WASHINGTON – Yesterday, the Senate Committee on Small Business and Entrepreneurship held a hearing titled, “Patent Reform: Protecting Innovation and Entrepreneurship.” The hearing – the second this week to address patent reform – examined how abusive patent trolls harm innovation, as well as possible legislative solutions to this problem that would balance the interests of small business patent holders with the need to reform abuse in the patent system.

Specifically, committee members looked at several possible legislative reforms, including fee shifting, which would place the costs of a patent infringement case on the loser; joinder, which would allow the inclusion of additional parties into a lawsuit; and the need to enhance specificity and transparency in patent demand letters.

During the hearing, Senators Mazie Hirono (D-HI) and Chris Coons (D-DE) spoke in favor of their patent reform bill, the STRONG Patents Act (S. 632), which they described as a targeted and measured approach to patent litigation reform. In their view, the bill is a better vehicle for reform as compared to the “overbroad” Innovation Act (H.R. 9), the current House patent reform bill. NACS disagrees. The bill favored by Hirono and Coons is supported by notorious patent trolls who want to block any real reform. 

Rather, NACS expects the soon-to-be introduced bill from Senate Judiciary Chairman Chuck  Grassley (R-IA) and Senators John Cornyn (R-TX), Patrick Leahy (D-VT), and Chuck Schumer (D-NY), to be a much more effective approach to patent reform.  While reform advocates eagerly await the Grassley/Cornyn/Schumer/Leahy bill, patent reform will continue to move forward in the House when the Judiciary Subcommittee on Courts, Intellectual Property and the Internet holds a patent reform hearing on March 25.

NACS and the United for Patent Reform Coalition support the Innovation Act. NACS is an executive committee member of the Coalition because many of its members have been victims of frivolous lawsuits and demand letters initiated by patent trolls. These are essentially shakedowns that take up NACS members’ time and money.

Five witnesses testified before the Committee: Craig Bandes, president and CEO of Pixelligent Technologies; Rachel King, CEO of GlycoMimetics; Tim Molino, director of policy at BSA - The Software Alliance; Robert Schmidt, co-chair of the Small Business Technology Council; and David Winwood, president-elect of the Association of University Technology Managers and the chief business development officer for Louisiana State University’s Pennington Biomedical Research Center.