04.29.15

Leahy Introduces Bipartisan Bill To Protect VT Businesses From Patent Abuse

. . . ‘Patent Trolls’ Victimize Firms In Vermont And Across The Nation

WASHINGTON (WEDNESDAY, April 29, 2015) -- Senate Judiciary Committee Ranking Member Patrick Leahy (D-Vt.) joined with a bipartisan group of senators Wednesday to introduce legislation to protect Vermont businesses and innovators who too often become the victims of so-called “patent trolls.”  The introduction comes after 18 months of negotiations led by Leahy and other Senate members to craft a comprehensive bill that deters abusive conduct while preserving the strength of America’s patent system.

Patent trolls misuse the patent system for their own financial gain by sending vague demand letters and threatening to sue unknowing customers.  The PATENT Act introduced by Leahy, Judiciary Committee Chairman Charles Grassley (R-Iowa) and other leading members of the Judiciary Committee aims to cut down on this abuse and bring needed transparency to the patent system.

Leahy said:  “When small businesses in Vermont and across the country are threatened with patent infringement lawsuits for offering Wi-Fi to their customers, or for using document scanners in their offices, we can all agree the system is not being used as intended.  I have been working with senators from both parties and a range of stakeholders for two years to design legislation that protects Main Street businesses and innovators.  I am proud to be introducing the PATENT Act today with Chairman Grassley, Senators Cornyn and Schumer and other bipartisan members to protect those who are targeted by patent trolls, while preserving what has made America’s patent system great.”

The PATENT Act would:

  • Establish a clear, uniform standard for pleading patent infringement suits.
  • Increase transparency in patent ownership.
  • Target the widespread sending of frivolous demand letters.
  • Support customers who are sued for patent infringement by allowing the case against them to be stayed while the manufacturer litigates the suit. 
  • Deter abusive litigation practices and ensure bad actors can be held accountable when they hide behind shell companies.
  • Address the high cost of discovery in patent suits.
  • Improve resources for small businesses that are targeted in patent infringement suits.

Additional background on the legislation is available online. Legislative text is also available online.

Leahy has long sought to support small businesses and innovation through the patent system.  As chairman of the Judiciary Committee, in 2011 he authored the Leahy-Smith America Invents Act, which improved patent quality and made the most significant changes to the patent system in 60 years.  Last Congress, Leahy continued those bipartisan efforts by introducing the Patent Transparency and Improvements Act of 2013 and initiating the extensive Senate negotiations that resulted in the legislation introduced today.

Leahy has also urged the Federal Trade Commission to more aggressively pursue enforcement actions against patent trolls using its consumer protection authority. The PATENT Act introduced on Wednesday includes important provisions that would allow the FTC to seek meaningful monetary penalties to deter misconduct.

“Abuse of the patent system is a real problem facing businesses in Vermont and across the country. It requires thoughtful, bipartisan work to tackle this issue,” said Senator Leahy. “I will continue working with stakeholders in Vermont to make sure that the PATENT Act we consider in the Senate supports small businesses and levels the playing field for all who rely on the patent system.”

 

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