House Judiciary members call for caution on patent reform

The House Judiciary Committee needs to move forward cautiously with patent reform and consider the unintended consequences of changes to the patent system, Committee members said Tuesday. 

The Committee met Tuesday for a hearing on the Innovation Act, the patent reform bill recently introduced by Chairman Bob Goodlatte (R-Va.). 

Goodlatte’s bill aims to cut down on frivolous lawsuits by “patent trolls” — companies that use their often broad and vague patents to threaten businesses with infringement lawsuits in the hopes that they’ll settle — by creating transparency and accountability measures in the patent litigation system.

Mel Watt (D-N.C.) questioned the need to move quickly and the actual size of the “patent troll” problem. Watt is the ranking member of the House Judiciary Committee’s Subcommittee on Intellectual Property.

“We run the risk of enacting measures that could not only be ineffective but could exacerbate the current problem or invite new, unintended problems” if the Committee moves to quickly, Watt said in his prepared opening statement.

“The problem we confront with the so-called ‘patent trolls,’ while real, is not, in my opinion, nearly as enormous as it has been portrayed, nor is it  as urgent,” Watt said, citing a study from the Government Accountability Office that indicated patent trolls only bring a portion of overall infringement lawsuits.

Watt also criticized Goodlatte for his failure to adequately consider the real world implications of the proposals in his Innovation Act, calling the lack “of developing and testing these legislative proposals … insular and disappointing.”

Watt questioned one witness — Kevin Kramer, Yahoo deputy general counsel for intellectual property — about the need for Congress, rather than the courts and agencies dedicated to maintaining the patent system, should get involved.

When Kramer said he thought Congressional involvement was needed to fix patent litigation, Watt replied that Kramer has “a lot more confidence in us than I think the public has in us.”

Rep. Hank Johnson (D-Ga.) wondered whether Goodlatte’s bill would unintentionally harm litigation firms that represent the small interests of patent-holding small businesses who do not have the legal teams to bring infringement claims themselves.

Litigation firms acting on behalf of small businesses holding valid patents could be affected by broad reforms to the patent litigation system, he said. “I don’t want us to go far in closing the courthouse door on the good faith litigants.”

Rep. Doug Collins (R-Ga.) expressed concerns that Goodlatte’s bill would make permanent and expand a relative new patent review process. 

Under a temporary provision in the America Invents Act of 2011, companies being sued for patent infringement can challenge the validity of the patent at the U.S. Patent and Trademark Office if it’s a business method related to financial services. Goodlatte’s bill makes that provision permanent and codifies the Patent Office’s current interpretation of what kinds of patents are eligible for that review process.

Former Patent Office Director David Kappos agreed with Collins that Congress should not enshrine a system that new, as it is “just getting on its feet.”

“I would tend to leave the [patent review process] as it is, given how much in flux and how early in implementation it is,” Kappos said.