April 3, 2014
When fighting patent trolls, it's better to wait for a clean opening than to rush into a messy melee.
That was the message conveyed by several members of the Senate Judiciary Committee on Thursday, as the panel took up patent reform for the second time in as many weeks—only to again delay markup of any legislation until at least next Tuesday.
Chairman Patrick Leahy said during the committee's executive business session that concerns over striking the right balance on the issue persist, but that he is hopeful he is in the "final stages of hammering out a manager's amendment that is the result of true compromise."
The Vermont Democrat added that negotiations are in full swing on how to best curb the problem of trolls—companies that buy cheap patents and use them for profit by threatening infringement suits against others in hopes of settling—and that he wants to broker an agreement by the end of the week for full consideration next week.
Leahy gave some indication of what a legislative compromise might look like. He mentioned fee-shifting, which would require the loser to pay the winner's legal fees in an infringement case, as an important measure that has "merit" specifically in patent cases, but he noted that judges should maintain a role in determining when to enforce it. The chairman also mentioned a provision from Sen. Orrin Hatch that targets shell companies as one that is important but remains complicated.
But while some of Thursday's discussion gave a peek at the behind-the-scenes sausage-making, much of it involved lawmakers defending their slow approach, which stands in stark contrast to the House's quick passage of an omnibus patent bill, the Innovation Act, late last year with large bipartisan support.
"You are wise to delay," Sen. Chuck Schumer told Leahy. "Getting a good bill is better than just getting a bill," a phrase that Leahy and Chuck Grassley, the panel's top Republican, echoed.
Sen. Dick Durbin, meanwhile, urged continued caution, and indicated the committee is still agonizing over the proper scope of a number of provisions.
"The House of Representatives passed a bill in a hurry," Durbin said. "Introduced in one day, and came up for a vote on the House floor 43 days later. I'm not sure they had a thoughtful deliberation, and I hope we do."
The Illinois Democrat added that fewer than one in five infringement suits is actually levied by a troll, citing 2011 data from the Government Accountability Office, and he said, "We need to make sure we preserve the rights of legitimate patent holders … and don't have unintended consequences."
But House Judiciary Chairman Bob Goodlatte, who sponsored the Innovation Act, said the Senate needs to act swiftly, as time may be running out.
"We think it's important that they act on it and they act expeditiously, as this Congress is about to close," Goodlatte told National Journal on Thursday. "But we also say it's most important that they get it right."
The Virginia Republican said he doesn't have a definitive timeline for when the Senate needs to pass a bill, but added simply, "The sooner, the better."
Schumer, a New York Democrat, said earlier this week that the Judiciary Committee needed to act in April or May at the latest to have a chance of getting a patent-reform bill on the president's desk this year. After the Innovation Act's passage, many reform advocates had said they had hoped for Senate Judiciary to pass a bill out of committee by January or February, a period the panel occupied with a series of educational briefings on patent litigation.
One of the reasons for the slog has been the intense attention that patent reform has drawn from a wide swath of business interests including tech, universities, and retailers. A flurry of lobbying from all sides has circled the Capitol this week, as start-ups and other stakeholders are making final pushes to keep their favored provisions from being left on the cutting room floor.
Engine Advocacy and the Consumer Electronics Association, for example, flew in a dozen founders of tech start-ups this week to meet with a handful of lawmakers and patent staffers to plead for a strong anti-troll bill.
But lobbying against sweeping reform provisions has also spiked. The Alliance of U.S. Startups and Inventors for Jobs and other groups representing inventors met with Hill staffers Wednesday to voice their opposition to a large swath of proposals on the table, including fee-shifting, customer-stay, and heightened pleading standards. Piling on, about 30 organizations representing universities, biotech, and medical sciences sent a forceful letterto the Senate Judiciary promising to oppose legislation that doesn't strike the "appropriate balance" on a number of contested provisions.
The largest salvo may have come Thursday, as IBM, Microsoft, Apple, and other tech giants joined with pharmaceutical companies and manufacturers to form the Partnership for American Innovation to caution lawmakers to be judicious as they wrap up consideration of reform proposals.
"Despite their differences, all of these companies are unified because they depend on America's world leading patent system to safeguard their investments," the the group says on its website.
As the lobbying intensifies, stakeholders will continue to do what they have done for months: wait. At least until next week.
April 3, 2014