Mixed response as reform of US patent system stalls
There were mixed feelings among lawyers today, May 22, after the US Senate Judiciary Committee stalled legislation that would have improved transparency in the patent system.
The Patent Transparency and Improvements Act was put on hold after not generating enough support for the proposals from stakeholders.
One lawyer, who asked not to be named, told WIPR that it was a “setback” in legislating against non-practising entities (NPEs) and that the deadlock is likely to continue for months.
However, he added, the legislation would have discouraged patent holders from asserting their rights because all those financially involved in the lawsuit would have had to be named publicly.
Last month a coalition of groups, including the Association of American Universities and the Association of American Medical Colleges, sent a letter to Senator Patrick Leahy (D-Vermont), chairman of the committee, to express “serious concerns with the direction of patent legislation”, writing that “many of the provisions assume that every patent holder is a patent troll”.
The letter warned that changes to the patent system would weaken it and favour patent infringers at the expense of patent holders.
Today, Todd Dickinson, director of the American IP Law Association, said: “The key has always been to find the right balance: deal with truly abusive behaviour, while making sure those real innovators can enforce their rights.
“Just as with the Leahy-Smith America Invents Act, more time and broader constituent input may make for better legislation,” he added.
Leahy and Mike Lee (R-Utah) introduced the bill in November 2013 to combat excessive litigation by NPEs.
The bill was intended to improve the transparency of patent ownership, stop ‘bad faith’ letter abuse and provide support for small businesses in legal proceedings.
Leahy had intended to find a balance between protecting people from legislation from people hiding behind “shell companies”, while preserving the “rights of legitimate patent holders.”
In a statement on his website Leahy said: “There has been no agreement on how to combat the scourge of patent trolls on our economy ... We have heard repeated concerns that the House-passed bill went beyond the scope of addressing patent trolls, and would have severe unintended consequences on legitimate patent holders.”
Leahy added, however, that the legislation could be returned to the committee within the year if there was a new consensus amongst stakeholders.
Last week WIPR reported that the top ten patent litigators in 2013 were NPEs, according to the legal analytics company Lex Machina.
