On Thursday, Senator Leahy’s (D-Vt.) patent reform bill will go before the Senate Judiciary Committee for consideration.
In a statement last week addressing the many proposed solutions to “patent trolls,” Leahy said:
“I appreciate the many different perspectives on these provisions, and know that we will need to strike a balance. Inventors, small businesses, federal judges, and the university community have raised sincere and valid concerns that such provisions, if written too broadly, could harm legitimate businesses seeking to enforce their rights. At the same time, properly tailored measures will provide a valuable tool in deterring abusive conduct. I am committed to crafting these provisions thoughtfully to achieve an effective solution that can pass this year.”
Leahy’s bill, S.B. 1720, seeks to curb demand letters and prevent trolls from hiding “behind layers of shell corporations.” Additionally, it allows patent lawsuits against customers to be stayed while the manufacturer of the product litigates the case. The Committee is also considering various amendment proposals, including a fee shifting amendment being pushed by Senator Cornyn.
Digital Liberty supports fee shifting as part of a complete patent reform plan. However, even if Leahy’s bill ultimately includes a fee shifting provision, it is still falling short in two other critical areas.
The first is heightened pleading, whereby a patent holder filing a suit would have to specifically identify what part of their patent was infringed upon, as well as the name and serial number of the product allegedly in violation. This will prevent patent trolls from issuing vague complaints to drive up the cost of litigation and pressure defendants to settle.
Secondly, discovery reform is needed in the package. Patent trolls often seek extensive discovery to drive up the costs for defendants, again pressuring them to settle out of court. Only after a construction ruling should most discovery take place.
These two provisions coupled with fee shifting would provide for the most comprehensive patent reform. It’s important to note that Representative Goodlatte’s (R-Va.) bill, H.R. 3309, includes all three of these reforms. With Senator Leahy’s bill advancing in the Senate, Digital Liberty urges lawmakers to not only include fee shifting, but heightened pleading and discovery reform as well. All three provisions are necessary to successfully curb abusive patent litigation.