Stakeholders Await Final Language of Senate Patent Bill Compromise
Stakeholders across the spectrum on the patent revamp legislation debate were waiting at our deadline Monday for the Senate Judiciary Committee to release the final language of a long-awaited compromise on the Patent Transparency and Improvements Act (S-1720). Stakeholders had widely anticipated the committee would release the compromise, contained in a manager’s amendment, when the Senate returned from recess Monday. The timing of the compromise’s release could signal whether the committee would be able to mark up S-1720 this week, stakeholders told us. Several said last week that they were optimistic that Senate Judiciary would finally move on S-1720 following positive negotiations over the two-week recess, which followed multiple postponements of the markup. Those negotiations yielded a draft compromise from Sens. John Cornyn, R-Texas, and Chuck Schumer, D-N.Y., that included language for several controversial provisions not in the original S-1720 (CD April 28 p10).
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Negotiations on the details of several clauses were ongoing Monday morning, said Ken Salomon, a partner at Thompson Coburn who has lobbied on patent legislation on behalf of online retailer Overstock.com. Negotiations on those provisions were “very close,” and there was a “50-50” chance that the compromise manager’s amendment would be ready in sufficient time to allow a Thursday markup, Salomon said during a FCBA event Monday. “I would not be surprised if [S-1720] gets out of committee this week, or at least gets started in committee this week,” said Intellectual Ventures Chief Policy Counsel Russ Merbeth to us after the FCBA event.
The language in the compromise fee-shifting provision was “still on the table,” as was the language in the compromise customer stay provision, Salomon told us. The Cornyn-Schumer draft compromise’s fee-shifting provision would cover only “reasonable attorney’s fees” and not other fees covered in the House-passed Innovation Act (HR-3309). Negotiations were continuing on customer stay language because there were questions about whether the provision would require that customers who get a lawsuit stay be bound by the results of a ruling when the manufacturer stepped into the case on the customer’s behalf, Salomon said. Questions also remained on how much specificity to include in language on heightened pleading standards and pre-litigation demand letters, he said. Cornyn-Schumer’s demand letter language reflected ideas -- but not the specific language -- are included in the controversial Transparency in Assertion of Patents Act (S-2049), said Charles Duan, Public Knowledge’s director-Patent Reform Project.
The changes reflected in the Cornyn-Schumer compromise were “basically a wash,” Merbeth said. The movement reflected in the language on fee-shifting was positive, but language has worsened in a provision that would prevent a patent assertion entity (PAE) from using essentially asset-less shell companies in a patent case to avoid potentially paying damages at the end of the case, Merbeth said. That provision has moved away from requiring plaintiffs only to post a bond in a case, reflecting a shift in focus away from targeting “bad actions” toward targeting “bad business models,” he said. Merbeth said during and after the event that he’s concerned the rush to get S-1720 out of committee and up for a Senate floor vote will result in a bill causing “unintended consequences” for individual inventors and others in the U.S. patent system. Several Senate Democrats who were previously concerned about parts of S-1720 are likely still concerned now, Merbeth said.(jphillips@warren-news.com)