Leahy's patent reform bill to be taken up again this week

By Jessica M. Karmasek | Mar 31, 2014

WASHINGTON (Legal Newsline) -- A patent reform bill -- one of the many introduced in Congress in recent months -- was tabled by a Senate panel until later this week.

On Thursday, the Senate Judiciary Committee took up the Patent Transparency and Improvements Act, or Senate Bill 1720.

However, after some discussion, the committee decided to hold the bill over until its April 3 meeting.

"I appreciate the many different perspectives on these provisions, and know that we will need to strike a balance," U.S. Sen. Patrick Leahy, D-Vt., said in a statement at the beginning of Thursday's meeting.

"Inventors, small businesses, federal judges and the university community have raised sincere and valid concerns that such provisions, if written too broadly, could harm legitimate businesses seeking to enforce their rights. At the same time, properly tailored measures will provide a valuable tool in deterring abusive conduct.

"I am committed to crafting these provisions thoughtfully to achieve an effective solution that can pass this year."

Leahy, who also serves as the judiciary committee's chairman, introduced the bill in November.

His version is considered by some to be a "less ambitious" version of the House's Innovation Act.

The Innovation Act, introduced by U.S. Rep. Bob Goodlatte, R-Va., was approved by the House in an overwhelming bipartisan vote of 325-91 in December and has since been sent to the Senate, where lawmakers are carefully considering it.

Similar to the Innovation Act, Leahy's bill would increase transparency in patent ownership.

In particular, the person or organization that holds the patent and files an action in federal court would have to disclose any and all persons that have a financial interest in the proceedings, or that could be affected by the outcome.

And like the Innovation Act, Leahy's measure targets the widespread sending of frivolous "demand letters."

More specifically, the Senate bill would empower the Federal Trade Commission to consider such letters an "unfair and deceptive act or practice."

S. 1720 also allows cases against customers who are sued for patent infringement to be stayed while the manufacturer litigates the lawsuit.

Leahy's bill also would provide additional resources for small business that are targeted in patent infringement lawsuits, and it calls for various studies to be done by the U.S. Patent and Trademark Office, among others.

U.S. Sen. Claire McCaskill, D-Mo., also has introduced legislation.

Her bill, the Transparency in Assertion of Patents Act, would empower the FTC by requiring minimum disclosures in demand letters.

McCaskill's legislation, submitted earlier this month, also would allow the FTC to specify for businesses exactly what constitutes a deceptive demand letter.

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

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