Progressive Policy Institute Urges Left’s Support on PAE Legislation
A report commissioned by the left-leaning Progressive Policy Institute argues that “progressives” should wholeheartedly back efforts to solve the problems caused by abusive patent litigation filed by patent assertion entities (http://bit.ly/151Jx1M). PAE lawsuits are “sucking the lifeblood of innovation out of the American economy,” said Shook, Hardy partner Phil Goldberg, the report’s author, during a conference call on the release the report Tuesday. PAE-initiated litigation has “mushroomed” over the past decade amid the “perfect storm” caused by the rising number of patents that resulted from the increasing economic strength of software and consumer electronics companies, Goldberg said in the report. The U.S. Patent and Trademark Office has seen a rapid rise in the number of patent applications over the past 20 years, and many consumer electronics include technology covered by hundreds of thousands of patents -- an average smartphone may hold technology covered by 250,000 patents, the report said. This convergence of technologies “has created seemingly endless opportunities for patent holders to allege that others’ products are infringing on their patents,” the report said.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Progressives have traditionally backed legislation meant to “find solutions” to schemes that have resulted in “unfair litigation results,” as it did when the America Invents Act passed Congress in 2011, the PPI report said. PAE-initiated lawsuits are “pure money plays” that serve no greater good, making the issue “ripe for progressive leadership,” the report said. At the same time, “there is no ideological divide” in the support Capitol Hill has given to legislation meant to curb PAE abuses, Goldberg said. The report outlines several of the bills circulating on the Hill, as well as legislative proposals the White House released in June (WID June 5 p1). It focuses on the provisions of the Saving High-Tech Innovators from Egregious Legal Disputes Act (HR-845), the Patent Quality Improvement Act (S-866), the Patent Abuse Reduction Act (S-1013) and efforts to curb patent litigation abuse in Vermont and Nebraska.
The report stopped short of endorsing any specific legislation, saying all current ideas “need to be weighed carefully. The trick will be finding solutions tailored to curbing litigation prospecting, while not eroding legitimate rights of traditional patent holders.” The report was meant to be a “curtain-raiser for progressives” and PPI is still exploring the merits of each bill under consideration, Goldberg said. “As you look at the different bills that have been put forward, a lot of times what they're doing is to try to deal with a specific aspect of the problem, rather than dealing with the entire problem,” he said. “Ultimately I think the goal is to move a bill forward that will look at this in a broader fashion and to try to bring a bunch of these ideas under one roof."
The PPI report relies on data from “reports that really don’t hold up to scrutiny” and rely on anecdotal evidence, said Russ Merbeth, chief policy counsel for the PAE Intellectual Ventures. The report excludes data from a recent GAO report (WID Aug 23 p3) and a PricewaterhouseCoopers study that had “verifiable statistical data” on the effect of PAEs on the patent litigation landscape, he told us. Progressives should wait for more verifiable statistical data to come out -- such as the FTC’s planned study of PAEs under its Section 6(b) authority -- before they recommend legislative remedies, Merbeth said. “You don’t want to make public policy based on anecdotal evidence,” he said. Any solution Capitol Hill creates must also “not erode the rights of patent holders,” Merbeth said. “Progressives will find that current legislation doesn’t meet that standard.” The report can also be viewed as evidence that the Hill should pause the patent revamp debate to allow additional time for the provisions of the America Invents Act to affect the system, he said. The patent revamp debate is “probably stalled for the time being” anyway as a result of the government shutdown, said Matt Levy, the Computer and Communications Industry Association’s patent counsel, in a blog post Tuesday (http://bit.ly/1eWZwDS). Since some congressional staffers are furloughed because they are considered “non-essential,” and with the shutdown “dominating the discussion ... it’s hard to see much progress being made in the near future,” he said.