Are Republicans Abandoning Patent Reform?

Congressman Kevin McCarthy (R-CA)

On August 8, 2014, Congressman Kevin McCarthy (R-CA), the newly minted Majority Leader in the United States House of Representatives, explained that the 44 “jobs bills” passed by the House and dead in the Senate would be voted out once again by the House as part of one big jobs bill. See McCarthy Sets up Votes on Messaging Bills Ahead of Midterms. According to Speaker.gov, one of the bills that is a “jobs bill” that was dead in the Senate was the Innovation Act, sometimes referred to in the industry as the Goodlatte Bill, which would have among other things enacted fee shifting legislation and expanded post grant review of patents. See House Passes Innovation Act and also IPWatchdog coverage of the Innovation Act.

Of course, the Innovation Act has absolutely nothing to do with jobs, job creation, job retention or spurring the economy in any way, but save that issue for another day.

Congress has now returned to Washington, DC, which may or may not be a good thing depending upon your point of view. Regardless, there are very few active work days between now and when Congress will recess for the final stretch run to the midterm elections. Leading up to Congress returning McCarthy sent a memorandum to House Republicans on September 4, 2014, a copy of which was obtained by Breitbart. In this iteration of the Republican strategy there are 14 jobs bills mentioned and the Innovation Act is not among them.

The only innovation related bill that seems to be on the Republican agenda for September 2014 is a bill that H.R. 4438, the American Research and Competitiveness Act, authored by Congressman Kevin Brady (R-TX), which makes the research and development Tax Credit permanent. The bill touts that it will pave the way for increased innovation and investment in the United States, which does seem like a fair claim. It also seems legitimate to call this a jobs/economy related bill since pro-investment tax policy historically does have a net positive economic effect.

Thus, in the few planned work days during September 2014, it does not seem as if the House of Representatives will take up the Innovation Act or any modifications thereto that might sweeten the bill for the Senate. So what happened between August 8, 2014, when the Innovation Act was going to be a piece of an omnibus jobs bill that would help define the messaging for House Republicans leading into the midterm elections and September 4, 2014, when it was removed from consideration as an important piece of the Republican jobs agenda?

[Varsity-4]

Why would the Republicans retreat from the patent bill at this time? Does this signal a change of heart by the House Republican Leadership? Is McCarthy saying now that Senate was right on patents and that President Obama is wrong? Once upon a time Republicans were talking about the evil of patent trolls and how something needed to be done to stop them. Have they become satisfied that the patent troll problem wasn’t as bad as the tech sector ever said it was, or have they finally figured out that not every non-practicing entity is a patent troll? See Who is a Patent Troll.

I’m sure that McCarthy knows that none of these “jobs bills,” or any other “messaging bills” will havea  vote in the Senate over the next few weeks leading up to the midterm elections, so what is there to lose including the patent bill (or a version thereof) as a part of this jobs/economy package? After all, the Innovation Act passed by a vote of 325-91, which means it gained widespread support from both sides of the aisle.

Patent legislation is one of those peculiar bi-partisan pieces of legislation in what is increasingly a hyper-partisan town. But over the last decade as patent legislation, typically misrepresented as “patent reform legislation, has had meaningful and powerful constituencies on different sides arguing over even the most basic provisions. Truthfully, almost all of the legislative patent reform in recent memory was really nothing more than “patent change legislation,” but that change can and does negatively impact large segments of the innovative community. The Innovation Act was no different.

The one distinction with the Innovation Act was that there was a strong chorus of patent reformers who counseled caution given the fact that the America Invents Act is not even three years old. The most meaningful changes to patent law and process under the AIA were phased in on September 16, 2012, and then on March 16, 2013, so the dramatic transformation of the U.S. patent system is less then two years old.

Caution makes sense because with the major changes that were undertaken it is all but certain that there will be significant unintended consequences. That caution counsel won the day in the Senate when the U.S. Supreme Court made it easier for district courts to issue attorneys fees and more difficult for the Federal Circuit to overturn those attorney fee awards.

