Four industry stakeholders briefed staffers from the Senate...
Four industry stakeholders briefed staffers from the Senate Judiciary Committee Friday on the U.S. Patent and Trademark Office’s covered business method (CBM) patent review program, which the committee is considering expanding as part of legislation aimed at curbing abusive patent…
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litigation. CBM expansion is not included in the principal Senate bill on patent litigation, the Patent Transparency and Improvements Act (S-1720), but is the focus in the Patent Quality Improvement Act (S-866), which some industry observers believe could become part of an omnibus Senate patent bill. The Application Developers Alliance, a supporter of CBM program expansion, said it told the committee staffers the program is a less expensive and faster alternative to patent litigation, but noted the program currently focuses only on patents in the financial services sector. “Patent trolls use poor-quality business method patents to extort licensing fees from America’s innovators with the threat of costly, frivolous lawsuits. Entrepreneurs and job creators deserve better,” said Tim Sparapani, ADA’s vice president-law, policy and government relations, in a statement. “The CBM program gives innovators a viable way to challenge patents that never should have been approved in the first place.” Jonathan Zuck, president of the Association for Competitive Technology, urged the committee not to expand the program. Expanding the program “is just not going to help small business innovators,” he said, according to his prepared remarks. “Telling a company facing a $20,000 settlement that they should spend $250,000 to pursue CBM litigation is not a viable alternative. It’s even less attractive for that company knowing it might lose bringing the case to PTO.” CBM expansion would also create more uncertainty in the U.S. patent system and would distract from better PTO efforts to improve patent quality, Zuck said (http://bit.ly/1beP08t). The Internet Association, a CBM expansion supporter, and IBM, an opponent of CBM expansion, also briefed committee staff, a committee aide told us.