Sen. Leahy Announces Failure to Reach Consensus on Patent Bill

May 21, 2014. Sen. Patrick Leahy (D-VT), the Chairman of the Senate Judiciary Committee (SJC), announced in a release that "Because there is not sufficient support behind any comprehensive deal, I am taking the patent bill off the Senate Judiciary Committee agenda."

Sen. Charles Grassley (R-IA), the ranking Republican on the SJC, stated in a release that "I am surprised and disappointed that the Senate Democrat leadership is not willing to move forward on a bill that we've worked on so hard and were ready and expecting to mark up tomorrow. We put in a good faith effort to get to this point, and it's too bad that the bill is being pulled from the agenda."

This bill is S 1720 [LOC | WW], the "Patent Transparency and Improvements Act of 2013". It had been on the agenda for the SJC's executive business meeting on Thursday, May 22. It has repeatedly been on the agenda for the next meeting for months.

Sen. Leahy (at right) said that "We have been working for almost a year with countless stakeholders on legislation to address the problem of patent trolls who are misusing the patent system. This is a real problem facing businesses in Vermont and across the country. Unfortunately, there has been no agreement on how to combat the scourge of patent trolls on our economy without burdening the companies and universities who rely on the patent system every day to protect their inventions."

The House passed HR 3309 [LOC | WW], the "Innovation Act", last December. Its key provision is fee shifting.

Sen. Leahy said that "We have heard repeated concerns that the House-passed bill went beyond the scope of addressing patent trolls, and would have severe unintended consequences on legitimate patent holders who employ thousands of Americans."

There are also bills within the jurisdiction of the House Commerce Committee and Senate Commerce Committee that would regulate patent infringement demand letter practices by amending the FTC Act.

Sen. Leahy said that "I have said all along that we needed broad bipartisan support to get a bill through the Senate. Regrettably, competing companies on both sides of this issue refused to come to agreement on how to achieve that goal."

He added that "If the stakeholders are able to reach a more targeted agreement that focuses on the problem of patent trolls, there will be a path for passage this year and I will bring it immediately to the Committee."

The National Retail Federation (NRF) stated in a release that "Withdrawing the patent reform bill is a victory for patent trolls." NRF members include businesses that receive patent infringement demand letters because they are end users of allegedly infringing products made by others.

The NRF wrote that "We are deeply disappointed that groups representing the status quo have continued to stall and stymie attempts at effective patent reform." It added that "We will not rest until the bipartisan compromise ironed out by Senators Schumer and Cornyn is brought before the Judiciary Committee for consideration."

Matt Levy offered the following analysis of Sen. Leahy's announcement: "unless patent trolls agree to be regulated and restricted, or alternatively everyone else agrees to an empty symbolic gesture, Senator Leahy won’t consider patent reform. This is, of course, ridiculous."

He wrote that "There are only a small handful of non-abusive companies siding with the trolls. The vast majority of American businesses support a ``comprehensive deal´´ like the one that passed the House late last year and the bipartisan measure developed by Members of the Senate Judiciary Committee."

Levy also noted reports that "Senate Majority Leader Harry Reid actually killed the bill, based on objections from large patent owners and the trial lawyers. That alone belies the claim that Senator Leahy’s decision was based on any failure by reform proponents to be reasonable."

See also, stories titled "Patent Legislation Update" in TLJ Daily E-Mail Alert No. 2,637, April 7, 2014, "Senate Judiciary Committee Members Still Working on Patent Bill" in TLJ Daily E-Mail Alert No. 2,641, April 17, 2014, "Senate Judiciary Committee Again Holds Over Patent Bill" in TLJ Daily E-Mail Alert No. 2,650, April 30, 2014, and "Senate Judiciary Committee Holds Over Patent Bill" in TLJ Daily E-Mail Alert No. 2,656, May 8, 2014.

(Published in TLJ Daily E-Mail Alert No. 2,660, May 20, 2014.)