Patent reform at a fever pitch

I have heard that there is a significant uptick in requests for cartoonists to draw pictures of trolls lately. That may be as good an indication as any that the renewed interest in patent reform is reaching a fever pitch. Since the swearing in of the 114th Congress in January, more than a handful of bills were introduced by the middle of April. Some deal with specific issues like funding for the U.S. Patent and Trademark Office (USPTO); providing for a grace period that would still allow an inventor to obtain a patent; or targeting abusive demand letters. Others are more comprehensive and make significant changes to the patent system.

There have already been several hearings about the bills on Capitol Hill and additional hearings and markups are already in the works. And potential directors for the USPTO were vetted with patent reform as a litmus test for selection. Recently, the successful candidate had her positions on patent reform fully investigated at hearings for her confirmation.

So where do we stand on patent reform?

A quick review of media coverage on the issue indicates that most believe that some patent reform is needed to thwart abusive tactics used by trolls. This is particularly true when these entities try to extort payments from potential defendants who would rather settle at lower licensing fees than risk the costs of a protracted litigation. But that is where the harmony ends.

Supporters of comprehensive patent reform seem to fall into two camps. There are those who want to limit a plaintiff’s ability to bring suit and those who want to surgically excise predatory behavior without harming the legitimate plaintiffs or risking unintended consequences.

{mosads}These forces came into focus when Rep. Bob Goodlatte (R-Va.) reintroduced his comprehensive patent reform bill (H.R. 9), an identical bill to the one that previously passed the full House in 2013. As H.R. 9 is poised to be marked up in the House Judiciary Committee any day now, there are calls for amendments that would adjust the bill to reflect recent events that have seemingly reduced the need for legislation in some areas.

It is true that since 2013, the courts and USPTO have been more active on a number of key issues identified in the legislation. The courts have made more use of existing law to deter frivolous suits by providing attorney’s fees to the winning party in those suits. In the months following the Highmark and Octane decisions, research indicates there has been a significant increase in awarded fees. The USPTO is undertaking quality improvements to provide clearer patent disclosures and claim boundaries to remove uncertainty from the system which upsets the model for many troll activities. Databases for demand letters now inform the public of some of the problematic attacks on mom-and-pop enterprises. And efforts are underway to determine the real party in interests in the ownership of these patents.

It is the camp in favor of the narrowest of reforms that is seeking amendments to the Goodlatte bill in the House. They have supported the introduction of a more limited bill, the STRONG Patents Act, introduced in the Senate by Sen. Chris Coons (D-Del.). This group includes universities, the biotech industries and smaller inventors, amongst others, who strongly oppose “loser pays” with the ability to reach beyond the parties for payment. They also want to assure that the legitimate plaintiff is undeterred in her ability to assert her patent to the full extent of the law. They believe that sometimes a small entrepreneurial patent owner needs to sue to jumpstart licensing discussions with an established industry giant.

The unabashedly pro-reform camp comprises some in the high-tech community, the retailers, the financial institutes and many in the bricks-and-mortar industries who have been repeatedly hit by abusive troll tactics that have harmed their industries. Their frustration is palpable and they just want these unfounded attacks based on overly broad and vague patent claims to stop.

There is merit to both sides. But legislation is easier to stop than it is to get it to the president’s desk. All of the parties are well aware of that fact and are engaging in discussions on all levels. Some modifications to the Goodlatte bill seem inevitable as legislation can be crafted to take into consideration the concerns about the legitimate plaintiffs while still removing the parts of the system that are being abused.

Congress and the stakeholders engaged in patent reform discussions should avoid exclusively focusing on the activities of trolls, as entertaining as it may be on late-night television. Instead, a productive dialogue about patent reform should focus on identifying the areas that could most benefit from congressional guidance. Deterring abuse of our patent system is a shared goal of every stakeholder, as patents are a driver of economic growth and a leading creator of jobs in the U.S. As legislation moves forward, I encourage all parties to center on that goal — if that happens, the dialogue about how to improve the system will ultimately result in better legislation.

Stoll is a partner and co-chair of the intellectual property group at Drinker Biddle & Reath and a former commissioner for patents at the United States Patent and Trademark Office.