Jessica M. Karmasek Mar. 4, 2015, 3:00pm


WASHINGTON (Legal Newsline) - A trio of Senate Democrats have introduced their own patent reform legislation that, they say, would target patent abusers but also strengthen patents and American innovation.

 

U.S. Sens. Chris Coons of Delaware, Dick Durbin of Illinois and Mazie Hirono of Hawaii introduced the STRONG, or Support Technology and Research for Our Nation’s Growth, Patents Act Tuesday.

Coons and Durbin are members of the Senate Judiciary Committee, and Hirono is a member of the Senate Committee on Small Business and Entrepreneurship.

 

The legislation, they say, takes a series of “focused, thoughtful” steps to make the patent system work for individual inventors and research-intensive companies from every sector of the economy.

 

In particular, the bill would make it harder for firms to be targeted with frivolous patent lawsuits, level the playing field between small inventors and large companies, and ensure the U.S. Patent and Trademark Office has the resources it needs to ensure patent quality.

 

“Invention has long been the foundation of our nation’s prosperity and global leadership,” Coons said in a statement. “As our economy continues to grow and diversify, we need to ensure our patent system works for everyone, including inventors from all sectors of the economy. We must stay true to that part of the American Dream that says anyone with a great idea can change the world.

 

“From advanced biofuels to the lifesaving cures that give people a reason for hope, patents have fueled the innovations that help us meet some of our biggest challenges.”

 

Durbin said it’s time to move past the “false premise” that the only way to deter so-called patent trolls is to enact sweeping reforms that will end up weakening protections for everyone.

 

“For generations, our carefully crafted system of patent laws has helped America lead the world in innovation,” he said. “Rather than fundamentally rewrite those laws -- for the second time in five years -- at the request of a few industries, we should instead seek to narrowly target and deter abusive troll behavior while preserving the ability of legitimate patent holders to protect their innovations.”

 

Hironi agreed, noting that the country’s strong patent system drives innovation and fuels long-term economic growth.

 

“Small businesses and entrepreneurs form the backbone of Hawaii’s economy, and the STRONG Patents Act takes important steps to protect businesses harmed by abuses in patent litigation without unnecessarily burdening innovative start-ups and inventors,” she said.

 

STRONG would:
 

  • Crack down on abusive demand letters by empowering the Federal Trade Commission to target firms that abuse startups rather than invent anything;

  • Ensure that pleading standards for patent-infringement cases match the standards used for all other forms of civil actions, creating a barrier to frivolous lawsuits before any funds are spent on discovery;

  • Eliminate fee diversion from the PTO to ensure that those who examine patents have adequate training and dependable funding;

  • Ensure balance in post-grant proceedings at the PTO, so that this expedited form of patent litigation is both fast and fair; and

  • Analyze the impact that the patent system has on small businesses, both from the perspective of startups reliant on patents and those small businesses facing allegations of infringement.
     

A number of groups and associations already have come out in support of the legislation, including the Association of American Universities.

 

“AAU supports this legislation because it targets the abusive practices of patent trolls through judicious, carefully calibrated measures that would not make it more difficult and costly for all patent holders to enforce their patents and thus diminish the overall strength of the U.S. patent system,” it said in a statement.

 

“Universities’ ability to move their discoveries to the private sector for the benefit of the public through technology transfer depends on a strong patent system. It is our hope that Congress will take up this legislation in the coming weeks.”

 

The Association of Public and Land-grant Universities agreed, calling the bill “straightforward.”

 

“Universities rely on a strong patent system to ensure that research discoveries can be transitioned to private sector entities, which can scale-up and develop marketable products that improve quality of life and fuel the economy,” it said.

 

“This measure would help ensure the strength of this technology transfer process, which significantly contributes to our nation’s leadership in science and technology.”

 

Adam Mossoff, a law professor at George Mason University and founder and senior scholar at the Center for the Protection of Intellectual Property, said STRONG is “smart” legislation.

