PublishedMay 21, 2014

Senate Judiciary Chairman Pulls Patent Reform Bill

Washington – Senate Judiciary Chairman Patrick Leahy announced today that he was taking the patent reform bill off the committee’s agenda. The move was a massive setback to the nationwide chorus of calls for reform after patent trolls expanded their targets in recent years to companies across a wide range of industries. Oddly, Leahy cited a lack of agreement between stakeholders, which include patent trolls and their targets, as his reason for removing the bill from the agenda.


Patent trolls drain billions of dollars from the economy every year by exploiting our complex patent system to extort money from thousands of legitimate US companies. Patent trolls succeed because their business is lawsuits, rather than actually producing products. It costs them little to file infringement claims and it’s very costly, often $2-5 million on average, to defend against a patent suit. Most companies just pay the trolls; the trolls then use the money to expand their litigation efforts.


Senators had reached a bipartisan agreement on patent reform that would have gone a long way to curbing the patent troll problem without impinging on patent owners’ rights. Proponents of reform compromised extensively to reach that deal, including giving up the expansion of the Covered Business Method Review (CBM) program, even though making CBM more widely available could have helped to greatly improve patent quality.


Six months ago, the House of Representatives overwhelmingly passed bipartisan patent reform legislation that found a healthy balance between curbing abuses and limiting any negative consequences to honest defense of valid patents.


The Computer & Communications Industry Association has been advocating real patent reform for more than a decade and will continue to fight for it. The following can be attributed to CCIA President & CEO Ed Black:


“We are greatly disappointed to see patent reform removed from the Senate’s agenda. Patent trolls no doubt celebrated the lunchtime announcement that they could continue to misuse U.S. patent law to feast on U.S. companies in all sectors and sizes.


“The Obama Administration has said patent trolls cost companies $89 billion a year. With the kind of money they’re raking in, can policymakers really expect to get patent trolls to agree to legislation that curbs the use of some of the tools they are using to unfairly file nuisance lawsuits to collect those kind of fees? Senate leaders are now saying legislation cannot proceed without agreement among all patent holders, including those trying to block it. This a sign the legislation might be effective – not a reason to stop trying to pass it.


“The stakeholders with the most to gain and lose, patent trolls and their targets, reach agreements every day. The patent trolls demand money based on frivolous claims and the targets pay up rather than face an even more expensive court battle. There is already compromise and it’s working for the trolls just fine, but it is completely unfair to the companies targeted. Today American businesses learned relief is not on the way, and they are on their own against the trolls as they await an announcement that the trolls have comprised and will no longer block patent reform.


“It’s clear to all those targeted by trolls they need a rescue effort led by statesmen and women in Congress – not yet another delay that blames stakeholders and hands patent trolls a default victory.”

For more background, please see Matt Levy’s post in “Patent Progress.”


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