Congress Tries Once More, With Feeling, on Patent Reform

Photo: Diego M. Radzinschi/NLJ

Congress is back in session and patent reform is on the table. Again.

Lawmakers came close to passing legislation in 2014, but their efforts were abruptly stymied when trial lawyers and the biotech and pharmaceutical lobby succeeded in convincing the leadership to stop the bill from reaching the Senate floor.

Now, bills in both the House of Representatives and the Senate may finally be moving forward, and their supporters and opponents are again pushing their agendas.

On Tuesday, a group that includes representatives from a variety of companies and industries was scheduled to attend a closed meeting with Senate staff. Their aim was to convince lawmakers that the Senate’s Patent Act would be more effective in combating notorious nonpracticing entities (NPEs) than the more aggressive Innovation Act that is under consideration in the House.

Those scheduled to appear included Kevin Rhodes, vice president and chief intellectual property counsel for 3M Co.; Henry Hadad, senior vice president and deputy general counsel for IP at Bristol-Myers Squibb Co.; Beth Provenzano, vice president for federal government relations at the National Retail Federation; Jon Potter, president and co-founder of the Application Developers Alliance; and Marian Underweiser, IP strategy and policy counsel for IBM.

Disagreements remain over what patent reform should look like. Pharmaceutical companies, for example, are looking to be exempted entirely from inter partes reviews, the increasingly popular patent challenges heard by the Patent Trial and Appeal Board (PTAB) at the U.S. Patent and Trademark Office. Some groups want Congress to make additional changes to PTAB practices. Others argue that such changes would undermine the PTAB’s purpose: to weed out patents that should never have been granted. And one of the more controversial provisions would make it easier for the prevailing party in a patent suit to recover attorney fees.

Meanwhile, companies that have been targeted by NPEs, or “patent trolls,” are concerned that these disagreements could delay action and Congress will run out of time and patent reform legislation will once again die.

Hoping to prevent this, five companies that have been sued by a single NPE, a company called 911 Notify, wrote to both chambers of Congress Tuesday urging swift passage of patent reform legislation. The companies, Gulfstream Telematics LLC, LifeLine Response, CarShield Services Inc., MobileTREC Corp. and ICEdot, offer alert services to seniors, create apps that connect children with emergency services and make software that calls for medical aid after an accident.

“Unfortunately, our businesses and our lifesaving activities are being jeopardized by our membership in a single club: we are among more than forty companies that have been targeted and sued by 911 Notify, a notorious patent troll,” they wrote.

One of those companies, CarShield, was able to fend off a lawsuit filed by 911 Notify with the assistance of law students working at a law clinic at Brooklyn Law School. Others, however, have not been as fortunate. Some have been forced to contract with Notify 911 because they could not afford the cost of litigation, they said.

“We are small and medium-size businesses headed by entrepreneurs who are proud to innovate, create jobs, and serve our communities,” they wrote. “We do not have hundreds of thousands of dollars to fight these lawsuits and invest in our businesses.”

And so the patent reform debate resumes.