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Senators Renew Bipartisan Assault on Patent Trolls

All smiles Wednesday as Cornyn and Schumer announced a bipartisan deal on a patent overhaul. (Bill Clark/CQ Roll Call)
All smiles Wednesday as Cornyn and Schumer announced a bipartisan deal on a patent overhaul. (Bill Clark/CQ Roll Call)

Updated 3:49 p.m. | Patent trolls beware: This time it’s different.  

Last year, bipartisan legislation designed to combat what supporters view as abuse of patent claims got stuck in a Senate bottleneck, with then-Judiciary Chairman Patrick J. Leahy of Vermont telling the Burlington Free Press he was “furious” with his fellow Democrat, then-Majority Leader Harry Reid of Nevada, over keeping the bill off the floor.  

Knowing Reid would no longer control the floor schedule in 2015, staff for Majority Whip John Cornyn, R-Texas, and Reid heir apparent Charles E. Schumer, D-N.Y., went back to work on assembling a new bill, working to again build support among members of the Judiciary Committee.  

“This is as close as you get to legislative shock and awe,” Cornyn said, looking around at the bipartisan mix of Judiciary Committee members assembled at a news conference to unveil the deal Wednesday afternoon.  

“I had a hard time explaining when the White House is for something, the president’s for patent reform, when Republicans are for something, when Democrats are for something, we still can’t get it done,” Cornyn said. “I think this is the beginning of a new opportunity for us to show that we can work together in the best interests of the American people … which will improve the quality of their lives.”  

In early February, the two senators, who are key members of the leadership in their respective parties, held a meeting in Cornyn’s hideaway to lay out their priorities and reach an agreement to build support of committee and chamber leadership, according to a person familiar with development of the bill.  

Cornyn and Schumer managed to get both Leahy, now the ranking Democrat on the Judiciary panel, and new Chairman Charles E. Grassley, R-Iowa, on board, along with a lengthy list of panel members.  

Asked what’s different in 2015, Grassley didn’t hesitate.  

“Last year it was stalled by a significant person running the United States Senate. … I don’t think there’ll be that stall this time,” he said.  

Reid wasn’t the only problem, and the new bill has been revised.  

Leahy highlighted that the last patent overhaul to become law, which came when he was chairman of the committee, took several years and in fact more than one administration to be developed. That bill ultimately became law as the America Invents Act in 2011.  

Patent law is an issue where the divide is not partisan, and President Barack Obama has called for getting an overhaul to his desk, including in the 2014 State of the Union address.  

Schumer hopes to see action before the August recess.  

“Patent trolls are taking a system meant to drive innovation and instead using it to stifle job-creating businesses around the country. Main Street stores, tech startups and more are being smothered by the abuse that is all too common in our patent system, and it’s time for that to end,” Schumer said in a statement. “This bipartisan bill shifts the legal burden back onto those who would abuse the patent system in order to make a quick buck at the expense of businesses that are playing by the rules.”  

A person familiar with the bill said that among the provisions is a requirement that courts impose a stay on discovery while working through some motions early in the legal process, a move designed to reduce legal costs. Another provision is designed to curb frivolous lawsuits in the patent space by providing for the award of attorney’s fees in cases that are deemed unreasonable.  

While the bill seems to be in the Senate’s high-speed lane, support is far from universal. Sen. Chris Coons, D-Del., is seeking to build up support for an alternative, more narrowly tailored approach.  

“The reason I introduced the Strong Patents Act was to offer a path forward that deals with the real patent troll problem, which has been described in hearings and in public debate, which is demand letters that are of very low quality and that are essentially extracting settlements from ill-informed and minimally engaged economic players like coffee shop owners and restaurateurs,” Coons told CQ Roll Call. “The challenge of legislating in the patent litigation area is to not do unintended harm.”  

The new legislation from Cornyn, Schumer and their group of senators would address what they view to be unscrupulous demand letters, as well as a variety of other concerns, a source said. But, speaking ahead of the release of that patent legislation deal, Coons said he had fears based on what he had heard that “it may significantly overreach.”  

“I’ve heard from university leaders, venture capital leaders, folks from the bio and pharma communities that they are very concerned that if that bill overreaches by making broad changes to how litigation is done in the patent field that it will harm their ability to innovate, it will harm their ability to defend their inventions, it will harm their ability to grow, to start and grow new companies, and in the end it will harm the innovation community in America,” Coons said.  

But supporters of the bipartisan bill introduced Wednesday are optimistic they’ll prevail.   

“There will be special interests that oppose this. There will be people who don’t see beyond their own little narrow interest who say no,” Schumer said before highlighting the importance to the technology sector, which he called “seed-corn” for job creation.  

“We cannot let it get blown away by such, such preying … on these fine, young startups that want to grow,” Schumer said.  

The 114th: CQ Roll Call’s Guide to the New Congress

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