Posts Tagged: "Senate"

It is pure nonsense to say that opponents of patent reform never offer specifics, cite or discuss textual language of the bills. Utter fiction and complete fantasy. Frankly, Lee’s claims are as comical and insulting as they seem to be uninformed. Only the most disingenuous partisan could suggest that opponents of patent reform do not offer specific explanations citing to textual language of the bills. Indeed, quite the opposite is true. Opponents of patent reform make far more detailed and nuanced arguments. These intellectual, detailed, nuanced arguments have lead those fighting patent reform to lose the linguistic battle time and time again. So not only is what Lee saying false, but it is 180 degrees opposite from reality. So spurious are Lee’s claims that at first glance the article comes across as a piece of patent satire published by The Onion.

As interesting as the Senate may become when patent reform resurfaces, the dynamic in the House will be fascinating for many reasons. Since patent reform stalled there is a new Speaker of the House, Paul Ryan (R-WI). Speaker Ryan has said he plans to return the House to regular order and allow business to trickle up from members to the full House rather than have legislation forced down from leadership on Members. It is widely known that Goodlatte and Issa continue to want more patent reform and are seeking opportunities to push forward to a vote in the House. Will Speaker Ryan allow the Innovation Act to come to a vote in the House?

The first meeting this week was in Grundy Center, IA, during which a question about patent reform was asked. Grassley answered that he was trying to stop patent trolls, which he described as a person who buys up patents but never intends to build a product, and then sends threatening letters to small businesses demanding thousands of dollars or they will get sued. Notably, he said that it costs our economy $83B per year.

Earlier today the Senate Judiciary Committee held a hearing on the Defend Trade Secrets Act, which is authored by U.S. Senators Chris Coons (D-DE) and Orrin Hatch (R-UT). This is an important issue for Congress because trade secret theft puts American jobs at risk and threatens incentives for continued investment in research and development in the United States. Currently, civil trade secret laws can and do vary state-to-state, and while the differences may not be substantively large it is truly odd that in a global economy the United States has left trade secret law to the States to individually regulate. It is long since time for Congress to act.

”An anecdote is a snapshot, a one-dimensional shard of the big picture. It is lacking in scale, perspective, and data,” authors Steven Levitt and Stephan Dubner write. I was struck by how well the dynamic of anecdote vs. story captures the heated Washington debate over patent legislation we have witnessed in the past few years. The ”patent troll” narrative — fueled by anecdotal tales of mom-and-pop operations snared by fraudulent patent suits and the image of ugly green trolls paraded from the House floor to the White House – became the conventional wisdom on patents almost overnight. The only ”data” offered to support the narrative were compiled from surveys with unscientific methodologies, nonrandomized survey bases and ill-defined notions of a ”troll” that swept in universities, small inventors and anyone who owned a patent but didn’t manufacture, market and distribute the related product.

Fears about trade secret trolls are based in mythology, not on fact. If those claiming federal trade secret legislation would lead to trade secret trolls actually understand trade secret law they simply couldn’t possibly come to a conclusion that there is any risk there will be a single trade secret troll, let alone some kind of zombie-like rise. Simply stated the fear is pure fiction. In addition to seeing absolutely no evidence of trade secret trolls on the State level, trade secrets require a relationship or some nexus between the parties to the dispute. You simply cannot commoditize trade secret litigation in the same way patent trolls can and do commoditize patent litigation.

Most Congressional offices now understand how loser-pay, bonding and joinder stops the flow of capital to innovation startups, how customer stays make defending patent rights impossibly difficult, why eliminating PRG estoppel perpetuates litigation shifting almost all of the costs onto inventors, and how IPR’s and CBM’s unjustly strip property rights and devalue all patents. Rank and file offices seem to be listening. However, key offices are deliberately deaf.

Members of both major American political parties from both the Senate and the House of Representatives came together at a press conference held on the afternoon of Tuesday, July 14th, to oppose the most recent round of proposed patent reform bills in either chamber of Congress. Meanwhile, rumors are swirling that suggest that the Innovation Act (H.R. 9) has been tabled for the rest of the summer in the House of Representatives.

