful reform in Congress," was turned down.
Patent-reform advocates now turn their eyes to the Senate, where Judiciary Chairman Patrick Leahy, D-Vt., has scheduled a Dec. 17 hearing for a bill that is similar to Goodlatte's but is open to having other proposals tacked on. Sens. John Cornyn, Orrin Hatch. and Chuck Schumer have all offered their own bills as well.
Patent Reform Is About to Pass the House. But Mel Watt Isn't Done Fighting.
This article appears in the December 6, 2013 edition of NJ Daily.