Senate committee backs bill that targets patent trolls

U.S. Congress Washington DC

The legislation aimes to protect businesses from abusive patent lawsuits

A U.S. Senate committee has voted to approve a bill aimed at curbing abusive lawsuits by so-called patent trolls.

The bipartisan Protecting American Talent and Entrepreneurship (PATENT) Act, introduced in late April, now heads to the full Senate for consideration after the Senate Judiciary Committee vote Thursday.

The bill targets patent-holding companies that use infringement lawsuits as a primary business model. It would require judges to award attorney fees to defendants or plaintiffs in patent infringement lawsuits when the court finds the other side acted unreasonably.

It also requires that companies sending patent licensing demand letters provide details of the alleged infringement, not "vague" demands. The bill would also delay expensive discovery procedures in some patent infringement lawsuits, and it would shield customers using allegedly infringing products from lawsuits.

Several technology groups have praised legislation targeting patent trolls, but others have suggested the bills would hurt the ability of small patent holders to file lawsuits against infringers.

The bill still needs "significant work," said Brian Pomper, executive director of the Innovation Alliance, representing tech and manufacturing companies. The bill leaves open the potential for abuse of the customer lawsuit provision, and it includes overly broad discovery provisions, he said in a statement.

"We can strengthen our patent laws without undermining intellectual property rights and crippling a system that is so important to incentivizing innovation and job creation in our country," Pomper added.

Sponsors are open to changing the bill as it moves to the full Senate, said Senator Chuck Grassley, an Iowa Republican and main sponsor of the PATENT Act. The committee tried to "strike the right balance" between ongoing patent reforms at the U.S. Patent and Trademark Office and concerns about abusive patent lawsuits, he said during Thursday's hearing.

Some "good-faith negotiations" on the bill continue, Grassley added.

The Consumer Electronics Association praised the bill, saying in a statement that it "closes the legal loopholes used by patent trolls -- the individuals and companies that don't invent or manufacture anything useful, but rather abuse our patent system and extort American innovators."

A similar bill was introduced in February in the House of Representatives.

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