Last year, the push for patent reform hit a roadblock in Congress when then-Senate Majority Leader Harry Reid refused to bring the Patent Abuse Reduction Act to the floor for a vote. In the war between industry advocates and trial lawyers, Reid chose the trial lawyers, and the patent trolls were off the hook.
The new Republican majority is looking to break that pattern of obstruction.
A new iteration of patent reform legislation is currently making its way through the Senate. A bill introduced on Wednesday would target firms that make their money not via innovation, but by filing bogus lawsuits against the innovators under the guise of protecting intellectual property. The bill, which is a product of negotiations between both parties, would place restrictions on “demand letters” sent by firms, end the practice of using shell corporations to hide who owns (or “owns”) a patent, and shift the responsibility for paying court costs if the suit is not “objectively reasonable.”
Patent reform is one of those unicorn-type issues that has bipartisan support, even if its backers sometimes disagree on the specifics.
Via The Hill:
Sen. Charles Schumer (D-N.Y.), who was involved in negotiations over the new legislation, said the bill “shifts the legal burden back onto those who would abuse the patent system in order to make a quick buck.”“I’m hopeful we can move quickly and in a bipartisan way to get this bill passed in committee and on the Senate floor this summer,” he said. A hearing on the bill is already in the works.The other lawmakers involved in drafting the bill were Sen. John Cornyn (R-Texas), Judiciary Committee Chairman Chuck Grassley (R-Iowa) and ranking member Patrick Leahy (D-Vt.). The bill also has the support of other panel members, including Sens. Orrin Hatch (R-Utah), Mike Lee (R-Utah) and Amy Klobuchar (D-Minn.).“As I look at the assembled people on the platform today, this is as close as you get to legislative shock and awe,” Cornyn said about the bipartisan co-sponsors.
The bill is backed by many powerful economic and trade organizations, but is still the target of attacks from trial lawyers and others who stand to profit from patent trolling.
This isn’t the first time Congress has attempted to stop patent trolls in their tracks—but firms have found their way around regulations:
The 2011 law prohibited patent holders from filing dozens of suits at once. But otherwise, it did not do much about trolls. The major Silicon Valley companies, who are major targets of patent trolls, were dissatisfied.Since then, patent suits have risen sharply. And there were new tactics by some of the most aggressive firms. They began filing demand letters with nontech companies, including retailers, hotels and restaurants. The allegations included the claim that some feature on their websites, usually involving software they bought from a technology supplier, violated some patent.“Those stories resonated,” said Aaron Cooper, a lawyer at Covington & Burling and a former chief counsel for intellectual property in the Senate Judiciary Committee. “Now, it wasn’t just companies in Silicon Valley. It was companies in every state.”James Bessen, a patent expert at Boston University Law School, said, “The litigation problem got worse, and it spread into mainstream America. That’s why we’re seeing this now, only four years after we had major patent reform legislation.”
The patent trolls are just as inventive as the people they target; I don’t expect this bill to be a poison pill, but it does stand to close loopholes. We’ll keep you updated as the bill moves through Congress.
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