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Concerns in Senate and approaching election could stymie patent litigation reform moves

The window of opportunity for the passing of a federal patent litigation reform law in the US is slowly beginning to close and could soon be shut tight, according to sources that IAM has spoken to over the last few days. The head of steam for change that culminated in the House of Representatives’ overwhelming, bipartisan approval of the Goodlatte Innovation Act has now begun to dissipate in the face of growing concerns among some senators that there is not enough evidence to justify wide-ranging reforms and that the potential for unintended harms has not been properly explored.  

What’s more, in what is an election year, plans for much wider application of loser pays are beginning to cause significant concerns among Democrat lawmakers, who have traditionally raised significant amounts of campaign money from trial lawyers, a constituency that is overwhelmingly opposed to the move. If the legislation is not agreed during the 113th Congress, the whole process will have to start from scratch during the 114th Congress, which begins sitting in January 2015.

Over the last week, IAM has had a number of conversations with very well-informed individuals about where things stand. While not everyone agrees that getting a new law before the mid-term elections is out of the question, there is a widespread recognition that the clock is ticking. All seats in the House of Representatives are up for grabs on 4th November, as well as 33 of the 100 Senate seats. At some stage pretty soon, that is going to become everyone’s primary focus on Capitol Hill.

A number of bills proposing reforms to the way in which patents are litigated in the US have been submitted to both houses of Congress since the current session began in January 2013. Almost all of them have been framed as attempts to combat “patent trolls”. Backed by extensive lobbying efforts from a number of big companies, citing a number of “studies” claiming that “trolls” cost the US economy billions of dollars each year, supported by the Obama administration and featured heavily in mainstream and business media, the Goodlatte Act emerged as the favoured option and was passed by the House of Representatives by a 325 to 91 margin in December 2013.

The Senate is now considering the Patent Transparency and Improvements Act, proposed by Patrick Leahy, chair of the Judiciary Committee. Although similar to the Goodlatte Act in many respects, there are also significant differences; so, should it be approved by senators there would have to be a reconciliation process before a final law could be passed and sent to President Obama to sign.

All this will take time and with those elections approaching, and opponents of the current proposals – including media-friendly sectors such as universities and lone inventors - now getting their own lobbying act together, time may not be a commodity that those advocating reform have much of. If moves for change fail, everything will have to start again in 2015. This would essentially be a repetition of how things panned out with the America Invents Act, which took six years to get onto the statute books and was a very different law to the one that was originally proposed.

While it is not impossible that the legislative pace may speed up again in Congress, what may be more likely over the short to medium term are piecemeal changes to aspects of the American patent litigation system via the courts and, to some extent, at state level. That would not be ideal, but everyone who believes that there are significant dangers posed by what is currently on the table in Congress will welcome a pause that might allow wiser, more disinterested counsel to prevail.

Joff Wild
IAM Magazine
23 February 2014

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IP politics, IP litigation, Patents

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