Business leaders on Tuesday urged the Senate Judiciary Committee to include fee shifting in legislation it is debating to combat abusive litigation from patent trolls.
Speaking at a hearing the panel held on patent lawsuit reform, representatives of the Credit Union National Association, Printing Industries of America and Adobe Systems Inc. said provisions that call for the loser in patent litigation to pay for court expenses are necessary to effectively fight patent trolls.
Although absent in the Patent Transparency and Improvements Act, the Senate’s leading patent lawsuit reform measure, fee-shifting provisions are found in the House’s Innovation Act. That bill, which was authored by House Judiciary Committee Chairman Bob Goodlatte (R-Va.), cleared the House in a bipartisan 325-91 vote Dec. 5.
Dana Rao, Adobe’s vice president and associate general counsel for intellectual property litigation, said the Senate measure doesn’t properly address patent troll abuses without tools that include fee shifting.
“In order to disrupt the patent troll problem that we have today, we have to look at the economics,” Rao said, “and the economics are: They face no risk from bringing these lawsuits.”
Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.), who wrote the Senate bill with Sen. Mike Lee (R-Utah), during the hearing didn’t indicate whether he would support fee shifting in the measure. But Leahy has said he is open to working with senators to make modifications to the legislation.
Republican Sens. John Cornyn of Texas and Orrin Hatch of Utah, who sit on the Senate Judiciary Committee, both have introduced bills that have fee-shifting provisions.
John Dwyer Jr., president and chief executive officer of New England Federal Credit Union and the representative for the Credit Union National Association, and Michael Makin, president and CEO of Printing Industries of America, said they back the efforts already underway in the Senate regarding fee shifting.
“We are supportive of steps that are put in place to ensure there is more balance,” Dwyer said. “I think balance is an important word in this context.”
Not all witnesses at the hearing thought Congress must legislate on fee shifting, however. Phillip Johnson, Johnson & Johnson Services Inc.’s senior vice president and chief intellectual property counsel, said he supports fee shifting as a tool to combat patent trolls. But he said Congress might want to wait until the U.S. Supreme Court in February takes up patent cases Octane Fitness LLC v. ICON Health & Fitness Inc. and Highmark Inc. v. Allcare Health Management Systems, both of which concern fee shifting.
“It’s not that Congress can’t or couldn’t” act, said Johnson, who was testifying on behalf of the Coalition for 21st Century Reform, which represents almost 50 major companies. “But then by waiting for the Supreme Court to act, you’ll be able to decide whether the way that they’ve acted is a better way to go forward than whatever legislation you may wish to write.”
It is unclear when the Senate Judiciary Committee might vote on patent lawsuit reform legislation. But at least one committee member is looking for the panel to hold another hearing before it marks up a bill.
Sen. Dianne Feinstein (D-Calif.) said she has heard from a number of individuals who are still hoping to weigh in.
“This is such a difficult, complicated arena,” she said.
