A just-introduced Senate version of patent troll legislation, the PATENT Act, drew a crowd of commenters Wednesday (April 29).
That legislation is an effort by Congress to balance the speech and patent rights of patent assertion entities (PAEs) with reining in the abuse of that process to extort money from companies or groups without the wherewithal to fight that abuse.
Charles Duan, director of the Patent Reform Project at Public Knowledge, liked the sound of the bill. "We have long awaited the day when the Senate would unveil its proposal for patent reform. The PATENT Act is a major first step toward meaningful patent reform that will protect consumers, small businesses, and the American public," he said.
"In particular, this bill includes consumer protections from abusive patent demand letter practices. Even more promisingly, we understand that the PATENT Act overcomes many of the problems we have raised with the TROL Act when it comes to patent demand letters, such as not preempting stronger state law protections."
A House version of patent "troll" legislation that passed Wednesday would replace what its Republican backers called a patchwork of state laws with a national standard. But it would set a too-high bar for Federal Trade Commission enforcement of the standard, including a requirement that the FTC prove bad faith.
"The patent system was set up to encourage innovation - not hold it back," said Computer & Communications Industry Association president Ed Black. "For too long patent trolls have been able to manipulate our legal system in ways that were never intended. This Senate bill contains some real reforms and we hope proponents can resist the inevitable pressure to water down meaningful improvements. We look forward to working with staff as the language evolves."
"Businesses across the technology ecosystem — from iconic companies to innovative startups — have something in common: they are frequent victims of predatory patent litigation by entities seeking to extort windfall fees and settlements," said Linda Moore, president of TechNet. "This abuse of the American patent system needs to stop. The legislation introduced today would fundamentally change this dynamic and dramatically reduce baseless infringement claims that are nothing but a drain on innovation and American competitiveness."
"This bill is an important step forward on patent reform that we believe will be effective in curtailing abusive litigation," said Software & Information Industry Association VP of public policy, Mark MacCarthy. "We strongly support the provisions that will improve transparency, create higher pleading standards, and enforce limits on document discovery. While we see areas for improvement, we believe that the combination of these components creates a strong reform package."
The Information Technology Industry council pushed for passage.
"The tech sector is pleased to see a bipartisan effort emerge in the Senate to put the brakes on patent trolls. The integrity of the U.S. intellectual property system is essential to advancing cutting-edge breakthroughs," said the group. "But patent trolls have become a multi-billion dollar industry based on exploiting flaws in the patent system to extort money from legitimate patent holders, including startups and tech companies, through frivolous lawsuits. These needed reforms will help stop abusive patent litigation, which drains money that should be used to invest in entrepreneurship, innovation, and job creation."
So did the Consumer Electronics Association. "We're encouraged by the introduction of this bill and ask the Senate to move forward on the PATENT Act as soon as possible," said CEA president Gary Shapiro. "As the number of troll demand letters, threats and lawsuits reach epidemic levels, now is the time for comprehensive reform. American innovation can't afford to wait any longer.... Patent trolls are an enormous drain on the U.S. economy, siphoning off $1.5 billion a week— roughly $110 billion since the House passed reform legislation in 2013. Every dollar a small business spends on legal bills or yielding to legal extortion of a patent troll or fighting a patent troll in court is money it can't invest in building new products or creating new jobs."
But not everyone was rolling out the welcome mat. Innovation Alliance Executive director Brian Pomper said that while it included some improvements over earlier proposals, the bill would "cripple" the ability of patent owners to fight infringers. "While we strongly support targeted measures to stop abusive behaviors, we fear the provisions of the PATENT Act, taken together, would tilt the playing field against our country's most innovative enterprises, including individual inventors, start-ups, universities, and research and development-based technology companies," he said.