Patent Overhaul Lobbyists Battle It Out

Posted March 16, 2015 at 2:02pm

As lobbying coalitions go, United for Patent Reform looks fierce as it wades into what’s expected to be one of 2015’s highest-profile lobbying duels in Congress.

Formed earlier this year to advocate for legislation that would make it tougher, and riskier to sue companies for infringing on a patent, United for Patent Reform includes a diverse array of firms and trade groups. Some are technology firms that own a lot of patents, such as Google, Facebook and Cisco.

Others are companies that mostly use technology to promote or run their businesses, such as Macy’s, the American Hotel and Lodging Association and the Newspaper Association of America.

It’s obvious why the patent holders would want more protections, but it’s the other firms that give the coalition heft. They say they’re being sued for actions as commonplace as using store locators on their websites and for transmitting Web links in text messages.

But the reason Rep. Robert W. Goodlatte’s bill to rein in the suits stalled in the last Congress and will be difficult to pass again this year is that the opposition to his legislation is also full of high-powered advocates. They range from pharmaceutical and biotech companies, to venture capitalists and tech startups that say patents are the key to American innovation and deserve every possible protection.

When Democrats Richard J. Durbin of Illinois, Chris Coons of Delaware and Mazie K. Hirono of Hawaii introduced a bill to rival Goodlatte’s this month, they took pains to outline the support it commands, releasing statements from the Biotechnology Industry Organization, the Pharmaceutical Research and Manufacturers of America, the Medical Device Manufacturers Association and the Innovation Alliance, a coalition that includes investment firm Cantor Fitzgerald and semi-conductor maker Qualcomm.

The Democrats’ bill focuses on improving patent quality as a way of reducing litigation, instead of giving defendants new rights in court.

Meanwhile, 145 university presidents, including those at Yale, Notre Dame and the University of Oklahoma, sent a letter to the chairmen and ranking Democrats on the House and Senate Judiciary committees, arguing Goodlatte’s bill, which would force plaintiffs to pay defendants’ attorney fees when they bring suits a judge finds frivolous, goes too far. The Goodlatte bill “goes well beyond what is needed to address the bad actions of a small number of patent holders, and would instead make it more difficult and expensive for patent holders to defend their rights in good faith,” they wrote.

United for Patent Reform holds the upper hand nonetheless. In 2013, the House voted 325-91 for a bill similar to Goodlatte’s, with a solid majority of Republicans and Democrats in favor. Goodlatte has allied this year with Democratic co-sponsors including Jerrold Nadler of New York and two Californians with high-tech bona fides, Zoe Lofgren and Anna G. Eshoo.

Matt Levy, patent counsel at the Computer and Communications Industry Association, which supports Goodlatte’s bill, said a compromise was close last year in the Senate before then-Majority Leader Harry Reid of Nevada pulled the plug.

Levy added that the lobbying coalition this year is more organized and committed to sticking to specific requests: that Congress require plaintiffs who bring bad cases to pick up defendants’ costs, pay for out-sized requests for documents during the discovery process and to first sue technology manufacturers before they can sue companies merely using disputed technology.

Goodlatte and his colleagues are aware they’ll only achieve victory if they can convince colleagues that their side has the most support behind it. The battle lines are already being drawn.

At a House Judiciary subcommittee hearing last month, Republican J. Randy Forbes, a Goodlatte ally, tried to make the case that a witness, Robert P. Taylor, a counsel at the National Venture Capital Association, had not sufficiently polled his 400 members before coming out against the Goodlatte bill.

“It would not be fair to conclude that your position today represents the position of those 400 members,” Forbes said, noting several venture capital association members, such as Google and Cisco, support the Goodlatte bill.

“The position we’ve tried to develop represents the center of gravity of that organization,” Taylor responded. He added later he felt confident he was accurately representing his group’s position.