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Patent reform push has new life in Senate

Patent reform push has new life in Senate
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Senate leaders on Wednesday introduced new legislation that would crack down on “patent trolls,” reviving a push for reform that stalled in the upper chamber last year. 

The legislation is aimed at combating what industry groups say is growing abuse of the legal system, with the “trolls” buying up patents solely for the purpose of extracting financial settlements.

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With Republicans now in control of the House and Senate, advocates are hopeful the legislation can make it to President Obama, who has urged lawmakers to take action on the issue.

Sen. Charles SchumerChuck SchumerNew York City subway service could be slashed 40 percent, officials warn Biden congratulates Pelosi on Speaker nomination Senate Democrats introduce bill to shore up PPE supply MORE (D-N.Y.), who was involved in negotiations over the new legislation, said the bill “shifts the legal burden back onto those who would abuse the patent system in order to make a quick buck.”

“I’m hopeful we can move quickly and in a bipartisan way to get this bill passed in committee and on the Senate floor this summer,” he said. A hearing on the bill is already in the works.

The other lawmakers involved in drafting the bill were Sen. John CornynJohn CornynTop GOP senator: Biden should be getting intel briefings GOP senator congratulates Biden, says Trump should accept results Trump keeps tight grip on GOP amid divisions MORE (R-Texas), Judiciary Committee Chairman Chuck GrassleyCharles (Chuck) Ernest GrassleyLoeffler to continue to self-isolate after conflicting COVID-19 test results Loeffler isolating after possible COVID-19 infection More GOP governors embrace mask mandates, but holdouts remain MORE (R-

Iowa) and ranking member Patrick LeahyPatrick Joseph LeahyMcConnell wants deal this week on fiscal 2021 spending figures Democratic senators urge Facebook to take action on anti-Muslim bigotry Senate releases spending bills, setting up negotiations for December deal MORE (D-Vt.). The bill also has the support of other panel members, including Sens. Orrin HatchOrrin Grant HatchMellman: What happened after Ginsburg? Bottom line Bottom line MORE (R-Utah), Mike LeeMichael (Mike) Shumway LeeLoeffler isolating after possible COVID-19 infection Rick Scott tests positive for coronavirus OVERNIGHT ENERGY: Barrasso to seek top spot on Energy and Natural Resources Committee | Forest Service finalizes rule weakening environmental review of its projects | Biden to enlist Agriculture, Transportation agencies in climate fight MORE (R-Utah) and Amy KlobucharAmy KlobucharFormer Minnesota Democratic leader quits party Top cybersecurity official ousted by Trump Lawmakers question tech CEOs about content moderation in first post-election hearing MORE (D-Minn.).

“As I look at the assembled people on the platform today, this is as close as you get to legislative shock and awe,” Cornyn said about the bipartisan co-sponsors.

The negotiations over patent reform date back a year. While the new Senate legislation contains provisions that are similar to a bill working its way through the House, it also contains crucial changes, according to a person familiar with the bill.   

The proposal would establish standards to curb court proceedings that can be used to run up the cost of litigation. Senators this month crafted a new way to limit discovery — a part of the pre-trial procedure — while early motions are resolved, the source said.

The bill also includes a provision on “fee shifting,” a way of requiring the losing party in a lawsuit to pay the winner’s legal fees.

The House version of the bill would require that payback unless a patent lawsuit is found to be legitimate. But the Senate version would only grant the fee shifting if the winner can prove the lawsuit was not “objectively reasonable.”

The Senate bill would also change how courts could go after the parent company of shell organizations that sometimes file frivolous suits and are not able to pay up. 

The issue of fee shifting has long been a hang-up for some Democrats. Senate Minority Whip Dick DurbinDick DurbinDemocrats brush off calls for Biden to play hardball on Cabinet picks Ending Trump's transactional arrogance on our public lands President is wild card as shutdown fears grow MORE (D-Ill.),  and Sens. Chris CoonsChris Andrew CoonsDemocrats brush off calls for Biden to play hardball on Cabinet picks Biden decides on pick for secretary of State Trump keeps tight grip on GOP amid divisions MORE (D-Del.) and Mazie HironoMazie Keiko HironoOVERNIGHT ENERGY: Barrasso to seek top spot on Energy and Natural Resources Committee | Forest Service finalizes rule weakening environmental review of its projects | Biden to enlist Agriculture, Transportation agencies in climate fight Senate advances energy regulator nominees despite uncertainty of floor vote Democratic senators urge Facebook to take action on anti-Muslim bigotry MORE (D-Hawaii) previously introduced a pared back patent reform bill without those provisions. 

When then-Majority Leader Harry ReidHarry Mason ReidBottom line Senate roadblocks threaten to box in Biden How a tied Senate could lead a divided America MORE (D-Nev.) vowed to block a patent reform bill from hitting the floor last year, the opposition reportedly came from the biotechnology industry, universities and trial lawyers.

“Last year, it was stalled by a significant person running the United States Senate. I don’t think there will be that stall this time,” Grassley said. 

Wednesday’s proposal also contains a provision that would protect end users, such as retailers, who are sometimes sued by patent-holders for using a technology the patent-holders do not manufacture. The provision would allow those companies to put off a lawsuit if the manufacturer is also hit with a lawsuit, according to the source.

The bill also would prohibit vague letters alleging infringement from being used in lawsuits. The authors say that provision would give incentive to companies to increase their level of detail in “demand letters,” which can often be the first step in litigation.

The Senate legislation would also make clear that sending abusive letters is a deceptive trade practice that can trigger Federal Trade Commission action.

— This story was updated at 8:14 p.m.