Senate Judiciary Committee Approves Bipartisan Bill That Will Protect VT Businesses From Patent Abuse

. . . Leahy A Leading Voice In Effort To Combat Patent Trolls In Vermont And Across The Nation

WASHINGTON (THURSDAY, June 4, 2015) – The Senate Judiciary Committee on Thursday overwhelmingly approved legislation coauthored by Senator Patrick Leahy (D-Vt.) and other leading senators that protects Vermont businesses and innovators who too often become the victims of so-called “patent trolls.”  The bill goes next to the full Senate for consideration.

The PATENT Act was approved by a vote of 16 to 4.  The vote comes after nearly two years 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.

Leahy said:  “I continue to hear about the urgent need for these reforms from Main Street businesses in Vermont and across the country.  When businesses are threatened with patent suits just for using a document scanning machine, or when website owners like the Vermont Country Store face threats simply for using basic software in e-commerce, the patent system is not working as intended.  I am proud that our measures to address these problems are a key piece of the PATENT Act.” 

The PATENT Act aims to cut down on abuses in and bring needed transparency to the patent system.  Specifically, the bill would:

·         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. 

·         Increase transparency in patent ownership.

·         Deter abusive litigation practices and ensure that bad actors can be held accountable when they hide behind shell companies.

·         Establish a clear, uniform standard for pleading patent infringement suits.

·         Address the high cost of discovery in patent suits.

·         Improve resources for small businesses that are targeted in patent infringement suits.

·         Address concerns about abusive conduct in patent proceedings before the U.S. Patent & Trademark Office.

Also included in the legislation approved Thursday is Leahy’s bipartisan Patents for Humanity Improvement Act which builds on an existing award program at the U.S. Patent and Trademark Office that recognizes patent holders who use their technology to improve the health and quality of life in impoverished nations.  The Leahy measure improves the incentives for small businesses to participate in the program by ensuring that the prize – a certificate for expedited processing of certain matters at USPTO – can be transferable to third parties.  Leahy joined with Senator Chuck Grassley (R-Iowa) to introduce the bipartisan measure last month.

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.  In the 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 approved by the panel on Thursday.

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

Additional background on the PATENT Act is available online. Legislative text is also available online.

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