CQ NEWS – POLICY
Dec. 17, 2013 – 6:00 p.m.
By John Gramlich, CQ Roll Call
Senators suggested Tuesday that a consensus approach on curbing abusive «patent» litigation may be harder to find in their chamber than it was in the House, which easily passed a comprehensive bill on Dec. 5 after relatively little debate.
Members of both parties agreed during a three-hour Senate Judiciary Committee
hearing that frivolous «patent» litigation poses an increasing threat to
American innovation and productivity. But they floated a wide range of
responses to the problem, indicating that the Senate may face an extended
debate in the weeks and months ahead.
Senate Judiciary Chairman Patrick J. Leahy, D-Vt., advocated for a bipartisan
proposal he developed alongside Sen. Mike Lee, R-Utah, that targets bad actors,
commonly known as “trolls,” that may not make any products or offer any
services, but file «patent» infringement lawsuits against companies and
consumers for the express purpose of obtaining costly legal settlements or
The Leahy-Lee bill (S 1720) would address such abusive litigation through a
number of steps, including by calling on the Federal Trade Commission to crack
down on misleading “demand letters” that «patent» trolls regularly send to
businesses and consumers to accuse them of «patent» infringement. The proposal
also would provide new legal protection for customers who are targeted for
merely using a «patented» product or service.
“These measures take significant steps to address the problem of «patent»
trolls and misuse of the «patent» system,” Leahy said. “Importantly, the
measures also are balanced and targeted to preserve the rights of legitimate
«patent» holders whose inventions help drive our economy.”
But Sen. Charles E. Schumer, D-N.Y., said the Leahy-Lee bill does not go far
enough because it does not address the quality of «patents» that were issued in
the first place. Schumer urged the Senate to take up his proposal (S 866),
which would allow the «Patent» and Trademark Office to re-evaluate some
«patents» it has already issued. The White House supports Schumer’s bill.
Schumer said trolls have been able to seize on poor-quality «patents» to file
lawsuits and that giving PTO a chance to review its work would amount to a
“cost-effective off-ramp from the «patent» litigation highway.”
“At the end of the day, if we do not address the fundamental problem of
«patent» quality, trolls will continue to abuse poor-quality «patents» and we
will be right back here having this same debate,” Schumer said. “A «patent»
reform bill that does not address «patent» quality is like treating the
symptoms instead of the disease.”
Other members of the Senate Judiciary Committee floated their own proposals.
Dianne Feinstein, D-Calif., and Chris Coons, D-Del., both said they are
concerned that the PTO is underfunded, with Feinstein announcing she will
introduce her own legislation in the coming weeks to ensure that the user fees
on which the agency relies cannot be diverted. The office “should remain wholly
self-supporting,” she said.
“I hope you, Mr. Chairman, will take that into consideration as you move your
bill,” she told Leahy.
All told, at least eight of the 18 members of the Senate Judiciary Committee
are already sponsors or cosponsors of bills aimed at frivolous «patent»
litigation, highlighting the breadth of policy ideas that the panel is
Besides the Schumer and Leahy-Lee measures, committee Republicans have their
own proposals that closely track with the House-passed bill (HR 3309). Orrin G.
Hatch, R-Utah, is sponsoring legislation (S 1612) that would require the losers
in «patent» infringement cases to pay the costs incurred by the winning party
unless certain conditions are met. Hatch argues that the bill would take away
trolls’ economic incentives to file meritless lawsuits.
John Cornyn, R-Texas, and the panel’s ranking Republican, Charles E. Grassley
of Iowa, are sponsoring their own legislation (S 1013) that has several
provisions similar to the House bill. The measure, for instance, requires
«patent» holders to disclose more information about their inventions in court
pleadings, in an attempt to ensure that plaintiffs have legitimate claims.
Differences With House
Sen. Sheldon Whitehouse, D-R.I., acknowledged that the Senate debate could
easily become derailed by competing proposals. He urged proponents of a
«patent» litigation overhaul to remain focused on reaching conference
negotiations with the House, rather than getting exactly what they want out of
the Senate’s legislation.
“Be as flexible as you can be to get a bill through the Senate that can then
get you into conference with the House,” he said.
Even in the early stages of the Senate debate, however, some senators signaled
that they oppose parts of the House bill. Richard J. Durbin of Illinois, the
Senate’s second-ranking Democrat, said he has serious concerns about the
House’s “loser pays” provision, saying it flips the current litigation system
on its head and may harm small businesses.
“You need pretty deep pockets to live under this new fee-shifting system” that
the House bill would create, Durbin said.
Coons raised concerns that Congress might step too forcefully into the realm of
the courts by mandating how «patent» infringement lawsuits should unfold, a
criticism that has been leveled at the House bill because it would create new
civil litigation rules. The proposal from Coons and Feinstein to shore up
funding for the PTO also would differ from the House bill, which rejected that
Schumer’s proposal regarding administrative review of some «patents»,
meanwhile, would be a major departure from the House bill. The House sponsor,
Judiciary Chairman Robert W. Goodlatte, R-Va., initially included a similar
plan, but removed it in an effort to win more support.
Patience, Caution Urged
Several senators said Tuesday that they hope to work more deliberatively than
the House, which passed Goodlatte’s bill by a vote of 325-91 some six weeks
after it was introduced.
“The one thing that I find there is agreement on with the California
constituency in this area is, ‘Please have another hearing,’ ” Feinstein said.
Coons noted that Congress had passed the last major «patent» overhaul, in 2011,
after years of negotiation, and said he is hopeful the Senate will devote “a
few more months to making sure we get this topic right.”
Coons and several other committee members said they are concerned that
lawmakers would upset the “fragile ecosystem” of the nation’s «patent laws if
they move too quickly or aggressively.
“I am worried about overkill,” Sen. Richard Blumenthal, D-Conn., said. “I am
worried about unintended consequences.”