Patent Reform: Where We Are and Where We’re Going (Senate Version)


Tomorrow morning, the Senate Judiciary Committee will markup the PATENT Act, a comprehensive piece of legislation that seeks to address the patent troll problem. We explained what we liked about that bill here when it was first introduced. In short, the most important provisions of the bill rein in an out-of-control patent litigation system that allow bad actors (trolls) to force startups to pay up by threatening expensive lawsuits.

This is a key political moment for patent reform: in fact, it was exactly at this time last year—on the eve of markup in the Senate—when efforts to fix the system fell apart. “Marking up” a bill is a crucial step toward making law; tomorrow, senators on the Judiciary Committee will debate and rewrite the legislative language and then, if everything goes according to plan, vote the bill out of committee and send it to the Senate floor for a full vote.

At the same time, debate continues in the House on a similar but slightly different piece of legislation, the Innovation Act. That bill should be marked up next week and we’ll of course be watching it closely.

At this point in the process, things are moving quickly. There’s a chance that by the time you’re reading this post, some real changes might have happened (if they did, we’ll update you!).

Post Grant Review

This is probably the most important issue that remains up in the air. As part of the last update to patent law, 2011’s America Invents Act, Congress created a procedure called inter partes review (IPR). IPRs allow a party to challenge a patent’s validity at the Patent Office instead of in court. They move quickly, within a year, and are considerably cheaper than litigation. While IPRs remain too expensive for most small startups (with legal fees, an IPR can easily cost upward of $250,000), they represent smart policy that helps rid the world of bad patents. So far the procedure has been successful.

Significant changes to IPR were not originally part of the Senate’s PATENT Act. We wish that were still the case. Yet it appears that IPR is now on the table (more of our thoughts on that here) as some reform opponents from the pharmaceutical industry have conditioned their support on this issue.This is where the process gets a bit strange. Senators who support litigation reform are hard at work trying to hammer out a compromise on IPR that will get the PATENT Act out of committee tomorrow with a wide vote margin, which we support. But, in the meantime, they have left a “placeholder” in the bill to clean up the language around IPR. This might explain why many of us who have long supported reform are not cheerleading as much as usual—not because we don’t support the PATENT Act per se (we still do), but because we actually haven’t seen the final language and, until we do, it’s hard to know whether this will be a full win for startups.

In the meantime, we will keep working to ensure IPR remains a strong and viable option to clear the system of low-quality patents while not ceding ground on the litigation reforms at the heart of the PATENT Act. Those reforms, of course, are the core of what will protect startups and successfully address a patent troll problem that has grown out of control.

Check us out on Twitter where we'll be following the situation closely and updating accordingly.