Senate Judiciary Expected to Mark Up Patent Reform Bill

April 30, 2014

pic-patent-drawingOn Thursday, May 1, the U.S. Senate Judiciary Committee is expected to mark up the Patent Transparency and Improvements Act (S. 1720). S. 1720 was introduced by Chairman Patrick Leahy (D-Vt.) and Sen. Mike Lee (R-Utah) on Nov. 18, 2013 and includes a number of provisions of both interest and concern to NSBA, including, but not limited to, provisions addressing bad faith demand letters, customer stay, and codifying the judicially-created doctrine of obviousness-type double patenting. In addition to the foregoing issues, Chairman Leahy is expected to introduce a Manager’s Amendment that will likely include several other provisions addressed in the House-passed Innovation Act, but not included in the underlying bill such as heightened pleading standards, fee shifting, and discovery reform.

Last year, NSBA sent a letter to Members of the U.S. House of Representatives opposing the Innovation Act, which passed the House on Dec. 5, 2013 by a margin of 325-91.  Like the Innovation Act, the Patent Transparency and Improvements Act (S. 1720) and the Transparency in Assertion of Patents Act (S. 2049) seek to address the purported increase in patent infringement litigation.

Given the diversity of NSBA’s membership, NSBA convened a series of members-only teleconferences to discuss these issues and attempt to reach a consensus on whether to support or oppose the relevant provisions of the bill. These discussions allowed NSBA to reach an agreement on several key areas of concern; however, because NSBA is comprised of more than 65,000 small businesses in every state and every industry throughout the country, members were unable to reach a consensus on some of the more controversial provisions such as fee shifting, involuntary joinder, and heightened pleading standards.

While supportive of reasonable efforts and reforms to ensure that small businesses are not unnecessarily burdened by undue or unwarranted patent infringement actions, NSBA believes that any legislation that is designed to reform our patent system or the patent litigation process must adequately consider and address the concerns of small businesses, including the potential negative impact that certain provisions may have on individual inventors and small, innovative companies.