Momentum Builds for Patent Reform in House

WASHINGTON, DC - JULY 17: Chairman Bob Goodlatte (R-VA) listens to testimony during a House Judiciary Committee hearing, July 17, 2013 in Washington, DC. The committee is hearing testimony from members of the intelligence community on oversight of the Obama Administration's use of the Foreign Intelligence Surveillance Act (FISA). 
National Journal
Dustin Volz
Oct. 23, 2013, 4:27 p.m.

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.

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