Having to defend their patent in post grant reviews such as an IPR can easily cost patent owners between $700,000 to over $1 million when the subject matter of the patent under challenge relates to the biological or pharmaceutical sciences, due in part to the need to cast a wide net for relevant prior art, according to experienced practitioners like Brad Olson, a partner with Barnes and Thornburg, LLP. Such expenses are particularly threatening to new companies finding the patents that drive their business under attack just as they are desperately trying to raise money for their very survival. Given the track record of IPR’s as “patent death squads” potential investors or licensees can’t be blamed for waiting until the reviews are completed to finalize pending deals.

At the end of a three-hour long hearing held by the U.S. Senate Committee on the Judiciary this Thursday, June 4th, S.1137, the proposed legislation known as the PATENT Act, was approved to move to the floor of the United States Senate by a 16-4 vote of the Senate committee. Proponents of the bill lauded the bipartisan support which brought the bill committee approval. Interestingly, a small but vocal bipartisan minority has developed, a couple of whom have pledged to continue debate aspects of this legislation which they fear will pose a threat to American innovation.

Senators repeatedly brought up the Hatch-Waxman legislation. One after another Senators discussed how inter partes review (IPR) of pharmaceutical patents at the United States Patent and Trademark Office (USPTO) has, in an unanticipated way, upset the delicate balance reached in Hatch-Waxman to ensure that generic drugs would come to market quickly. Those familiar with IPR and Hatch-Waxman will undoubtedly recognize that this concern is entirely misplaced. A successful IPR would result in the immediate death of patent claims, which would inure to the benefit of all generics, which would in fact result in generics entering the market quickly.

Although the latest version of the PATENT Act (S.1137) represents an improvement over previous versions of the legislation, it would still make all U.S. patents less enforceable and cast an ominous cloud over startups and small inventors… The latest version of the PATENT Act notably fails to address the critical overbreadth problems of the customer stay, heightened pleadings, and discovery provisions. Together these provisions place an undue burden on the enforcement rights of legitimate patent owners.

According to Grassley’s office, the amended PATENT Act will provide important reforms for the way that the Patent Trial and Appeals Board (PTAB) of the United States Patent and Trademark Office (USPTO) operates. For instance, the managers amendment would: (1) Require the PTAB to apply the claim construction standard used in federal district court (i.e., the Phillips standard) and further requires the PTAB to consider if claims have previously been construed in district court. (2) Makes explicit that for purposes of PTAB adjudications patents are presumed to be valid, although does so retaining the current law providing that the petitioner has the burden to prove a proposition of unpatentability by a preponderance of the evidence. (3) Makes clear that the Director has discretion not to institute an IPR or PGR if doing so would not serve the interests of justice. (4) Allows patent owners to submit evidence in response to a petition to institute an IPR or PGR, and petitioners to file a reply to respond to new issues. (5) Directs the PTO to modify the institution process so that the same panels do not make institution and merits decisions. (6) Directs the PTO to engage in rulemaking in order to institute a Rule 11-type obligation in IPR and PGR proceedings.

The proposed bill comes as welcome news to large companies like Google and Amazon which have been looking for ways to start developing beyond line-of-sight flight plans and other complex operations. The rules may, however, be less well suited for smaller UAV innovators. As an article published by Motherboard points out, the Booker/Hoeven legislation will require commercial drone operators to register for a license whereas currently allowable commercial drone operations operate in a non-licensed legal grey area. The undisclosed registration fees that would be put in place for licensing is also a cause for concern among small commercial players with limited financial resources.

Another discrepancy is between the stated legislative goals and the actual proposed language. This is perhaps demonstrated in starkest relief in the “customer stay” provision found in both the Innovation Act bill in the House of Representatives and in the PATENT Act bill in the Senate. It ostensibly would exist to protect downstream customers of a patent infringer, such as a small coffee shop offering Wi-Fi service using a device that unbeknownst to the coffee shop infringes a patent. But while the Senate Judiciary Committee’s summary of the PATENT Act says that the “customer stay is available only to those at the end of the supply chain,” like the coffee shop, the language found in the bill is actually far broader in scope.