House Judiciary Committee Approves Innovation Act
The House Judiciary Committee cleared an amended version of the Innovation Act (HR-3309) Wednesday night, passing it on to the full House on a 33-5 vote. HR-3309, which would curb so-called patent litigation abuse, received unanimous Republican support, with most committee Democrats ultimately voting for it after last-minute negotiations yielded an amendment that moderated the bill’s fee-shifting provision.
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Fourteen committee Democrats had earlier supported a Democratic “substitute” version of HR-3309 that did not include the fee-shifting provision or HR-3309’s provisions that would change judicial rules related to patent cases; the amendment failed 19-14. Many had also supported other amendments that would have limited or removed the fee-shifting and court rule provisions, with opponents arguing that the rules changes encroached on the judicial branch’s independence.
As expected (CED Nov 20 p8), committee ranking member John Conyers, D-Mich., and Intellectual Property Subcommittee ranking member Mel Watt, D-N.C., voted against the bill. Reps. Sheila Jackson Lee, D-Texas, Hank Johnson, D-Ga., and Bobby Scott, D-Va., were the other votes against the bill. Twelve committee Democrats ended up voting for the final bill soon after the committee approved an amendment from Rep. Hakeem Jeffries, D-N.Y., that would exempt the losing party in a patent lawsuit from paying the prevailing party’s legal fees when the losing party demonstrates he had commenced legitimate legal action in good faith. The amendment passed 36-2; Conyers and Johnson voted against it.
Conyers said he viewed the amendment as merely an attempt to make HR-3309 slightly more acceptable and said he would vote against the amendment and HR-3309 because it remained “deficient.” Many Democrats who voted for the amendment said they believed it improved the fee-shifting provision but did not completely fix their concerns. Rep. Jerrold Nadler, D-N.Y., said the amendment made the fee-shifting provision “mildly less bad and therefore is an improvement.” Rep. Joe Garcia, D-Fla., said the amendment was “better than the alternative” but noted that the bill remained an “overreach” and he hoped it would be subsequently fixed.
The committee earlier approved an amendment from Rep. Darrell Issa, R-Calif., that would direct the GAO to study covered business method patents. The original version of HR-3309 included a provision that would have expanded a U.S. Patent and Trademark Office CBM patent review program, but committee Chairman Bob Goodlatte, R-Va., removed it in the manager’s amendment version submitted at markup amid strong software industry opposition and concerns that it would sink the bill in committee. The committee also passed an amendment from Rep. Cedric Richmond, D-La., that would direct PTO to give “special consideration” to the needs of small businesses run by disabled veterans, minorities and women. HR-3309 also includes two amendments that address deceptive demand letters, although Goodlatte earlier repelled attempts to include stronger amendments on demand letters as being outside the committee’s jurisdiction.
Goodlatte praised HR-3309’s passage out of committee as a “pivotal step toward eliminating the abuses of our patent system by discouraging these frivolous patent lawsuits.” Rep. Zoe Lofgren, D-Calif., one of HR-3309’s original co-sponsors, said in a statement that the “bipartisan, wide margin of support in the Judiciary Committee shows the depth of concern about abusive patent litigation. Amendments during the markup improved the bill and further efforts to resolve additional issues will receive attention between today and House floor action."
Industry groups praised the committee vote. CEA President Gary Shapiro said in a statement that HR-3309’s committee approval “marks progress in the fight against the patent trolls who [extort] cash from innovative job creating companies. … Now we must keep up the momentum. Every day that the ‘patent troll’ issue is not addressed is another day that bad actors can abuse our patent system to extort money from legitimate companies.” Association for Competitive Technology President Jonathan Zuck said in a statement that the committee vote “helps entrepreneurs fight back against patent trolls. Thankfully, the right decision was made to drop the covered business method provisions that would have given patent trolls added opportunity to heap legal fees on small businesses.” The Entertainment Software Association said in a statement that it “applauds Chairman Goodlatte and the House Judiciary Committee for their leadership in addressing predatory patent litigation, and strongly supports the Manager’s Amendment to H.R. 3309.”