Innovation Act Likely to Pass House, Patent Stakeholders Say

The House Rules Committee voted Tuesday to move forward eight of 26 submitted amendments to the Innovation Act (HR-3309) for full House consideration, in a bid to streamline consideration of the bill. Proponents say the measure would address abusive patent litigation. The cleared amendments included a bill manager’s amendment from House Judiciary Committee Chairman Bob Goodlatte, R-Va., which would make technical changes to the wording of the bill passed out of House Judiciary last month (CD Nov 22 p13). House Rules also cleared a “Democratic substitute” version of HR-3309, contained in an amendment by House Judiciary ranking member John Conyers, D-Mich., and Intellectual Property Subcommittee ranking member Mel Watt, D-N.C. Industry stakeholders told us they believe HR-3309 has a very good chance of passing the House, though the level of support it might receive from each party remained unclear Wednesday.

HR-3309’s prospects “look pretty good,” said Julie Samuels, an Electronic Frontier Foundation staff attorney who has focused on patent issues. “I hate to count any chickens before they hatch, but it looks likely that we're going to get something out of the House. There seems to be pretty widespread support in favor of this bill.” House Judiciary’s 33-5 vote in favor of HR-3309 after markup “is a really telling number” that provides more insight for the bill’s future prospects than does the markup debate itself, Samuels said. “I think we'll see similar numbers in the full House.” BSA/The Software Alliance Director of Government Relations Tim Molino said he anticipates “a strong vote in favor of the bill."

Innovation Alliance Executive Director Brian Pomper said he expects HR-3309 to pass the House because of support from the White House and House leadership, though his group opposes the bill in its current form and is urging members to vote against it. “This is one of those votes when members are looking for cues -- traffic signals -- from other people,” he said. “A lot of members may just go with their leadership and Goodlatte because they trust them and will go with them in the absence of knowing anything more.” Many rank-and-file members’ “heads are spinning because this is really complicated stuff, pretty brand-new ideas and approaches to dealing with this stuff and the bill has been moving pretty quick,” Pomper said. Many “of them didn’t know even a week ago that this was coming to the floor. It’s got to be very difficult for rank and file members to figure out what they're going to do on this bill.”

House leadership in both parties supports HR-3309, and “as far as I know the prospects are quite good,” said an industry source familiar with Hill negotiations on the bill. “But we're still whipping, we're still counting, we're not taking any votes for granted.” There are undecided members in both parties, a House aide familiar with the debate over the legislation told us. The White House’s decision to support the bill via a statement to House Rules (CD Dec 4 p8) may be particularly helpful in influencing House Democrats, likely “pulling over some of those on the fence,” the industry source said. Democratic support was “clearly strong” in the final House Judiciary vote, with 12 committee Democrats joining the unanimous Republicans in favor of the bill, Molino said. House Minority Whip Steny Hoyer, D-Md., declared his support for the bill Tuesday, showing “there’s a lot of momentum even on the Democratic side for moving this thing forward,” Molino said.

A few House Republicans have concerns about HR-3309, most notably Thomas Massie, R-Ky., and Dana Rohrabacher, R-Calif., who each sponsored amendments going to the floor that would remove whole portions of the bill. Massie’s amendment would remove HR-3309’s provision allowing a court to stay a patent lawsuit against a product’s end-users if the product’s manufacturer intervenes, while Rohrabacher’s amendment would eliminate the provision that would remove a section of U.S. patent law that allows patent applicants to appeal U.S. Patent and Trademark Office decisions to a U.S. district court. Conservative groups have split on HR-3309. Americans for Prosperity, Americans for Tax Reform and six other groups declared their support for the bill Wednesday in a joint letter to the House. A separate coalition of 10 conservative groups, including the American Conservative Union and the Club for Growth, opposed the bill Tuesday.

The Democratic substitute amendment, the Massie and Rohrabacher amendments and several others cleared for consideration on the House floor “would be damaging to the final bill,” Molino said. “Most of them would make substantial changes to the bill that would undermine its purpose.” But he said he didn’t have any “strong concerns” that the damaging amendments -- and particularly the Democratic substitute -- had a chance of passing a full House vote. The amendments overall would “make the bill more palatable, but none will simultaneously make it more acceptable to those with concerns and solve problems that continue to exist,” Pomper said. “There’s no panacea here."

The other four amendments that will get full House consideration include two from Rep. Sheila Jackson Lee, D-Texas. One would expand the scope of the lawsuit stay provision to include small businesses that make less than $25 million in annual revenue. The other would require PTO to conduct a study into the effects that patent law changes caused by HR-3309 would have on “the ability of individuals and small businesses owned by women, veterans, and minorities” to assert their patents. An amendment from Rep. Jared Polis, D-Colo., would require the senders of a demand letter or other pre-litigation notifications to include additional disclosure information. An amendment from Watt would modify HR-3309’s fee-shifting provision to allow judges to consider the “abusive tactics” of the prevailing party in a patent lawsuit in any decision about whether to reduce or deny a fee award.

The outcome of Thursday’s House vote will likely affect how the Senate proceeds on the Patent Transparency and Improvements Act (S-1720), Samuels said. “The Senate does not operate in a vacuum or a bubble,” she said. If the House passes HR-3309 “by a really wide margin, the Senate will notice that -- and hopefully that will push things forward there.”