US Patent Reform Dead – For Now

united-states-capitol-92We previously reported how “Patent Reform Could Affect All Patent Owners.”

Responding to pressure from large companies such as Google and Cisco, the US House of Representatives rushed a vote on the “Innovation Act” back in December.  The bill was the House’s attempt to rein in so-called “patent trolls,” but it contained numerous provisions that would likely have been detrimental to the interests of all patent owners.

For the bill to become law, the Senate would have had to first pass “companion legislation,” and the differences would then have to be worked out.  The companion legislation was expected to be Senator Patrick Leahy’s (D-VT) proposed “Patent Transparency and Improvements Act of 2013.”

Many patent owners recognized the same flaws in Leahy’s proposed bill as existed in the House’s bill.  A coalition of universities and biotech companies wrote Leahy to say

We believe the measures in the legislation … go far beyond what is necessary or desirable to combat abusive patent litigation, and would do serious damage to the patent system.  Many of the provisions would have the effect of treating every patent holder as a patent troll.

Leahy, who serves as the Chairman of the Senate Judiciary Committee, announced last week (May 21) that he was taking the bill off the committee’s agenda, effectively scuttling any chances for passing a patent reform bill during this session of Congress.

In his statement Leahy said

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.  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.

In a surprisingly candid admission that corporate interests, not national interests, were driving the debate Leahy also said

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

Leahy said there was still a chance for passage of a bill this year if competing interests could reach some kind of consensus, but many observers consider that unlikely.  According to the Washington Post the bill was dropped due to pressure from Senate Majority Leader Harry Reid (D-NV).

While it appears that patent owners can breathe a sigh of relief for the moment, it’s likely that patent reform will be on the Congressional agenda again next year.  In the meanwhile, many states are pressing ahead with their own “anti-patent troll” bills.  Even though patent litigation is a federal matter, states are regulating activities related to enforcing patents, such as the contents required in demand letters.  These bills have a negative impact on all patent owners, who will now have to monitor state laws to ensure compliance when seeking to enforce their patents.


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