CEA Hopeful ‘Patent Troll’ Legislation Within ‘Striking Distance’
CEA is hopeful Congress might be within “striking distance” of meaningful legislation to address patent litigation abuse, said Michael Petricone, senior vice president-government and regulatory affairs. Momentum to address patent litigation abuse has increased quickly over the course of 2013, with many on Capitol Hill still viewing it as a “niche problem” at the beginning of the year, Petricone said at an event Monday meant to address legislative issues of importance to U.S. startups. “Now, they see that it’s impacting the entire economy.” Legislation to address patent litigation abuse during the 112th Congress -- including the Saving High-Tech Innovators from Egregious Legal Disputes (SHIELD) Act -- focused on technology companies, but bills in the current 113th include all sectors.
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That momentum led to a discussion draft from House Judiciary Committee Chairman Bob Goodlatte, R-Va., which is that chamber’s “main vehicle” for addressing patent litigation abuse, Petricone said. The latest version of Goodlatte’s discussion draft, released last month (CD Sept 24 p15), was far stronger than an earlier version and is “a step in the right direction,” Petricone said. The bill has “strong support” from many industries and is likely to have a companion in the Senate courtesy of Judiciary Committee Chairman Patrick Leahy, D-Vt., Petricone said.
Other bills that address facets of patent litigation abuse are also circulating on the Hill, but “we really have to think about a comprehensive solution,” said Donna Harris, co-founder of the 1776 Washington startup community. Fee shifting is one part of the solution, but it isn’t the only solution, she said. Fee shifting, which the SHIELD Act and many other bills address to varying degrees, got support from TMSoft founder Todd Moore. TMSoft faced a possible lawsuit from patent assertion entity Lodsys over its white noise smartphone app, Moore said. Lodsys wanted TMSoft to pay $4,000 to dismiss the lawsuit -- an amount Moore said he could have paid, “but what would keep them from knocking on someone else’s door?” TMSoft fought the suit with the help of a pro bono patent lawyer -- and without that pro bono representation TMSoft’s litigation costs could have totaled millions of dollars, Moore said. Moore has discussed the litigation at other events meant to tout legislative remedies (CD Sept 19 p25). “We've got to do something about this,” he said, adding that only a legislative fix can solve a “serious problem.” Lodsys didn’t comment.
The federal government shutdown is “not helpful” and has temporarily halted momentum to pass legislation to address patent litigation abuse -- but that momentum is likely to restart when the government reopens, Petricone said. “Clearly it’s difficult to get anything done” right now, but “you play the cards you're dealt,” he said. Non-legislative solutions are also important, Petricone said, noting the FTC’s recent work addressing patent litigation abuse. A new study the FTC is undertaking under its Section 6(b) authority (CD Sept 30 p15) will also be a “very positive thing,” he said. CEA is also cosponsoring the TrollingEffects.org website, which publishes demand letters sent by patent assertion entities (CD Aug 7 p16). Petricone said “we hope it works.” Moore said he believed some entities were reluctant to publish PAEs’ demand letters out of concern it would open them up to lawsuits.