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.

A sign reading 'patent' has been put on a basket full of tomatoes during a protes staged by Greenpeace activists against food patents in front of the patent office in Munich, southern Germany, on July 20, 2010.
National Journal
Dustin Volz
July 10, 2014, 8:19 a.m.

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.

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.