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Hatch says federal patent reform among his ‘top priorities’ next year

By Jessica M. Karmasek | Aug 7, 2014


WASHINGTON (Legal Newsline) - The push for federal patent reform may have slowed, but it has not died.

Some federal lawmakers continue to call for legislation to fix what they have deemed a broken patent system, despite a failed attempt to do so this spring.

Just last week, U.S. Sen. Orrin Hatch, R-Utah, spoke on the Senate floor about the urgency to pass a bill to curb the growing threat of so-called “patent trolls.”

Generally speaking, patent trolls are patent assertion entities or non-practicing entities that purchase groups of patents without an intent to market or develop a product and then target other businesses with lawsuits.

In his July 30 remarks, Hatch, who also serves as a member of the Senate Judiciary Committee and chairman of the Senate Republican High-Tech Task Force, said legislation to combat abusive patent legislation is among his “top priorities” next year.

“We must ensure that our patent system is as strong and vibrant as possible, not only to protect our country’s premier position as a world leader in innovation, but also to secure our own economic future,” he said.

Hatch introduced the Patent Litigation Integrity Act last year and was among those who worked to achieve a bipartisan agreement in the Senate.

“I intend to do everything in my power to get such legislation passed -- for the good of the economy and the good of the country,” he said, calling the current patent troll problem a “drain” on the nation’s economy.

Hatch told his fellow lawmakers that he believes mandatory fee shifting is the best way to discourage patent litigation in cases where a plaintiff’s or defendant’s case is so weak it should never have been brought in the first place.

He said he will “insist” such a provision be included in any future legislation.

But that is not enough, Hatch said.

“Fee shifting alone gives a prevailing party little relief against patent trolls who litigate in the name of shell companies while their financial backers -- or interested parties -- purposely remain beyond the court’s jurisdiction,” he explained. “Thus, there must be a mechanism to ensure that recovery of fees will be possible even against judgment-proof shell companies.”

He continued, “The recovery of award provision that I drafted is intended to ensure that shell companies primarily in the business of asserting and enforcing patents in litigation cannot escape potential liability for attorneys’ fees if they are found to have pursued an unreasonable case.”

Those deemed interested parties may either voluntarily submit to the court’s jurisdiction and become liable for any unsatisfied fees awarded in the case, or opt out by renouncing sufficient interest related to the litigation, or do nothing, Hatch said.

“In my view, fee shifting without such a recovery provision is like writing a check on an empty account,” he said. “You’re purporting to convey something that isn’t there.”

Near the end of his remarks, Hatch also took a dig at Senate Majority Leader Harry Reid.

Reid, D-Nev., has been blamed by fellow lawmakers -- including U.S. Sens. Patrick Leahy, D-Vt.; John Cornyn, R-Texas; and Chuck Grassley, R-Iowa -- for a piece of proposed legislation that failed to make it out of a Senate committee in May.

Reid reportedly has strong ties to trial lawyers, and they were concerned about the fee-shifting provision of the bill that would require the loser to pay the winner’s legal fees.

“I hope senators will be reminded about the opportunity the Senate abandoned to pass bipartisan, bicameral legislation that was supported by the White House, but pulled from the Senate’s agenda by the Majority Leader,” Hatch said.

“I am disappointed that during the 113th Congress the Senate has failed to act to address this critical challenge.”

From Legal Newsline: Reach Jessica Karmasek by email at

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