Congress continues its work to pass legislation aimed at reducing abuse from patent trolls.
Earlier this week, House Judiciary Committee Chairman Bob Goodlatte (R-VA) had introduced a Manager’s Amendment to the Innovation Act, H.R. 3309. The Amendment eliminated provisions in the original bill that had nothing to do with patent trolls, such as the provision expanding and making permanent the PTO Business Method review proceedings.
Yesterday, the Committee held a markup session where the majority turned back numerous proposed Democratic amendments aimed at softening many of the bill’s provisions related to discovery, fee shifting, and other provisions. There were objections that the bill is ostensibly aimed at patent trolls, but its provisions apply to all patent infringement plaintiffs.
The only amendment of any substance that was approved by the Committee was intended to somewhat soften the fee shifting provisions. While the original bill called for automatic fee shifting unless the losing party’s conduct was “substantially justified,” the language was amended to “reasonably justified.” Fee shifting could also be waived if it would cause economic hardship to the losing party. The new provision is meant to apply only to egregious cases.
The Committee also lumped in provisions related to licensing demand letters, requiring them to contain more detailed information.
The amended bill was approved by the Committee in a 33-5 vote. The bill will now move to the House floor for full debate and vote.
Patent Transparency and Improvements Act
Meanwhile, on the other side of the Capitol, Sens. Patrick Leahy (D-VT), Mike Lee (R-UT), and Sheldon Whitehouse (D-RI) introduced a bill in the Senate that is aimed a patent trolls, S. 1720. This bill is aimed primarily at the most egregious actors and not at patent owners generally. House Judiciary Committee members Reps. John Conyers (D-MI) and Mel Watt (D-NC) have expressed support for this bill instead of the House’s more extensive reform bill.
S. 1720 would authorize the Federal Trade Commission (FTC) to act against parties sending out patent demand letters that include include materially deceptive or fraudulent assertions. Such letters would need to include sufficient details to permit a party to investigate and respond to the allegations, including the patent owner’s identity, patent being asserted, and reasons for the assertion.
The Senate bill also includes provisions to change claim interpretation of issued patents by the PTO. Currently, the PTO uses the “broadest reasonable interpretation,” while courts review the patent specification and file history to determine the correct claim interpretation. This provision would make the two standards the same and add to predictability in post-grant proceedings.
The good news for patent owners is that a number of bills are now being proposed in Congress to address perceived problems with patent litigation and demand letters. Perhaps this will spur analysis and debate of the competing bills rather than quick passage of a bill without sufficient review and consideration.
The actions of some patent assertion entities have certainly caused anguish among their targets and needs to be addressed. Revamping the entire system, however, is not the answer as it will deter legitimate infringement allegations and further reduce the value of patents.