A legislative solution to combat abusive patent troll tactics is well on its way to becoming law with House passage of the Innovation Act today.
Judiciary chairman Bob Goodlatte's (R-Va.) bill, drafted with consultation from Senate judiciary chairman Patrick Leahy (D-Vt.), had strong bipartisan support easily delivering a 325-91 final vote.
The Senate counterpart, the Patent Transparency and Improvements Act, resembling in many respects the House bill, isn't far behind. Introduced last week by Leahy and ranking member Mike Lee (R-Utah), it is scheduled for a hearing on Dec. 17.
Early next year, the two chambers will conference on a final bill, which President Obama, who recommended a set of legislation measures earlier this year to combat patent troll abuses, is likely to sign.
Patent assertion entities, aka patent trolls, have earned a bad rap by buying up patents and then using numerous shell companies to target businesses for license fees that come in just under the cost to litigate. Many of the patents are for technologies, software, and techniques that have become common business practices in the digital age, such as pull-down menus, offering WiFi in retail locations, and even podcasting.
The House bill would require patent assertion entities to be more transparent in seeking licenses and reform legal pleading so that businesses know why they are being sued. There is also a provision that would shift legal fees in the event of a frivolous claim.
"This is a serious piece of legislation," said Dick O'Brien, evp of the 4A's, which worked hard with other marketing organizations to get the bill passed. "It will build muscular curbs around the extortionate practices of patent trolls. In fact, it should go a long way toward putting them out of business. At a time when many Americans view the process in Washington as hopelessly broken, it is reassuring to see the House move so swiftly and in a bipartisan fashion to remove this brake on the emerging digital economy.
While retailers and marketers were pleased with the House bill, they are even more enthusiastic about the Senate draft because it contains specific provisions to combat demand letters.
On the House floor during the debate of the bill, Goodlatte promised that demand letters would be addressed more specifically in separate legislation by the House Commerce Committee.
Earlier this week, the White House issued a statement of administration policy on the House bill, praising the bill for including many of the provisions called for by the president.