Progress Toward Comprehensive Patent Reform Stalls

by King & Spalding
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On May 21, 2014, Senate Judiciary Committee Chairman Patrick Leahy (D-VT) announced that he was removing patent reform legislation from the Committee's agenda, effectively eliminating any chance for Senate consideration this year. While a comprehensive bill might be off the table, it is still possible that Congress could take up and pass legislation to address abusive patent litigation behavior before the end of the year.

Patent Demand Letter Legislation

Earlier this month, the House Energy & Commerce Subcommittee on Commerce, Manufacturing, and Trade approved the Targeting Rogue and Opaque Letters Act of 2014 ("TROL Act"), legislation to prevent the issuance of fraudulent patent demand letters. Efforts to address this form of abusive patent litigation behavior have continued to gain significant traction among business and consumer stakeholder groups, and multiple states have already taken legislative action in the past year. According to the TROL Act's author, Subcommittee Chairman Lee Terry (R-NE), the bill provides the following protections for demand letter recipients: 1) It requires the sender to provide enough information for the recipient to appropriately respond; and 2) It bars the sender from making false or misleading statements. Given the initial positive feedback the bill has received from Members, as well as a broad array of stakeholder groups, it is possible that the TROL Act could be considered and approved by the full House Energy & Commerce Committee before the August recess, paving the way for House floor consideration in the Fall.

On the Senate side, Sen. Claire McCaskill (D-MO), Chairman of the Senate Commerce Subcommittee on Consumer Protection, introduced legislation (S. 2049) to prevent issuance of fraudulent patent demand letters. While Sen. McCaskill and her Commerce Committee colleagues continue work on their own bill, it is likely that any significant legislative action will originate in the House. Although passage of a bipartisan, consensus demand letter bill could be seen as a significant step forward in addressing abusive patent litigation behavior, some have questioned whether enacting such legislation would diminish the incentives to pass a more comprehensive bill. Thus, despite a consensus forming to support such legislation, certain high tech groups may oppose it for political reasons. Another complicating factor may be reconciling congressional legislation with state bills that have already been passed or are currently under consideration.

Trade Protection Not Troll Protection Act (H.R. 4673)

Introduced by Reps. Blake Farenthold (R-TX) and Tony Cardenas (D-CA) on May 29, 2014, the Trade Protection Not Troll Protection Act (H.R. 4673) would make several substantive and procedural changes to the domestic industry and public interest requirements of Section 337 of the Tariff Act in an effort to curb perceived litigation abuses by patent assertion entities. Although similar legislation was introduced last year, no Section 337-related provisions were included in the comprehensive patent reform legislation passed by the House at the end of the year. H.R. 4673 is currently awaiting consideration by the House Ways & Means Committee. Although it is possible that the legislation could be brought up in a Lame Duck Session, it is not likely.

Lloyd N. Hand, William Clarkson

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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