CEA Hopeful ‘Patent Troll’ Legislation Within ‘Striking Distance’
CEA is hopeful Congress might be within “striking distance” of meaningful legislation to address patent litigation abuse, Michael Petricone, CEA senior vice president-government and regulatory affairs, said Monday. Momentum to address patent litigation abuse has increased quickly over the course of 2013, with many on Capitol Hill still viewing it as a “niche problem” at the beginning of the year, Petricone said at an event meant to address legislative issues of importance to U.S. startups. “Now, they see that it’s impacting the entire economy,” he said. Legislation to address patent litigation abuse during the 112th Congress -- including the Saving High-Tech Innovators from Egregious Legal Disputes (SHIELD) Act -- focused on technology companies, but bills in the current 113th include all sectors.
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.
That momentum led to a discussion draft from House Judiciary Committee Chairman Bob Goodlatte, R-Va., which currently is that chamber’s “main vehicle” for addressing patent litigation abuse, Petricone said. The latest version of Goodlatte’s discussion draft, released last month, was far stronger than an earlier version and is “a step in the right direction,” Petricone said. The bill has “strong support” from many industries and is likely to have a companion in the Senate courtesy of Judiciary Committee Chairman Patrick Leahy, D-Vt., Petricone said.
Other bills that address facets of patent litigation abuse are also circulating on the Hill, but “we really have to think about a comprehensive solution,” said Donna Harris, co-founder of the 1776 Washington startup community. Fee shifting is one part of the solution, but it isn’t the only solution, she said. Fee shifting, which the SHIELD Act and many other bills address to varying degrees, got support from TMSoft founder Todd Moore. TMSoft faced a possible lawsuit from patent assertion entity Lodsys over its White Noise smartphone app, Moore said. Lodsys wanted TMSoft to pay $4,000 to dismiss the lawsuit -- an amount Moore said he could have paid, “but what would keep them from knocking on someone else’s door?” TMSoft fought the lawsuit with the help of a pro bono patent lawyer -- and without that pro bono representation TMSoft’s litigation costs could have totaled millions of dollars, Moore said. “We've got to do something about this,” he said, adding that only a legislative fix can solve a “serious problem.” Lodsys did not comment.
The federal government shutdown is “not helpful” and has temporarily halted momentum to pass legislation to address patent litigation abuse -- but that momentum is likely to restart when the government reopens, Petricone said. “Clearly it’s difficult to get anything done” right now, but “you play the cards you're dealt,” he said. Non-legislative solutions are also important, Petricone said, noting the FTC’s recent work addressing patent litigation abuse. A new study the FTC is undertaking under its Section 6(b) authority will also be a “very positive thing,” he said. CEA is also cosponsoring the TrollingEffects.org website, which publishes demand letters sent by patent assertion entities (CED Aug 7 p13). Petricone said “we hope it works.” Moore said he believed some entities were reluctant to publish PAEs’ demand letters out of concern it would open them up to lawsuits.