Leahy walks tightrope on Senate patent bill

Lauren Schneiderman

Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) is hoping to advance a complex patent reform bill when the Senate returns from its two-week recess, but will have to balance the competing interests of Republicans and Democrats to get his bill across the finish line.

Before leaving, senators reached an agreement on a possible way forward on the bill, one that involves a compromise between the parties to put limits on patent litigation. But it remains to be seen whether that compromise can be supported by enough members of both parties and Senate leaders, and also be seen as acceptable by House Republican leaders.

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Observers say Leahy is facing pressure from both sides. House Republicans — who passed a bipartisan patent reform bill late last year — want to put serious limits on patent litigation, which the GOP says is a needed change that would help foster technical innovation.

Senate Democrats with ties to trial lawyers worry about sweeping overhauls to the patent litigation system, and fear that overly broad language could close the courtroom doors to inventors looking to protect their intellectual property.

"The path forward is unclear," one patent lobbyist said, adding that Leahy "is in a tough place."

Late last year, Leahy introduced a basic patent reform bill, one that aims to curb "patent trolls," or the companies that profit by bringing and threatening to bring patent infringement lawsuits.

But he committed to using the committee process to consider members' more complex and often contentious proposals. One key issue to be resolved involves "fee shifting," which would require the losing party in a meritless patent infringement lawsuit pay the winner's legal fees.

Leahy and Sen. Charles Schumer (D-N.Y.) worked on a compromise on fee shifting between the left and the right. Schumer has worked with Sen. John Cornyn (R-Texas) on an idea that is expected to be included in Leahy's bill.

That compromise would require judges to shift fees to the loser in an infringement suit if that party did not behave in an "objectively reasonable fashion." It's less of a fee shift than the House-passed bill, which would make "loser pays" a default position for courts to take.

One immediate question is whether this proposal can win the support of Senate Democrats. Trial attorneys, who oppose fee-shifting, are "huge supporters of the Democratic party," and Senate Democrats aren't eager to upset them, according to one lobbyist.

"If it passes out of committee with something that makes the majority of Democrats mad, then [Senate Majority Leader Harry Reid (D-Nev.)] is not going to be likely to bring it to the floor," he said.

But if a majority of Judiciary Democrats back the bill, it has "at least a good chance of getting to the floor," the lobbyist said.

Sen. Richard Blumenthal (D-Conn.), who participated in the negotiations over the bill, said he thinks the current compromise can win over many of the skeptical Democrats.

"As the process has gone along, I have expressed serious concerns about some of the previous iterations of the legislation," he said in a statement to The Hill. "I am happy to say that my most serious concerns have now been addressed, and I think that means we are close to a bill that I can support and that can win the support of a broad cross-section of Senate Democrats."

But the next question is whether the Senate compromise can pass muster in the House. The lobbyist said the House is "100 percent dug in on their fee-shifting."

Appearing on C-SPAN's "Newsmakers" this week, Goodlatte warned against a Senate bill with weak litigation reforms.

“We are not interested in taking something up that is weak and does not address the problems that we have in this country," he said. Goodlatte added that he has expressed the House position with the Senate.

A Judiciary aide said Leahy is coordinating with Goodlatte and is "working with the goal of getting this to the full Senate" once it passes his committee.

During a committee meeting late last month, Leahy said he is "committed to crafting these provisions thoughtfully to achieve an effective solution that can pass this year."

Cornyn told The Hill this week that he is "actually somewhat optimistic that we will have a positive result" when the committee considers the bill after recess.

"We've been talking to the White House, we've been talking to Democrats trying to resolve some remaining issues … and I think we're getting very close," he said. "This is one of the areas where there's actually bipartisan desire to get a result."

The patent lobbyist called Leahy “a seasoned legislator” who may be able to produce a patent reform package that gets enough support from both sides of the aisle.

“These are senators. What they do is cut deals,” the lobbyist said.