Patent reform clears key hurdle in the Senate

The Senate Judiciary Committee on Thursday sent a bill to the floor that aims to crack down on so-called patent trolls.

The committee voted to advance the bill 16-4, clearing a hurdle that proved impassable in the last Congress when senators clashed over the details of the legislation.

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A number of senators backed the new bill with the qualification that it is not finished, and many promised to push for amendments on the Senate floor. Other members like Sen. Ted CruzTed CruzTHE MEMO: Trump takes the fight to Congress Brietbart CEO reveals that Trump donors are part owners At CPAC, Trump lashes out at media MORE (R-Texas) voted against the bill but left open the possibility of supporting it on the floor. 

"I’d like to point out that, as this bill moves to the floor, there remain a few issues that need to be resolved," said Chairman Chuck GrassleyChuck GrassleyGOP senator grilled over DeVos vote during town hall Big Pharma must address high drug prices ­ObamaCare fix hinges on Medicaid clash in Senate MORE (R-Iowa). 

Sens. Cruz, David VitterDavid VitterMercury brings on former Sen. Vitter, two others Lobbying World Bottom Line MORE (R-La.), Dick DurbinDick DurbinDems rip Trump administration for revoking Obama's transgender directive A guide to the committees: Senate McConnell: I’m very sympathetic to 'Dreamers' MORE (D-Ill.) and Chris CoonsChris CoonsSenate advances Trump's Commerce pick Senate Dems move to nix Trump's deportation order Senate Dem: Trump will hurt Gorsuch's confirmation by undermining judiciary MORE (D-Del.) all voted against the bill. 

Technology companies and retailers have pushed hard for the past few years to get a bill passed to address what they see as the growing abuse of the legal system, with trolls buying up patents solely for the purpose of extracting financial settlements.

The bill approved Thursday includes a number of substantial additions to placate companies in the pharmaceutical and biotechnology industries. The underlying bill also contains a number of compromises compared to the House version, which is expected to be marked up in the near future.  

Lawmakers have engaged in a delicate dance to satisfy as many interests without blowing up the overall deal. From the start, lawmakers have said no industry will get everything it wants in the bill.

"We have gotten some flack from some of our allies in the tech community for making some of the changes from the universities, pharmaceuticals to the legal provisions in terms of who pays. But we're trying to seek balance here," said Sen. Charles SchumerCharles SchumerThis week: Trump makes first address to Congress Dean: Schumer's endorsement 'kiss of death' for Ellison How the candidates for DNC chair stack up ahead of Saturday's vote MORE (D-N.Y.), who helped negotiate the bill.

The legislation makes a number of changes to the patent litigation process, dealing with pleadings and discovery standards, fee shifting, demand letters, and rules allowing end users to delay infringement lawsuits while similar cases are litigated against the manufacturer of technology. Companies say all of those tools are being used to bully them into patent settlements.

Coons and Durbin are critical of the legislation, arguing the changes would make it harder for people to defend legitimate patents.

A half dozen amendments by Coons were handily voted down, which tracked closely with his alternate patent legislation introduced earlier this year. At one point during the markup, Sen. John CornynJohn CornynCornyn: Border wall 'makes absolutely no sense' in some areas Ryan on border: ‘We will get this done’ Ryan tours Mexican border on horseback MORE (R-Texas), who helped negotiate the deal, accused Coons of "piecemeal trying to upset the delicate balance we are trying to achieve here."

One amendment sponsored by Sen. Dianne FeinsteinDianne FeinsteinA guide to the committees: Senate Dem: Trump's China trademark looks like a quid pro quo Senate advances Trump's Commerce pick MORE (D-Calif.) that was approved Thursday would bar demand letters from containing a specific monetary settlement request.  

"What I have seen is a shakedown. That's what these demand letters are," Feinstein said.

Recent debate has focused on additions to placate concerns from the the pharmaceutical and biotechnology industries about trial-like proceedings in the U.S. Patent and Trademark Office (PTO), which were set up after Congress last passed a patent bill in 2011.

Those proceedings at the PTO — known as post grant and inter partes reviews — were meant to offer a faster and cheaper way to challenge the validity of a patent.

Supporters say the proceedings are important to weed out weak or vague patents. But critics argue the system is skewed too far against patent holders, and succeeded in getting a whole new section added to the reform bill dealing with the issue.

Those changes at the PTO have been derided by the technology community as having the potential to "significantly weaken" the process. But at least one major patent trade group, United for Patent Reform, representing major tech companies and retailers, has said the change won't cause it to oppose the bill.

Lawmakers still have a number of issues to work out with the PTO provision, including one that would exclude certain Food and Drug Administration-approved drugs from the proceedings.

This story was updated a 1 p.m.