House Panel Advances Major Patent Troll Legislation

The Innovation Act easily passed the House Judiciary Committee on Thursday, but substantial differences remain between it and the patent-troll fighting measure favored by the Senate.

WASHINGTON, DC - APRIL 25: Rep. Bob Goodlatte (R-VA) (R), Chairman of the House Judiciary Committee, and Rep. Trey Gowdy (R-SC) speak about immigration during a news conference on Capitol Hill, April 25, 2013 in Washington, DC. The news conference was held to discuss immigration control issues that are before Congress. (Photo by Mark Wilson/Getty Images)
National Journal
June 11, 2015, 3:29 p.m.

Pat­ent troll le­gis­la­tion is mov­ing for­ward in the House, but a mara­thon markup and a string of amend­ment battles un­der­scored the meas­ure’s un­cer­tain path to be­com­ing law.

The House Ju­di­ciary Com­mit­tee on Thursday passed 24-8 the In­nov­a­tion Act, a meas­ure that aims to clamp down on so-called “pat­ent trolling” by chan­ging sev­er­al as­pects of how pat­ent-in­fringe­ment cases are lit­ig­ated. The vote comes just a week after the Sen­ate Ju­di­ciary Com­mit­tee eas­ily passed a sim­il­ar bill, though ob­serv­ers say sig­ni­fic­ant dif­fer­ences re­main between the two meas­ures.

House Ju­di­ciary Chair­man Bob Good­latte shep­her­ded the “In­nov­a­tion Act” through a mara­thon markup that in­cluded the ad­op­tion of sev­er­al amend­ments, in­clud­ing a man­ager’s pack­age that caused some last-minute jit­ters among some stake­hold­ers sup­port­ive of the meas­ure be­fore oth­er tweaks were also ac­cep­ted. Oth­er amend­ments were de­ferred for later con­sid­er­a­tion, with Good­latte prom­ising they would earn de­bate as the bill moves to the House floor.

Sev­en Demo­crats, led by rank­ing mem­ber John Con­yers, voted against Good­latte’s bill, ar­guing that the Sen­ate’s le­gis­la­tion offered a more bal­anced ap­proach. Rep. Louie Gohmert of Texas cast the lone Re­pub­lic­an vote against the In­nov­a­tion Act.

Though the In­nov­a­tion Act passed the House 18 months ago in a land­slide, op­pon­ents of sweep­ing changes to pat­ent law are more mo­bil­ized now—and they don’t ap­pear ready to quit their ef­forts. The swift­ness of the bill’s pas­sage last Con­gress sur­prised some groups that op­pose the pro­pos­al, in­clud­ing uni­versit­ies and phar­ma­ceut­ic­al com­pan­ies. The op­pos­i­tion re­grouped and suc­ceeded in stalling ef­forts in the Sen­ate, and they con­tin­ue to lobby both cham­bers for ad­di­tion­al changes.

After Thursday’s vote, Good­latte dis­puted that get­ting the In­nov­a­tion Act out of the com­mit­tee was more dif­fi­cult this time around. “We had a long amend­ment markup last time, and we ac­tu­ally did not markup that bill un­til we were in­to the second year of that Con­gress, so in that sense we’re way ahead of the sched­ule we had last time,” Good­latte told re­port­ers. “It’s good be­cause we have time to work on it go­ing to the floor and with the Sen­ate.”

Sen­ate Ma­jor­ity Whip John Cornyn, one of the chief back­ers of pat­ent re­form in the up­per cham­ber, said there was “no spe­cif­ic timetable” for mov­ing for­ward with the Pat­ent Act, which cleared the Sen­ate Ju­di­ciary Com­mit­tee 16-4 last week. When asked if the bill could earn con­sid­er­a­tion this sum­mer, Cornyn smiled be­fore of­fer­ing,” I would like to see it soon­er rather than later.”

“We’re in­ter­ested to see what the House is go­ing to do and re­cog­niz­ing we need to re­con­cile the dif­fer­ences with them if we’re go­ing to get something to the pres­id­ent’s desk,” Cornyn told Na­tion­al Journ­al Thursday. “It’s one of those things avail­able to the ma­jor­ity lead­er when we have time.”

A par­tic­u­lar fault line between the two cham­bers con­tin­ues to be pro­vi­sions in­volving so-called fee-shift­ing, or the prin­ciple of mak­ing it easi­er for win­ners of frivol­ous pat­ent in­fringe­ment suits to force the los­ing party to pay for leg­al fees. At­tempts by Demo­crats to weak­en the In­nov­a­tion Act’s fee-shift­ing stand­ard—in a bid to align it more with the Sen­ate bill and sat­is­fy tri­al law­yers—came up short Thursday, set­ting up a po­ten­tial show­down between House and Sen­ate.

The House pan­el did ad­opt an amend­ment, au­thored by GOP Rep. Dar­rell Issa, that tweaked the bill’s ven­ue pro­vi­sion. Issa, who chairs the pan­el’s sub­com­mit­tee on in­tel­lec­tu­al prop­erty, said the meas­ure was ne­ces­sary to pre­vent “un­reas­on­able ven­ue-shop­ping,” tak­ing time to call out the East­er Dis­trict of Texas, which is of­ten blamed for sid­ing with trolls who go out of their way to file in­fringe­ment suits in that friendly court.

“The idea that that many should be con­cen­trated in any one dis­trict or any one judge “¦ shows there is a need to get ap­pro­pri­ate ven­ue,” Issa said.

But Issa failed to col­lect enough sup­port be­hind an­oth­er amend­ment he and Rep. Judy Chu offered that would have ex­ten­ded a U.S. Pat­ent and Trade­mark Of­fice audit pro­gram (known as “covered busi­ness meth­od re­view”) from its cur­rent 2020 ex­pir­a­tion through 2026. Start up groups and In­ter­net com­pan­ies fa­vor both an ex­ten­sion and ad­di­tion­ally an ex­pan­sion of the pro­gram—which cur­rently af­fects only fin­an­cial ser­vices pat­ents—to in­clude soft­ware pat­ents as well. Oth­er large tech com­pan­ies, in­clud­ing Mi­crosoft and IBM, staunchly op­pose CBM ex­pan­sion on grounds it could un­der­mine le­git­im­ate in­tel­lec­tu­al prop­erty rights.

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