Some Momentum Observed on Senate Patent Revamp Legislation

Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., placed the Patent Transparency and Improvements Act (S-1720) on the docket for the committee’s March 27 executive business meeting, meaning the committee could mark up the bill as soon as April 3. Sen. Dianne Feinstein, D-Calif., introduced the Patent Fee Integrity Act Thursday night, earning support from stakeholders. That bill would establish a separate fund for Patent and Trademark Office user fees to allow PTO full access to that line of funding. Sens. Tom Coburn, R-Okla., Amy Klobuchar, D-Minn., and Jeff Flake, R-Ariz., were original co-sponsors of the bill (1.usa.gov/1fYavy4). The future for the Transparency in Assertion of Patents Act (S-2049) remains murky, with no firm date yet set for a rescheduled markup following two postponements, stakeholders said.

Leahy said in a statement Thursday that he’s “committed to ensuring we move forward” with a bipartisan compromise version of S-1720. Negotiations on the compromise version of S-1720 are still ongoing, and Senate Judiciary has not begun circulating a compromise draft, said an industry official. Senate Judiciary consideration of S-1720 would follow months of behind-the-scenes negotiations on the bill, including staff briefings on industry concerns about provisions the committee is considering for the compromise version of S-1720 (CED Feb 12 p3).

One of the remaining sticking points in those negotiations appears to be “how to put litigation reform provisions into the bill,” said the industry official. The committee is considering language on litigation reform from two other patent bills: The Patent Abuse Reduction Act (S-1013) and the Patent Litigation Integrity Act (S-1612). Committee Republicans have been pushing litigation reform as key to their support for S-1720, while committee Democrats have expressed concerns about the language of provisions under consideration. Intellectual property and legal groups have also been concerned about the inclusion of litigation reforms in S-1720, as they were when the House included those provisions in the Innovation Act (HR-3309). The American Intellectual Property Law Association “supports S-1720 conceptually,” but believes the potential litigation reform provisions -- including court rules in patent cases and fee shifting -- are “much more controversial and much more challenging,” said AIPLA President Todd Dickinson, former PTO director.

The Patent Fee Integrity Act quickly received praise from AIPLA and other stakeholders. The group was one of more than two dozen stakeholders that sent a joint letter to Feinstein voicing their support for the bill. Ensuring sustainable PTO funding has been the “holy grail” for the IP community for decades, Dickinson told us. House Judiciary Committee Democrats attempted to place a provision similar to Feinstein’s bill into HR-3309, but it failed to pass during a committee markup. Some patent revamp supporters have said AIPLA believes Senate Judiciary should consider adding language from Feinstein’s bill into the amended S-1720 because that would give it a “significant leg up,” Dickinson said, though he noted that some patent revamp advocates believe it could also become a “poison pill.” BSA/The Software Alliance also supports the bill, said Tim Molino, director-government relations.

The status of S-2049 remained unclear Friday, with no word on when the Senate Commerce Committee may mark it up. The committee had placed S-2049 on track to be marked up with seven other bills soon after Sen. Claire McCaskill, D-Mo., introduced it earlier this month, but postponed the scheduled markup twice. “It seems like there was a rush to mark the bill up, and I think people assumed it must have had widespread support,” said an industry lawyer. “Perhaps that was premature.” Industry stakeholders noted that the committee plans to hold a markup on at least some of those eight bills after it returns from recess, but a date was not yet scheduled Friday and it isn’t clear that S-2049 will be on the docket. “Nobody really knows what’s going on with that bill,” the industry counsel said. Senate Commerce Chairman Jay Rockefeller, D-W. Va., S-2049’s main co-sponsor, “was calling people and asking for support,” but it’s unclear how successful that effort has been thus far, the industry lawyer said.

Many industry stakeholders haven’t publicly commented on S-2049 because they may support the bill’s aims but “are a little nervous” about the bill’s language on extending FTC authority on patent demand letters, the industry lawyer said. “The amount of disclosure the bill requires is enough that it worries them. There’s also a concern that the bill could pass and people could then say ‘we did patent reform, so let’s skip the rest of it.'” The delay on S-2049 is due in part to proponents’ efforts to massage the bill’s language to ensure it “doesn’t go too far,” Dickinson said. “I would also guess that because you now have two committees involved, there are certain committee interests and committee prerogatives involved. There’s probably a lot of discussion between committees’ staffs and members about who does what and who gets credit for what.”