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Republican win in Senate breathes life into patent legislation

By November 5, 2014November 7th, 2014No Comments

Via Reuters

(Reuters) – A Republican takeover of the U.S. Senate has brightened prospects for an effort to fight frivolous patent litigation, although the path to success is far from clear, sources close to the lobbying effort said on Wednesday.

The House of Representatives easily passed a bill in December to cut down on abusive litigation brought by patent assertion entities, or “patent trolls”: companies that buy or license patents, then aggressively pursue licensing fees or file infringement lawsuits.

That legislation, backed by technology companies like Cisco Systems Inc and Google Inc, stalled in the Senate amid opposition from drug companies and, crucially, lack of backing from Democratic Senate Majority Leader Harry Reid.

A centerpiece of the effort was a provision that encouraged judges hearing patent cases to award fees to the winners of infringement lawsuits.

Staffers have already begun work on a patent bill, which is widely expected to get backing from Iowa Senator Charles Grassley, who is in line to chair the Senate Judiciary Committee. Senator Mitch McConnell of Kentucky, expected to replace Reid as majority leader, will likely allow the full Senate to vote on it, said sources familiar with efforts to revive the bill, speaking on condition of anonymity.

Lobbyists supporting patent reform said that, with the shift to McConnell in the majority leader’s office, a reform bill could become law within nine months to a year.

“We have a pretty high probability that there’s going to be action on this,” said David French, a lobbyist for the National Retail Federation. “I honestly have a hard time seeing anything that could stop it.” Some of the group’s members have been sued for infringing on patents on equipment they had purchased.

The bill’s opponents, however, noted the difficulty in getting much at all through the deliberative Senate. “The Republicans still need 60 votes to pass a bill,” said one tech industry insider, who opposes the legislation in its current form and spoke on condition that he not be further identified.

Tech companies and others want changes such as making it easier for judges to require that the loser of an infringement lawsuit pay the winner’s fees, and allowing a manufacturer to step in to defend customers accused of infringement by a patent assertion entity.

Congressional staffers have already begun working on the bills, according to two lobbyists, who spoke privately to protect business relationships.

Last year, the White House urged lawmakers to take steps to curb abusive patent lawsuits, which have skyrocketed in recent years but have finally shown signs of tapering off.

New federal patent lawsuits filed in September, the most recent figures available, were down 40 percent from the previous year, to 329 cases, according to data from Lex Machina, a legal analytics database.

The decline has been linked to a Supreme Court ruling in June that made it easier to quash software patents and the delayed effect of 2011 reforms that gave defendants new tools to fight lawsuits.

(Reporting by Diane Bartz; Editing by Ros Krasny and Jonathan Oatis)

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