With big donors on both sides of the issue there is great risk for politicians. The patent system is not an issue that will drive voters, but it is an issue that can keep checkbooks from being opened. But if the issue continues into another Congress and there is hope that Congress can be persuaded to the side of right (defined by whatever side you are on) then you will write checks and try and influence decision making. That is the name of the game in the District.

The cynical, as well as astute political observers, notice that it typically takes 7+ years to get a patent bill across the finish line. So why pass something now when you might be able to milk the patent issue for another 5+ years?

 

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6 comments so far.

  • [Avatar for Randy Landreneau]
    Randy Landreneau
    September 18, 2014 10:43 am

    Anon and Cowboy,

    There is a specific thing wanted by many Republican Senators and Representatives that is a key obstacle to our winning this war – Tort Reform. They see “Loser Pays” in patent litigation as the first step toward having “Loser Pays” in other litigation. If you wonder how Republicans could even consider “Loser Pays” in patent litigation when it would destroy the ability of a typical inventor to defend a patent, it boils down to the desire for Tort Reform (and dishonest, misleading Patent Troll propaganda). Of course, there is a huge difference between defending one’s intellectual property rights and suing someone because they caused you injury. With a majority of Republicans coming, this will be trouble.

    Randy Landreneau
    Independent Inventors of America

  • [Avatar for Charlie]
    Charlie
    September 17, 2014 05:24 pm

    Perhaps more appropriately from Julius Caesar:

    “Now let it work. Mischief, thou art afoot.
    Take thou what course thou wilt!”

  • [Avatar for Anon2]
    Anon2
    September 17, 2014 12:53 pm

    Anon
    Bravo!

    That would make a great montage/opening sequence to a very tragic film about the downfall of America… and the rise of the USSA… at some point a voiceover: “Curiously, to some, but all to clearly to others, it all started with Patents…”

  • [Avatar for EG]
    EG
    September 17, 2014 12:27 pm

    Anon,

    How about one by General Chang: “Cry havoc!, and let slip the Dogs of War.” Also, from Act 3, Scene 1, Julius Caesar by Shakespeare’s

  • [Avatar for Anon]
    Anon
    September 17, 2014 10:52 am

    I chuckle (with sad irony) at your post American Cowboy, but I would paint the players a little differently – and with a little more complexity.

    Player One: the inventor. Most often (but not exclusively) the one that wants to have “the money” (but does not have it now). This is ESPECIALLY true in instances of disruptive innovation – the very type of innovation that a strong patent system protects.

    Player Two: Established entities (typically, but again, perhaps not exclusively) Large Corp (who also typically, but not exclusively) is Large INTERNATIONAL Corp, with no true single nation allegiance. Some of these players are perfectly willing to use the existing patent system for what they can milk out of it, all the while attempting to change the patent system so that it is less threatening to their established base of power.

    Player Three: The largely “Left” political leaning academics, who attempt to shape the landscape of the patent discussion, and who (typically, but again, perhaps not exclusively) look to ANY property, and especially personal property, as something that gets in the way of Utopia.

    Player Four: BOTH the republicans and the democrats, who are, after all,and under a thin skin of differences, both of the species Politician.

    Player Five: the so-called Royal Nine, who actively seek to preserve their ability to set legal policy in their decisions, and who are only too willing to take advantage of the malaise and vacuum of power within the realm of writing patent law that the species of Politician has so graciously provided.

    And of course, there are other players that are possibly drawn (correctly or incorrectly): the patent bar (as either heros, neutrals, or villains), the technocrats (as mere dupes and koolaid drinkers of Large Corp, or as would-be, but woefully misguided heros), and even the “Trolls” (often cast in a pure evil light, while neglecting the benefits of defusing the Large Corp Patent Nuclear Warfare mode).

    The stage? Why that is the law itself.

    I am sure that some Shakespeare quote is appropriate here. Who can supply the best one?

  • [Avatar for American Cowboy]
    American Cowboy
    September 17, 2014 09:32 am

    In the patent wars, the sides are “the inventors” vs “the guys and gals with money.”
    Unfortunately, the Republicans side with the guys and gals with money.
    Also unfortunately, despite their rhetoric, the Democrats side with the guys and gas with money.