December 5, 2013
It was a big day in the land of patent troll reform, as the House resoundingly passed the Innovation Act with strong support from both sides of the aisle. The bill has some great features, including:
greater disclosure by patent owners so that accused infringers know what they’re accused of
discovery reforms to streamline and reduce the cost of patent litigation
a customer stay provision so that if someone is accused of patent infringement based on a product purchased “off the shelf”, the manufacturer can (with the consent of the accused infringer) step in to conduct the defense
If there was a real disappointment, it was that the "concern trolls" won this round by managing to keep any improvement of the covered business method review program out of the bill. Using everything from misleading statements to out-and-out falsehoods, a handful of protectors of the status quo created a panic about what should have been a fairly non-controversial provision.
I’ll be writing more about that in the days to come, because as we move to the Senate next, we don’t seem to have lost momentum: the Senate Judiciary Committee is having a hearing on December 17 on the patent troll issue.
And for all you patent trolls out there, here’s a little music for you (I apologize if there's a commercial at the beginning, but it’s the official video):
December 2, 2013
November 21, 2013
Yesterday, in a strong bipartisan vote (33-5), the House Judiciary Committee approved the Innovation Act.
There’s more work to do, but this is a big victory. Nearly every major reform that’s been discussed is in the bill:
changing the rules of patent litigation to reduce patent trolls’ leverage, including reducing the cost of discovery and requiring patent owners to give more information up front
adding protections for end users sued by patent trolls
requiring clearer demand letters
While it’s disappointing that there is no provision to deal with existing bad patents, that part of the fight isn’t over yet.
The problem of patent trolls has gotten so far out of hand that every member at the hearing agreed that something needs to be done, even if there were some disagreements over exactly what to do.
In the end, the Committee showed that Democrats and Republicans can still work together. The members of the House Judiciary Committee deserve enormous credit for putting party aside in order to help the businesses that are being victimized by abusive patent litigation.
Rep. Jeffries in particular worked for days to craft a compromise on fee-shifting, and he deserves major congratulations for pulling it off. And Chairman Goodlatte’s willingness to work with the Democrats and adapt the bill in order to garner more support produced much stronger reforms than many people expected.There will be a lot to do in the coming weeks, but this is a great start.
November 19, 2013
There are now eleven bills that have been introduced this Congress to deal with some aspect of the patent troll issue. We thought it might be helpful to give you a quick rundown of each of the currently pending bills:
- Innovation Act (H.R. 3309)
- Patent Transparency and Improvements Act (S. 1720)
- Patent Quality Improvement Act (S. 866)
- Patent Abuse Reduction Act (S. 1013)
- Patent Litigation Integrity Act (S. 1612)
- Demand Letter Transparency Act (H.R. 3540)
- Innovation Protection Act (H.R. 3309)
- Patent Litigation and Innovation Act (H.R. 2639)
- SHIELD Act (H.R. 845)
- Stopping the Offensive Use of Patents Act (STOP Act) (H.R. 2766)
- End Anonymous Patents Act (H.R. 2024)
There are a few basic areas that are being addressed:
making the Covered Business Method review program available to more industries to allow them to deal with existing bad patents patent trolls often assert
curbing abusive litigation tactics patent trolls use
adding transparency to get at who is really supplying patent trolls with patents and with funding
I’ll go through them individually below.
November 6, 2013
[Updated 11/7/2013; see below]
I’ve written before about the importance of the covered business method (CBM) review program in fighting trolls. One of the big claims against making CBM review more widely available is that it will somehow stifle innovation. Turns out that venture capitalists (VCs), who make their money by funding innovation, don’t agree.
Today, 39 venture capitalists signed a letter supporting patent reform and supporting a cheaper alternative to litigation at the PTO, which CBM review provides. This is in addition to the letter signed by nearly 250 small app developers supporting CBM, as well as the letter supporting CBM signed by two dozen industry organizations representing a variety of innovative industries.
And there’s more evidence showing that venture capitalists don’t think that patent assertion (that is, using patents just to make money by threatening or suing with them) is a good thing for innovation. Professor Robin Feldman just released a study exploring the opinions of the VC community about patent assertion. 72% of the 200 venture capitalists surveyed did not agree that patent assertion is positive for startups. And 65% of the venture capitalists surveyed disagreed with the statement, “As a venture capitalist, in making funding decisions, I consider the potential for selling the patents to patent assertion entities if the companies fail.”
Even more interestingly, 100% of the venture capitalists surveyed said that if a new company had an existing patent demand against it, that “could potentially be a major deterrent in deciding whether to invest.”
That’s not exactly supportive of the idea that patent trolls help small inventors.
So who are you going to believe? Big companies talking about helping small inventors, or people whose business is actually helping small inventors?
Show your support for making CBM review more available:
[tweetbutton hashtag='fixpatents']VCs, @USPTO, @WhiteHouse support more CBM review as litigation alternative. So do I.[/tweetbutton]
Update (11/7/2013): Joff Wild at IAM Magazine questions whether Prof. Feldman's study has much to tell us (free registration required):
October 28, 2013