 

“Instead of weakening the property rights of all inventors, it takes a balanced and targeted approach, addressing issues of legitimate concern in our patent system. It appropriately targets identified bad behavior, such as the few patent owners' abusive practices of sending deceptive demand letters,” he said. “More importantly, though, it protects inventors, startups, and small businesses, and it puts an end to patent office fee diversion once and for all.

 

“In so doing, the STRONG Patents Act promotes healthy and thriving economic growth, because it explicitly recognizes the essential role that the patent system serves in the ongoing success of America's innovation economy.”

 

Biotechnology Industry Organization President and CEO Jim Greenwood also praised the proposed reform, calling it “balanced.”

 

BIO is the world’s largest trade association representing biotechnology companies, academic institutions, state biotechnology centers and related organizations. Members are involved in the research and development of innovative healthcare, agricultural, industrial and environmental biotechnology products.

 

“I commend Sen. Coons for his leadership in drafting legislation that cracks down on false or deceptive patent demand letters, re-balances post-grant proceedings to ensure fairness for patent owners and prevent growing abuses, eliminates diversion of PTO user fees and protects the rights of American entrepreneurial businesses,” Greenwood said.

 

The National Venture Capital Association said it, too, supports the legislation.

 

“The right to protect one’s ideas is a bedrock principle of our country and a vital component to the health and well-being of the entrepreneurial ecosystem. I commend Sen. Coons and his colleagues for introducing legislation that will bring appropriate reforms to our patent system,” NVCA President and CEO Bobby Franklin said.

 

Venture capitalists are vital to the patent system because they fund many of the country’s top innovators.

 

“The venture community is a strong advocate for patent reform and believes steps should be taken to curb abusive behavior while also maintaining a robust patent protection system so that small startup entrepreneurs can defend themselves and their patent rights,” Franklin said.

 

Even InterDigital Inc., a Delaware-based mobile technology research and development company, praised the legislation.

 

“Sen. Coons’ STRONG Patents Act maps out an effective course for addressing abusive patent practices without weakening the overall patent system that is critical to America’s economy,” President and CEO William J. Merritt said in a statement.

 

“As an R&D-driven company, we are grateful to Sen. Coons for working to keep America’s patent laws strong, while tackling abuses in a targeted and measured way. Our collective aim should be to ensure America’s patent system continues to be a beacon to the world and the foundation of our innovation economy.”

 

But there are those who argue the legislation should be more robust.

 

“We welcome all attempts to address patent abuse, and this bill has a few modest provisions aimed at improving our patent system,” said Gary Shapiro, president and CEO of the Consumer Electronics Association. “At the same time, halting the epidemic of bogus patent lawsuits will require a more robust and multifaceted approach, including fee-shifting, similar to that taken by the Innovation Act.”

 

CEA, a technology trade association, represents the U.S. consumer electronics industry, including companies like Apple and Google.

 

“The STRONG Patents Act appears less like real patent reform and more like a patent troll-led effort to draft a ‘fig leaf’ bill for senators to sign on to so they can pretend they are supporting patent reform, while shielding the legalized extortion of the patent trolls,” Shapiro said.

 

As Shapiro notes, STRONG does not include a provision that would require the loser to pay the winner’s legal fees.

 

Matthew Shay, president and CEO of the National Retail Federation, on behalf of the United for Patent Reform Coalition, said he appreciates Coons’ “continued interest” in addressing the issue of patent trolls but believes the legislation “will not effectively eradicate” abuses in the system.


“Several provisions of the legislation will actually worsen the current inequities in the patent litigation system that allows patent trolls to thrive and victimize American businesses large and small,” Shay said, arguing that the number of lawsuits being filed by patent trolls remain “at an all-time high.”

 

To download and view a copy of STRONG, click here.

 

From Legal Newsline: Reach Jessica Karmasek by email at patents@legalnewsline.com.

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