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 CruzTrump in campaign mode at NRA convention Trump’s hands are tied on 9th Circuit Schumer: Trump's handling of North Korea 'all wrong' 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 GrassleyComey to testify before Senate Judiciary Committee GOP to kill language exempting staff from new ObamaCare repeal bill House cyber chairman wants to bolster workforce MORE (R-Iowa). 

Sens. Cruz, David VitterDavid VitterFormer senator who crafted chemicals law to lobby for chemicals industry Former GOP rep joins K Street lobbying firm Capitol Counsel Lobbying World MORE (R-La.), Dick DurbinDick DurbinLawmakers reintroduce online sales tax bills Democrats exploring lawsuit against Trump Senators warn of 'dangerous' cuts to International Affairs Budget MORE (D-Ill.) and Chris CoonsChris CoonsCoons: Senate may have to 'support military action' A Vandenberg movement in Congress Senate approves Trump's Agriculture chief 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 SchumerSchumer: NYC should refuse to pay for Trump’s security Reagan's 'voodoo economics' are precisely what America needs When political opportunity knocked, Jason Chaffetz never failed to cash in 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 CornynSenate's No. 2 Republican: Border tax 'probably dead' McConnell: Senate will pass short-term funding bill to avoid shutdown The Hill's 12:30 Report 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 FeinsteinDemocrats exploring lawsuit against Trump Overnight Finance: Dems explore lawsuit against Trump | Full-court press for Trump tax plan | Clock ticks down to spending deadline Comey to testify before Senate Judiciary Committee 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.