Senate Subcommittee Hears Differing Views on Bill Meant to Strengthen Patents

Tech industry representatives and experts disagreed about the wisdom of legislation from Sen. Chris Coons, D-Del., to “strengthen” the U.S. patent system. Introduced in July, the Support Technology and Research for Our Nation's Growth and Economic Resilience (Stronger) Patents Act (S-2082) would alter the Patent and Trademark Office inter partes review system and partially reverse the Supreme Court’s 2016 eBay decision.

During a Senate Intellectual Property Subcommittee hearing, Chairman Thom Tillis, R-N.C., raised concerns about the impact on IP rights. He voiced concerns about automatic presumption of injunctive relief and empowering patent trolls to stifle innovation. EBay v. MercExchange decided permanent injunctions in patent cases shouldn’t be granted automatically.

Ranking member Coons cited “small areas” of disagreement that experts need to weigh, to “sharpen” legislative approaches. Reliable, enforceable patent rights are the lifeblood of the economy, he said. His bill has three Republican and two Democratic co-sponsors. Rep. Steve Stivers, R-Ohio, and Bill Foster, D-Ill., introduced companion legislation.

The legislation is unwise, said University of Minnesota Law School professor Tom Cotter. Since eBay, courts have granted injunctive relief in about 75 percent of cases in which the prevailing patent owners sought relief, he said.

Erosion of exclusive patent rights incentivized accused infringers to unfairly prolong disputes over valid patents, said InterDigital General Patent Counsel Bradley Ditty in support of the legislation. Since the ruling, permanent injunctions diminished significantly, he said.

The bill would do more harm than good, said Cisco IP Vice President Dan Lang, making it harder for patent owners to win IPR cases. It gives challenged patents a presumption of validity that can be overcome only by clear and convincing evidence rather than a preponderance of evidence as in the Leahy–Smith America Invents Act, he said. Weakening the IPR system and liberalizing granting of injunctions would incentivize groups to buy weak patents and use them to extort settlements, he argued.

The proposal brings change to uncertainty and instability, said George Mason University law professor Adam Mossoff. It would improve the Patent Trial and Appeal Board, which he described as the death squad for patents that created a tilted playing field against patent owners. PTO Director Andrei Iancu has revised the PTAB, but another director can reverse all of that, the professor said, backing structural changes by Congress.

The ruling's reversal would return the U.S. to a litigation system that rewards abuse of the patent system based on a test that’s never been applied anywhere in U.S. law, said Computer and Communications Industry Association patent counsel Josh Landau. PTO has proper discretion to determine if petitions are meritless under the IPR system, he said.

Tillis and Coons cited legislation they’re working on that would apply to Patent Act sections 101 and 112 (see 1906050076). Subcommittee leaders met with PTO recently to talk about 112 and 101 concerns, Tillis told reporters. They continue speaking with attorneys about “getting the proper language.” Coons said he’s working with Tillis to refine and improve the legislative text to satisfy stakeholders.