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Senate judiciary takes up patent reform this week

Patent troll bills making a comeback in Congress

Sen. Chuck Grassley (R-Iowa)

The Senate judiciary committee will hold a hearing Wednesday to take up patent reform.

New legislation to swat back abusive practices by patent assertion entities–companies which hold patents solely to assert intellectual property claims–was well on its way to becoming law until it was scuttled in the Senate late last year.

With the new Congress, action has picked right back up.

The hearing Wednesday, titled “The impact of abusive patent litigation practices on the American economy” revives the efforts made last year by Judiciary chairman Chuck Grassley (R-Iowa), ranking member Patrick Leahy (D-Vt.), and Sen. Chuck Schumer (D-N.Y.).

House judiciary chairman Bob Goodlatte (R-Va.) re-introduced last month the Innovation Act, a bill that sailed through the House in late 2013. The Innovation Act would require patent assertion entities to be more transparent in seeking licenses and shift legal fees in the event of a frivolous claim.

Earlier this month, Sens. Chris Coons (D-Del.), Dick Durbin (D-Ill.) and Mazie Hirono (D-Hawaii) introduced the STRONG Patents Act (for Support Technology and Research for Our Nation’s Growth). The bill has fewer reforms than the House measure, but it would crack down on abusive demand letters and change the process at the U.S. PTO for challenging patents.

Ad agencies–particularly digital ad agencies—are frequent victims of patent troll demand letters for the software and tools they use for client websites and online ad campaigns.

The American Association of Advertising Agencies, which has lobbied hard for reform, often highlights the $30 billion price tag to U.S. companies from patent abuse for financial gain.

If Congress can pass a bipartisan bill, President Obama has indicated he will sign it.  “Let’s pass a patent reform bill that allows our businesses to stay focused on innovation, not costly, needless litigation,” said the President in his 2014 State of the Union address.