Patent litigation reform hit an unexpected fever pitch in the House this fall, as Judiciary Committee Chairman Bob Goodlatte muscled a bill through his committee before earning a lopsided bipartisan victory on the House floor.
Now it’s the Senate’s turn to wage war on patent trolls, the term du jour for companies that buy cheap patents and use them to profit by filing questionable infringement lawsuits. And after a week of relative quiet, stakeholders are ramping up lobbying efforts again, determined to not let momentum fade during the holiday season.
“We’re pragmatic, and we are aware the Senate isn’t going to deliver the president a bill by December 25,” said Michael Makin, president and CEO of Printing Industries of America. “But that doesn’t mean we can’t keep being good boys and make sure this is something on his wish list” in 2014.
The Senate’s opening strike against trolls is a two-panel Judiciary hearing Tuesday, featuring wide-ranging testimony from groups representing small business (including Makin), big pharma, large software interests, and a former patent official. Advocates are hoping the hearing paves the way for a markup that would move the measure through committee, saying they hope to get one by late January or February.
But while the legislative measures being considered are largely similar, the Senate troll hunters are taking a different approach — one that could cause some fissures in the big tent coalition that rallied together House consideration.
Judiciary Chairman Patrick Leahy, D-Vt., is starting with a relatively small bill that by design is likely to incorporate proposals from a handful of other senators. It currently addresses end-user protections, and patent ownership transparency and gives the Federal Trade Commission the ability to police nefarious demand letters from patent trolls.
Goodlatte’s Innovation Act, on the other hand, began as an omnibus swipe at patent trolls when it was introduced in October. Its most controversial measures were removed as the measure went forward, but it stands as one comprehensive, if not all-encompassing, vehicle that most stakeholders generally support.
Litigation reform advocates are clamoring for stronger provisions to come out of the Senate, but anything that gets incorporated into Leahy’s bill will require consensus and bipartisan support, aides say.
One issue certain to attract some attention is the controversial Covered Business Method review program, which allows the U.S. Patent and Trademark Office to reject infringement claims on some patents deemed low quality.
An expansion of that program was left on the cutting-room floor during markup of the House’s Innovation Act, but Democratic Sen. Chuck Schumer of New York has a bill seeking to strengthen it, believing it would reduce the amount of litigation costs in the patent system by helping to kill low-quality patents.
The measure is opposed by many large tech firms — including Adobe, which is testifying Tuesday — but strongly supported by most coalitions representing tech start-ups and software innovators.
The small-guy interests still support reform legislation without the provision, some of the larger interests, particularly IBM and Microsoft, are willing to campaign vehemently against any bill including CBM expansion. Their efforts were successful in convincing Goodlatte to strike a measure in his bill, and they appear ready for another round of vigorous lobbying if the Senate entertains its adoption.
Still, small-business groups remain hopeful the provision stands a chance in the Senate. Other issues likely to stoke debate are fee-shifting and the customer-stay provision in Leahy’s bill, which the National Retail Federation calls a “poison pill.”
Aside from Schumer’s bill, Sen. Orrin Hatch, R-Utah, has a proposal that targets shell companies and would require them to post a bond if they lacked assets, which supporters say would increase the risks of patent trolling. A bill from Sen. John Cornyn, R-Texas, aims to make patent litigation less costly and raises pleading requirements for the original complaint.
The Senate hearing begins at 10 a.m.
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