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Patent reform in peril as trial lawyers flex muscle

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The Senate Judiciary Committee failed to go forward with a vote on patent reform that had been expected to take place during a Thursday hearing. The delay comes at a time that lobbying groups are increasing their efforts behind the scenes to influence the Innovation Act, a bi-partisan bill intended to cure a U.S. patent system widely regarded as dysfunctional.

The delay on the vote came the same day as a new patent booster group appeared on the scene. The group, named “Partnership for American Innovation,” is an odd clustering of seven big companies, including Apple(s aapl), Ford(s f), Microsoft (s msft) and Pfizer.

It’s not clear if the Senate delay and the emergence of the new patent group are related, or if the hold-up is due instead to pressure exerted by trial lawyers on Democratic Party leaders.

According to people familiar with the matter, trial lawyers are concerned about fee-shifting provisions in the Innovation Act, which are intended to deter patent holders from filing flimsy lawsuits. The lawyers’ groups, fearful that the patent rules could inspire broader tort reform, are reportedly moving to obstruct or water down the bill.

The delay comes as patent reform advocates are racing to get a bill passed before members of Congress become consumed with midterm elections. The bill is being led on the Democratic side by Sen. Patrick Leahy (D-Vt) and Sen. Charles Schumer (D-NY), who have repeatedly blasted so-called patent trolls — companies that don’t produce anything, but instead use patents to bring lawsuits against companies that do. Earlier this week, Schumer described the trolls as “leaches on the system” during an event where Etsy, AOL(s aol), and Foursquare described the burden on their companies of paying patent trolls.

If the Senate bill falters, it will deal a blow to a patent reform movement that gained momentum in December when the House of Representatives passed a version of the Innovation Act by a wide bipartisan measure. The proposed law is designed to undercut the economic incentives of patent trolling by making it harder for the trolls to swamp their targets with expensive litigation costs.

Recent academic studies suggest that patent trolls, which target everyone from big tech companies to small town coffee houses, have cost the economy billions of dollars. Congress attempted to fix the problem with the America Invents Act, signed by President Obama in 2011, but the law proved ineffective, leading to the current push for reform. Meanwhile, the giant patent troll Intellectual Ventures is pouring money into a lobbying vehicles to promote its business model.

Sources say that, even as the window for passing new laws is rapidly closing for this term, the current version of the Innovation Act still stands a chance of passing.

“The train’s not coming off the rails yet,” said one person involved in the process, who predicted the Judiciary Committee is likely to vote on the bill next week. The bill would then have to go to the floor of the Senate, and then to a mark-up process with the House before being sent to President Obama, who supports patent reform, for passage.

5 Responses to “Patent reform in peril as trial lawyers flex muscle”

  1. vickley

    First time I’ve looked at Gigaom.
    It’s clear its this is an industry sponsored rag. Industry flacks get last edit on it’s copy.

    Sponsored by the same companies IBM, Google, Microsoft, Apple etc. who take from the weakly funded inventors to line their own pockets.

    These are the companies that have also sponsored the large company giveaway “Innovation Act” a corrupt law supported by corrupt politicians in the pay of the industrialists.

    These are the companies that kill us (see the news on GM) for $0.57.

    • vickley

      Unless you are an inventor or small company that has gone up against a well funded adversary who is using your work as expressed in your issued patent (3 to 10 years of work and fees to obtain) keep your M shut.

    • Call it what you will…patent hoarder, patent troll, non-practicing entity, shell company, etc. It all means one thing: “we’re using your invention and we’re not going to stop or pay”. It’s a pure red herring by large invention thieves and their paid puppets to kill any inventor support system. Their goal is to legalize theft. The fact is, many of the large multinationals and their puppets who defame inventors in this way themselves make no products in the US or create any American jobs and it is their continued blatant theft which makes it impossible for the true creators to do so. To infringers the only patents that are legitimate are their own -if they have any. Meanwhile, the huge multinationals ship more and more US jobs overseas.

  2. ‘the Innovation Act, a bi-partisan bill intended to cure a U.S. patent system widely regarded as dysfunctional…’

    This bill is not intended to cure anything. What it does intend to do is further weaken patent rights for small entities, making it easier for huge multinational corporations to rob and destroy their would be competitors.

    Just because they call it “reform” doesn’t mean it is.

    “patent reform”…America Invents Act, vers 1.0, 2.0, 3.0…

    “This is not a patent reform bill” Senator Maria Cantwell (D-WA) complained,
    despite other democrats praising the overhaul. “This is a big
    corporation patent giveaway that tramples on the right of small

    Senator Cantwell is right. All these bills do is legalize theft. Just because they call it “reform” doesn’t mean it is. The paid puppets of banks, huge multinationals, and China continue to brain wash and bankrupt America.

    They should have called these bills the America STOPS Inventing Act or ASIA, because that’s where they’re sending all our jobs. The present bill (vers 1, 2, 3, etc) is nothing less than another giveaway for huge multinationals and China and an off shoring job killing nightmare for America. Even the leading patent expert in China has stated these bills will help them steal our inventions.

    Patent reform is a fraud on America. These bills will not do what they claim they will. What they will do is help large multinational corporations maintain their monopolies by robbing and destroying their small entity and startup competitors (so it will do exactly what they paid for) and with them the jobs they would have created. They have already damaged the US patent system so that property rights are teetering on lawlessness. These bills will only make it harder and more expensive for small firms to get and enforce their patents. Without patents we cant get funded. In this way large firms are able to play king of the hill and keep their small competitors from reaching the top as they have. Yet small entities create the lion’s share of new jobs. According to recent studies by the Kauffman Foundation and economists at the U.S. Census Bureau, “startups aren’t everything when it comes to job growth. They’re the only thing.” Meanwhile, the large multinationals ship more and more jobs overseas. These bills are a wholesale destroyer of US jobs.

    Small entities and inventors have been given far too little voice on this bill when one considers that they rely far more heavily on the patent system than do large firms who can control their markets by their size alone. The smaller the firm, the more they rely on patents -especially startups and individual inventors. Congress and Obama tinkering with patent law while gagging inventors is like a surgeon operating before examining the patient.

    Those wishing to help fight big business giveaways and set America on a course for sustainable prosperity, not large corporation lobbied poverty, should contact us as below and join the fight as we are building a network of inventors and other stakeholders to lobby Congress to restore property rights for all patent owners -large and small.

    for a different/opposing view on patent reform, please see…