Senate Delves into Patent Reform

May 13, 2015

pic-patent-drawingOn Thursday, May 7, the Senate Judiciary Committee held a hearing to examine recently-introduced patent legislation, the Protecting American Talent and Entrepreneurship (PATENT) Act  (S. 1137). The bipartisan legislation was introduced April 29 by Senate Judiciary Committee leaders including—Chairman Charles Grassley (R-Iowa) and Ranking Member Patrick Leahy (D-Vt.), and Sens. John Cornyn (R- Texas) and Charles Schumer (D-N.Y.).

The bill, while scaled back slightly from the NSBA-opposed Innovation Act (H.R. 9), still includes language that would be harmful to the nation’s smallest inventors and patent holders. The PATENT Act puts the onus on legitimate small firms defending their patents by allowing for a stay in discovery as well as the customer stay, whereby a patent infringer’s customers could continue to sell a product that is in litigation. It would require small companies to post a bond to get the additional discovery they need, and then delay and make it harder to get that discovery to prove infringement.

The PATENT Act has received praise from the White House and both chambers appear confident that patent reform will be accomplished this year.

NSBA and its high-tech arm, the Small Business Technology Council (SBTC), has raised concerns over various patent bills which would include fee-shifting, pay-to-play, and covered business methods, as these provisions would disproportionately affect small-business inventors and make the cost of defending patents too burdensome to litigate.

Please click here to read and/or watch the testimony on patents from SBTC Co-Chair Robert Schmidt, which provides a detailed outline of why various patent reform proposals could be very problematic for small business and innovation.