As you may have heard, we basically have a deal on patent reform in the Senate Judiciary Committee. While lawmakers couldn’t quite get it done before recess, they left town with what Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) described as a “broad bipartisan agreement in principle” on patent reform. I’m hearing from sources that nearly everything is worked out except the fine tuning of language. We can expect to see the manager’s amendment in a couple of weeks when the Senate returns.
The members of the Senate Judiciary Committee spent weeks listening to stakeholders and conducting a lot of in depth substantive discussions. And lest you think that this bill sprang out of nowhere, provisions to deal with patent trolls were debated as part of the America Invents Act; that’s 8 years in the making.
This deal comes after the House passed the Innovation Act 325-91, with Democrats supporting it 2 to 1. Chairman Leahy is working in collaboration with Chairman Goodlatte of the House Judiciary Committee, which really improves the chances of getting the House and Senate to agree on a bill pretty quickly.
Another sign that we’re nearly there is that some big companies seem to be accepting the inevitability of reform. One harbinger is the recent news that Intellectual VenturesThe largest patent aggregator, currently holding around 40,000 patents. Closely associated with co-founder Nathan Myhrvold. IV is often viewed as a patent assertion entity, although much of its activities are conducted through spinoffs, and the company is at least nominally in the business of producing inventions in-house. See our posts on Intellectual Ventures., the “gentleman gangster” of patent trolls, is having trouble with some of its early funders. Reports late last week in Reuters and National Journal say Apple and Intel—both previous financial backers of IV—have demurred on investing in its latest acquisition fund. Some analysts say the decision by Apple and Intel to shut off the spigot to IV has more to do with IV’s diminishing rate of return than with politics. But I have to believe that the impending reality of patent reform played a major role.
On the other hand, pronouncing patent reform doomed due to partisan bickering is a provocative narrative, so some commentators are running with it.
But don’t believe it. Given where we are, the current legislative process is normal. Part of the work has been navigating the right compromises—and there will be gentle compromises, be they around fee shifting, customer-stay, heightened pleading standards or other contested provisions.
I personally wasn’t happy, for instance, to learn that an expansion of the Covered Business Method (CBM) reviewA covered business method review is an adversarial procedure created by the AIA for challenging patents, similar to an IPR. Like an IPR, the parties argue before an Administrative Patent Judge, not a patent examiner and the challenger must show a reasonable likelihood of successfully invalidating one claim before the PTAB will agree to grant a petition for review. Unlike an IPR, a CBM can program is not in the cards. Currently only available for a limited group of financial services patents, CBM petitions facilitate PTOPatent and Trademark Office, informally used interchangeably with USPTO. reviews that are an important, less costly alternative to litigation. It’s a powerful tool that, if expanded to technology patents, could bring needed expertise to what is otherwise the private, legal hell wrought by trolls on many honest business people and electronics customers. But we all need to accept the give and take process that will get us to a balanced, workable solution.
As Senator Charles Schumer (D-NY) said a few weeks ago, “getting a good bill is better than just getting a bill.” It looks like we’re getting a good bill.
After the home district ribbon cuttings and Easter egg hunts of this current recess, Senators of both parties should jump on this legislation as soon as possible in order to remove the enormous drag on economic growth caused by unchecked patent trolls run amok.
