Senate Judiciary Optimistic About Patent Abuse Bill Negotiations, But No Deal Yet

The Senate Judiciary Committee deferred action Thursday on the Patent Transparency and Improvements Act (S-1720), with Chairman Patrick Leahy, D-Vt., moving to table consideration until next Thursday. The committee had not reached consensus on a manager’s amendment that would constitute a compromise version of the bill, he said. Stakeholders had anticipated Wednesday that the committee would delay consideration of S-1720 in part because, while a deal appeared to be close to completion, negotiations were still ongoing (CD March 27 p13). Senators from both parties said during the committee meeting that they were optimistic they were close to a deal on S-1720, thus far the Senate’s marquee legislation aimed at combating patent abuse.

The committee is still negotiating language on several provisions, which is necessary because “we're not going to have 10 different bills,” Leahy said. “We're going to have one.” Leahy said those provisions include a fee-shifting provision that would transfer responsibility for attorney fees to the losing party in a patent case, which ranking member Chuck Grassley, R-Iowa, Sen. John Cornyn, R-Texas, and other committee Republicans have long championed. Leahy said he agreed some “reasonable” fee-shifting language needed to be included in S-1720. Stakeholders have previously told us that the committee is trying to write fee-shifting language that will “bridge” a gap between proponents of presumptive fee-shifting to the losing party in a patent case and fee-shifting that’s conditional on a judge making a finding.

Leahy said he’s also working with Sen. Orrin Hatch, R-Utah, on language to allow easier award recovery against shell companies that patent assertion entities could use to avoid paying a court award. The committee is also negotiating language on other provisions altering court rulings in patent cases, which were included in the House-passed Innovation Act (HR-3309), stakeholders previously told us.

Grassley said the committee is “making progress” in its negotiations and said he’s “willing to work on compromise language, but I'm also not willing to accept language that is so weak that it won’t put a stop to patent trolling. We need strong language that will be effective in deterring these deceptive and harmful practices.” An effective patent revamp bill must have “a strong litigation reform package” that includes fee-shifting, heightened pleading and discovery standards, as well as language for easier award recovery against shell companies, Hatch said. The committee is “not at the finish line yet, but I think we're close,” Cornyn said. Cornyn has taken a hard line on including fee-shifting and other litigation revamp measures in S-1720, but said Thursday “I think this could get done if we keep our nose to the grindstone."

Sen. Dianne Feinstein, D-Calif., said she believes Congress needs to effectively curb patent litigation abuse, but said she’s “a bit between sixes and sevens” on the right language for S-1720 because “we've got to look carefully and not kill the incentives” for patent innovation. The Senate shouldn’t pass a patent revamp bill “just to say ‘we passed patent reform’ if it’s not going to change the system,” said Sen. Chuck Schumer, D-N.Y. “I will be speaking out clearly about that if it happens. But at the same time, we have to have a bill that will get a majority support in this body and there are lots of different interests.” Senate Judiciary “has to do something and do something real” to address patent litigation abuse, said Sen. Amy Klobuchar, D-Minn. “My only hope for this group is that despite our differences, which reflect the differences of the businesses in our states, that we come together and actually get something done here because we can’t wait another year.”