House panel approves ‘patent troll’ legislation

Legislation to crack down on so-called patent trolls cleared another hurdle in Congress on Thursday. 

The House Judiciary Committee on a 24-8 vote approved its Innovation Act, which aims to curb the abuse of patent infringement litigation. The committee waded through a marathon of more than 20 amendments, including a manager’s amendment from Chairman Bob Goodlatte (R-Va.).

{mosads}Advocates for strong reform criticized some changes in the manager’s amendment as weakening the bill, and successfully lobbied for some changes. 

Rep. Darrell Issa (R-Calif.) expressed some of those concerns but said lawmakers are trying to strike a delicate balance between multiple industries.  

“Here in Congress we deal with the art of the possible,” Issa said during the day-long markup. “So today we are not just marking up a bill that can pass this committee. We are dealing with the reality of getting a bill to the floor, and getting it approved, to the Senate, and making it law.”

Both chambers have now advanced their respective reform bills — a major priority for technology companies and retailers who have complained for years about trolls who buy up patents solely for the purpose of extracting financial settlements.

Now will come the process of jockeying for floor time in both the House and Senate, then trying to merge the two proposals, which contain some key differences. 

“I am hesitant to simply adopt provisions of the Senate bill, some of which do not appear to be properly drafted,” Goodlatte said at one point during the debate. 

A handful of members, mostly Democrats, opposed the measure Thursday. Ranking Democrat Rep. John Conyers (D-Mich.) lamented the committee for ignoring the Senate’s “more reasonable, but far from perfect, solution to the issue.” 

“Mama, mama, the patent trolls are coming,” mocked Rep. Hank Johnson (D-Ga.), another critic of the bill, saying some provisions of the legislation would gum up litigation rules. 

In February, bipartisan House members introduced a nearly identical version of their patent bill that sped through the House last Congress with 325 votes. That number could be smaller this time around. There were three more votes in committee against the bill compared to last Congress.  

The manager’s amendment approved Thursday contains a number of changes, but it leaves in place a strict fee-shifting provision, which has worried Democrats and will have to be resolved with a pared-back version in the Senate. 

One change would rewrite a provision that limits the amount of early discovery, which can be used by trolls to run up court costs to leverage a settlement. The discovery provision became a point of contention Thursday and went through a number of iterations, before lawmakers adopted language that mirrored the Senate version. 

A major tech and retail trade group warned that an early version was too watered down. Rep. Zoe Lofgren (D-Calif.) said she would have been “hard pressed, frankly, to support the bill” if the change didn’t go through. 

During the markup, the committee also voted to strengthen a new provision in the bill that would crack down on “unreasonable venue shopping” by trolls to find a friendly judicial district to file their suit.  

The changes Thursday would also add language to ensure inventors, banks, venture capitalists and universities are not left on the hook to pay the legal bills of trolls. There were also tweaks to provisions on heightened pleading requirements and a customer-stay provision that is important to the retail industry. 

To satisfy some concerns from the pharmaceutical and biotechnology industries, the amendment also makes a number of reforms to the U.S. Patent and Trademark office’s trial-like proceedings that are meant to knock out vague or over-broad patents. Even with the additions, those industries continue to have concerns with the House version. 

Lawmakers committed to work further on those provisions, which were added “in the last 48 hours,” according to Rep. Jason Chaffetz (R-Utah), who unsuccessfully moved to strike them out.