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Patent Reform Shows Signs of Life in Congress Patent Reform Shows Signs of Life in Congress

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Patent Reform Shows Signs of Life in Congress

Once thought dead and buried for 2014, patent reform is suddenly gaining traction in the House. But the clock is ticking.

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(CHRISTOF STACHE/AFP/Getty Images)

Congress has developed a small appetite for patent reform again, just months after a major bill thought to be on its way to the president's desk crashed and burned in the Senate.

Despite a late rally of opposition from Democrats, the House Energy and Commerce's Trade Subcommittee on Thursday passed 13-6 mostly along party lines a narrow measure that aims to cut down on "patent trolling," the practice of companies buying up tons of cheap patents and using them to leach cash from inventors by threatening infringement suits.

 

The TROL Act, authored by Republican Rep. Lee Terry, would require that demand letters, which companies send to accuse others of patent infringement, be more transparent and precise in their language. It also codifies authority given to the Federal Trade Commission and state attorneys general to police the delivery of abusive letters.

The measure now moves on to the full Energy and Commerce Committee, where it has considerable support from Chairman Fred Upton. But with so few days left in the election-year legislative calendar before Congress breaks for the August recess, reform advocates are unsure how far the bill can realistically go. Many, too, are still stinging from a crumbling defeat this spring in the Senate.

"If they can iron out some of these final things like making the FTC more comfortable … then I think it has a reasonable, but not overwhelming, shot," said one patent lobbyist familiar with the negotiations. "But time is not this or any bill's friend."

 

Timing aside, the TROL Act is not without its detractors. While earning praise from some patent stakeholders, others, such as the Main Street Patent Coalition and CCIA, remain skeptical. The bill has encountered resistance from the FTC and some Democrats, who argue that it does not go far enough to protect small companies and individual inventors.

Democrats also charged Terry with not allowing important players, including the FTC, enough time or say in the development of the bill. Terry has forcefully pushed back against this claim.

"The minority staff continually raised concerns that relevant stakeholders did not have access to those drafts and were not part of the conversation," said Rep. Jan Schakowsky, the panel's top Democrat, during debate Thursday.

Rep. Peter Welch, a Vermont Democrat, sounded concern that the narrow TROL Act would actually prevent more substantial patent-reform legislation from getting through Congress. Welch mentioned the Innovation Act, a sweeping reform package that passed the House late last year before the Senate gave up on months of intense negotiations. Majority Leader Harry Reid, who was under pressure from trial lawyers and other constituencies, was widely blamed for the sudden collapse.

 

The TROL Act would provide "an excuse for the Senate not to act on the comprehensive bill," Welch said.

Earlier this week, Senate Judiciary Committee Chairman Patrick Leahy, who led the effort for patent reform in his chamber, told the Burlington Free Press that he was "furious with what happened" but added, "I'm not going to give up."

But echoing Republican criticisms, Leahy blamed Majority Leader Harry Reid and others for not allowing the bill to come to the floor. Reid's office, meanwhile, continues to be mute on the issue.

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CORRECTION: A previous version of this article stated that the subcommittee vote was along party lines. Democrats Jim Matheson and John Barrow voted for the TROL Act.

How Patent Trolls Are Costing the Economy Billions Each Year

This article appears in the July 11, 2014 edition of NJ Daily.

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Love it - first thing I read in the morning."

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I read the Tech Edge every morning."

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