By Julian Hattem and Mario Trujillo - 03/03/15 08:26 AM EST
A trio of Senate Democrats are unveiling new legislation that they say will protect inventors who come up with smart new ideas.
The STRONG Patents Act from Sens. Dick DurbinDick DurbinDems gain upper hand on budget McConnell: Senate could drop flood money from spending bill Funding bill rejected as shutdown nears MORE (D-Ill.), Chris CoonsChris CoonsElection-year politics: Senate Dems shun GOP vulnerables Overnight Healthcare: McConnell unveils new Zika package | Manchin defends daughter on EpiPens | Bill includes M for opioid crisis Dems to GOP: Help us fix ObamaCare MORE (D-Del.) and Mazie HironoMazie HironoOvernight Finance: Lawmakers float criminal charges for Wells Fargo chief | Scrutiny on Trump's Cuba dealings | Ryan warns of recession if no tax reform Anti-trade senators say chamber would be crazy to pass TPP Overnight Finance: McConnell offers 'clean' funding bill | Dems pan proposal | Flint aid, internet measure not included | More heat for Wells Fargo | New concerns on investor visas MORE (D-Hawaii) eschews a sweeping approach to combating patent “trolls” and instead opts for more targeted reforms that its authors say would help every sector of the economy.
The legislation appears markedly different from some of the other major patent reform proposals that have advocated for more sweeping changes to limit the power of the “trolls” who own patent licenses but don’t actually produce anything. Critics say the trolls bog down the economy by filing vague and costly lawsuits accusing other companies of infringing on their patent rights.
The Democrats’ bill would give the Federal Trade Commission more power to target companies that send out vague or abusive demand letters, in which a patent holder claims infringement and demands payment.
The bill would also heighten pleading standards in patent cases by eliminating a form that only required vague information when filing a patent complaint. The form is already scheduled for deletion at the end of the year.
Additionally, the legislation would attempt to add “balance” to the U.S Patent and Trademark Office’s post-grant review process, which can be used as an alternative to litigation to challenge whether a patent is valid. Coons argues the current process can be abused to depress a company’s stock “and extort settlements.”
“It’s time to move past the false premise that the only way to deter ‘patent troll’ abuses is to enact sweeping reforms that weaken patent protections for everyone,” Durbin said.
“Rather than fundamentally rewrite those laws — for the second time in five years — at the request of a few industries, we should instead seek to narrowly target and deter abusive troll behavior while preserving the ability of legitimate patent holders to protect their innovations.”
A more sweeping patent reform bill passed through the House in late 2013, but the legislation hit a roadblock in the Senate last year. The issue has emerged as a top candidate to cut across partisan divide and reach the president’s desk this year.
The Biotechnology Industry Organization and the Association of American Universities endorsed the legislation. But industries ranging from the technology sector to retailers have called for more sweeping changes.
A preamble to Coons's legislation warns that making wider reforms to the patent system without further review could “create a serious risk of making it more costly and difficult” for inventors to protect their legitimate patents.
“Thereby weakening United States companies and the United States economy,” according to the legislation, which is an indirect shot at House Judiciary Committee Chairman Bob Goodlatte’s (R-Va.) recent proposal, which garners wide support.
Coons's legislation is largely silent on fee shifting, a change in which the losing party is forced to pay the winner’s legal fees if the lawsuit is found to be frivolous. The reform is a major part of alternate patent reform, but Democrats and trial lawyers have been skeptical of the change.
Coons’s legislation asserts that a number of Supreme Court cases have largely addressed the issue, by opening up fee shifting to more cases.
— Updated at 10:35 a.m.