Congress gets out club for patent ‘trolls’

Proponents of a bill to prevent patent “trolls” from harassing businesses are increasingly optimistic their legislation will become law this year.

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Lawmakers and a wide swath of different industries have aligned behind the push for a crackdown on the so-called trolls, which sue companies for patent license violations.

Supporters of the reform effort claim the lawsuits are often frivolous, but nonetheless force businesses into settlements to avoid lengthy and costly court cases. Plaintiffs in the suits argue they are merely trying to protect their intellectual property and preserve inventors’ ability to innovate.

With campaign politics gumming up the works on Capitol Hill, the patent crackdown could be one of the few bills to make it to President Obama’s desk before November, supporters say.

“I think that members on both sides of the aisle recognize that this is a big problem affecting people being employed in their district, investments in their district,” said Beth Provenzano, a senior director for government relations at the National Retail Federation.

“I think that this does stand a good chance, even in the election year.”

The Senate Judiciary Committee, the focus of the patent reform fight, will look to take action on legislation this month, Chairman Patrick Leahy (D-Vt.) said on Tuesday. Sen. Mike Lee (R-Utah) on Wednesday said he hoped the full chamber would vote on the bill in the coming months.

In addition to the retailers trade group, associations for restaurants, financial institutions and major tech companies such as Google have pushed for the chamber to approve legislation. The troublesome lawsuits can cost millions, they say, and need to be stopped immediately.

Patent-rights holders skeptical of reform claim that bill goes too far and warn it could make it difficult for inventors and universities to profit from their creations.

In December, the House overwhelmingly passed the Innovation Act, which would reform much of the patent lawsuit process. Lee and Leahy are pushing a companion bill, the Patent Transparency and Improvements Act, in the Senate.

Obama backed the House bill and called for action in his State of the Union address. Supporters hope the president’s backing will help push legislation across the finish line in the Senate.

“It meant a lot in the Senate to have the president weigh in like that,” Lee said at an event Tuesday in Washington. “To have it brought up by the president in some very public settings has been very helpful to help focus the public attention on the fact that this is hurting a lot of people.”

Obama’s support also created momentum in the House, and convinced Democratic lawmakers who might not have been focused on the issue to hop on board, according to Rep. Jared Polis (D-Colo.).

“When it comes to a patent bill, they say ‘Oh OK, the president liked it so we’re going to give it a look,’ ” he said at the event, which was sponsored by Politico. “So that sort of opened the door for a lot of members on the Democratic side, where we had stronger vote totals than we were necessarily expecting.”

But the patent reform bill from Leahy and Lee isn’t the only one up for consideration in the Senate.

Sen. Claire McCaskill (D-Mo.) last week introduced a bill that would empower the Federal Trade Commission (FTC) to write rules on what patent-holders have to say in the letters they send to claim that a business is infringing on their patents. Business groups have said that the notices, called demand letters, are often vague and make it more difficult to fight the cases.

That bill is scheduled to be considered in the Senate Commerce Committee next week, but it could run into opposition from Republicans on the panel.

“Hopefully we can take it up next week, but I’m continuing to work with Republicans on the committee to make sure that we try to get a bipartisan bill out of there, because to me it’s pretty straightforward and certainly shouldn’t be partisan,” McCaskill told The Hill.

“I think some of the Republicans are worried about expanding jurisdiction of the FTC,” she added.

Sen. John Cornyn (Texas), the chamber’s No. 2 Republican, has introduced legislation that would require some plaintiffs to pay for the defendants’ court fees if a lawsuit fails.

Another effort from Sen. Charles Schumer (D-N.Y.) would expand the protections for software patents by widening a transitional program created by the 2011 America Invents Act. The bill passed by the House last year originally contained a similar provision, but House Judiciary Committee Chairman Bob Goodlatte (R-Va.) pulled the measure amid heavy lobbying from opponents, including software giants like Microsoft and Apple.

The Judiciary Committee has held a series of staff briefings in recent weeks to try to hammer out disagreements over the bill.

Those discussions, which a spokeswoman said provided a ”very useful forum to educate staff and flesh out issues,” will likely help define the shape of the bill’s final form.

— This story was first posted at 10:26 a.m. and has been updated.