Goodlatte’s patent bill advances

The House Judiciary Committee voted late Wednesday to advance an amended version of a patent reform bill authored by Chairman Bob Goodlatte (R-Va.).

Goodlatte’s Innovation Act aims to cut down on abusive patent lawsuits requiring companies bringing those lawsuits to be more transparent about their financial backing and limiting the burdens they could impose on the companies being sued.

After multiple amendments, the committee voted the bill favorably to the House floor with no Republican opponents and five Democrats voting against it.

The updated Innovation Act includes a last-minute amendment from Rep. Hakeem Jeffries (D-N.Y) that gives courts more clarity when determining when to require the losing party of a lawsuit to pay the winning party’s legal fees.

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As an attempt to deter frivolous patent infringement lawsuits, Goodlatte’s bill would require losing parties to pay the winning parties’ legal fees except in special circumstances.

Throughout the daylong markup, Democrats repeatedly pushed for amendments that would give courts more discretion in that area.

Early in the day, the committee rejected an attempt by high-ranking Democrats to substitute Goodlatte’s amended bill with a bill of their own that they said would preserve courts’ authority.

The ultimately successful amendment offered by Jeffries saw bipartisan support; ranking member John Conyers Jr. (D-Mich.) and Rep. Hank Johnson (D-Ga.) were the two committee members to vote against it.

Many Democrats said voting for Jeffries’s amendment was an attempt to make the Innovation Act more palatable.

The amendment makes the bill “mildly less bad,” according to Rep. Jerrold Nadler (D-N.Y.), who ultimately voted for both the amendment and the amended bill.

The version of the bill advanced Wednesday also includes an amendment from Rep. Darrell Issa (R-Calif.) that directs the Government Accountability Office to study “covered business method patents.”

Currently, companies being sued for patent infringement could ask the Patent Office the review the validity of that patent if it’s a “covered business method patent” that relates to a financial service or product. Patent reform advocates have lobbied on Goodlatte both in favor of and against expanding that additional review process to software patents.

When first introduced, the Innovation Act included a provision that would codify the Patent Office’s current practices, which includes extending that additional review process to certain software patents. Goodlatte offered an amendment for Wednesday’s markup that removed that provision.

The updated Innovation Act also addresses demand letters, or the letters that so-called patent trolls send — often to small businesses or individual consumers using allegedly patented technology — threatening lawsuits in the hopes that recipients would agree to pay licensing fees rather than go to court.

An amendment from Rep. Jason Chaffetz (R-Utah) requires patent trolls to be more specific about their infringement accusations in the demand letters. Small businesses that receive these demand letters don’t have the legal teams to discern how valid the claims are, he said.

On the issue of demand letters, the bill also incorporates an amendment from Rep. Tom Marino (R-Pa.) that directs the Patent Office to study how demand letters are used.

In a unanimous voice vote, the committee incorporated an amendment from Rep. Cedric Richmond (D-La.) that directs the Patent Office to devote “special consideration to the unique needs to small firms” that are run by minorities, women and disabled veterans.