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 Sen. Patrick Leahy, chairman of the Judiciary Committee, has
sponsored legislation aimed at targeting aggressive "patent
assertion entities," often known derisively as "patent trolls" — companies that buy or license patents and then extract licensing
fees or file infringement lawsuits often viewed as frivolous.
Sen. Richard Blumenthal, Democrat of Connecticut, urged caution.
"I am wary of overkill," he said. "I am wary of unintended
consequences. We have a very important obligation here to make sure
that we do no harm."
But Leahy said the bill as written does not go too far.
"(The bill is) balanced and targeted to preserve the rights of
legitimate patent holders," he said at a committee hearing. "As we
discuss proposals to address the problem of patent trolls, I urge
this committee to stay focused on that balance."
Witnesses at the three-hour hearing were drawn from various
backgrounds, but showed broad support for allowing judges to require
losers in patent litigation to pay the winner's fees if the judge
decides the case should never have been filed, a requirement
designed to cull frivolous actions.
Dana Rao, an Adobe Systems, Inc vice president, was one who
supported fee-shifting.
"Fee shifting is a disruption of the business model (of patent
trolls), he said. "We really need to address the economics."
Philip Johnson, the chief intellectual property counsel at
pharmaceutical company Johnson & Johnson, who spoke for a coalition
of companies, was critical of proposals to create delays in document
discovery during patent litigation while the battling sides sort out
what certain portions of the patent, called claims, really mean.
"Such an approach would serve as an open invitation to copyists to
enter the U.S. market safe in the knowledge that patent actions
brought against them will come to a virtual standstill for an extra
year or more while the parties wrangle over the meanings of patent
claim terms," he said.
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"In the meantime, manufacturers' market shares, and the jobs they
support, will shrink as the infringement continues."
The Senate follows the U.S. House of Representatives in taking up
the issue of patent abuse. The House approved a bill this month
aimed at reining in "patent trolls" by encouraging judges to award
fees to the winner of an infringement lawsuit.
The House bill would also require companies filing infringement
lawsuits to provide specific details on what patent is infringed and
how it is used.
Sponsored by Robert Goodlatte, Republican of Virginia, it targets
much-criticized patent assertion entities, for behavior such as
sending large numbers of licensing demands to small businesses
without determining if they actually use infringing technology.
The White House urged Congress in June to take steps to curb abusive
patent lawsuits that have sprung up in recent years, especially in
the technology sector.
In addition, the Federal Trade Commission has a study under way on
the impact on competition of abusive patent litigation.
(Reporting by Diane Bartz. editing by Andre Grenon)
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