Reform advocates were buoyed Wednesday following the introduction of yet another bill designed to rein in abusive patent-litigation practices.
Flanked by a bipartisan cohort of cosponsors at a crowded press conference, House Judiciary Committee Chairman Bob Goodlatte, R-Va., unveiled his latest legislative attempt to address “patent trolling.”
“Abusive patent litigation is a drag on our economy,” Goodlatte said. “Everyone from independent inventors, to start-ups, to mid- and large-sized businesses face this constant threat.”
Patent trolls — officially known as “assertion entities” — purchase patents from struggling or failed companies on the cheap and use them to demand royalty payments from technology users under threat of a lawsuit. Though legal, they have been blamed for costing the economy tens of billions of dollars.
Patent-reform advocates have been closely watching Goodlatte’s moves on the issue and expressed mostly unfettered enthusiasm for his bill, which amounts to an omnibus effort at reform: It raises pleading requirements for a complaint in infringement cases; addresses discovery costs so that most documents requested must be paid for by the requesting party; and includes a cost and fee-shifting provision that can be pushed both ways as well as protections for end users.
“One of the positive things here is that this is a bipartisan economic initiative that Congress can actually get done,” said Matt Levy, patent counsel with the Computer and Communication Industry Association. “And I think that’s something members of both parties really need.”
Goodlatte’s bill is the latest legislative stab at patent reform. It follows a half-dozen other measures introduced this term, including a measure introduced by Reps. Peter DeFazio, D-Ore., and Jason Chaffetz, R-Utah, and another introduced by Rep. Blake Farenthold, R-Texas. DeFazio, Chaffetz, and Farenthold are all among the original cosponsors of Goodlatte’s new bill.
“It’s really important to point out the comprehensive nature of this bill is what makes it really stand out,” said Julie Samuels, a staff attorney at the Electronic Frontier Foundation who also has the title of Mark Cuban Chair to Eliminate Stupid Patents. “It takes into account all the other bills.”
Goodlatte had previously sought public input via two discussion drafts of his bill, the more recent of which was released one month ago. That process has apparently worked well enough to satisfy a large swath of tech companies and patent-reform advocates, who discussed the bill shortly after its release. Patent advocates say the current bill differs marginally from the second draft, but noted it is a significant improvement on the first iteration.
The Coalition for Patent Fairness, a group consisting of Google, Oracle, Cisco, and others, also released a statement calling the Innovation Act “a major step forward in curbing the worst abuses of patent trolls.”
Seizing the momentum, Goodlatte has scheduled a committee hearing on his bill Tuesday.
The surge in reform efforts this term — just two years after the passage of the America Invents Act, which significantly updated patent law for the first time in decades — highlights the recent explosion in patent litigation. According to one Boston University study, patent trolls cost the U.S. economy $80 billion, while companies had to shell out about $29 billion on related legal fees in 2011, up from around $7 billion in 2005.
“A lot of these reforms were not able to be part of the America Invents Act because we did not have enough consensus,” Goodlatte said. “But since that time the problem of patent trolls has grown immensely.”
Goodlatte said he was “encouraged” when asked if he was confident his bill could pass the House. “I think the focus will be on this legislation because it has such a broad base of support and we have worked Democrats and Republicans, senators and House members, and with the executive branch to make sure we have something that can have a consensus,” he said.