WASHINGTON – A yearlong effort to pass legislation protecting companies against so-called patent trolls was declared all but dead last week, when the bill was removed from the Senate Judiciary Committee’s agenda.
Supporters of the bill said lobbying by pharmaceutical and biotechnology companies, universities and trial lawyers prevented the bill from advancing.
“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,” Sen. Patrick J. Leahy, D-Vt., who leads the Judiciary Committee, said in a statement.
The bill was meant to limit those companies, widely known as patent trolls, whose main business is to gather dormant patents, threaten infringement lawsuits against supposed violators and then offer to settle for less than the target’s probable cost of mounting a defense.
“I have said all along that we needed broad bipartisan support to get a bill through the Senate,” Leahy said. “Regrettably, competing companies on both sides of this issue refused to come to agreement on how to achieve that goal.”
In December, the House of Representatives overwhelmingly passed a bill that would have required more disclosure about who owned a patent and who would benefit from a lawsuit, as well as requiring a judge to determine early in the process whether a given patent was valid.
In the Senate, though, negotiators got hung up on a provision that would have required a patent plaintiff to put up a bond to cover the potential payment of the winning side’s legal fees. That was opposed by lawyers’ groups, Senate aides said.
Universities and medical companies, which often have big patent portfolios, feared the new law would make it hard for them to defend their intellectual property.
The effort to write a new patent law began only two years after President Barack Obama signed into law the America Invents Act, a sweeping overhaul of the patent system enacted in 2011.
That law prevented patent holders from lumping together into a single docket a lawsuit against multiple companies – a provision aimed at trolls. The result, however, was the opposite of what had been intended; it caused the number of patent lawsuits to soar.
Retailers and technology and software companies, the most frequent targets of the lawsuits, expressed dismay over the apparent death of the latest patent bill. Calling the event “a victory for patent trolls,” the National Retail Federation said in a statement it was “deeply disappointed that groups representing the status quo have continued to stall and stymie attempts at effective patent reform.”