Groups react to Obama’s latest actions on patent reform

WASHINGTON (Legal Newsline) — Business groups from across the nation — even the world’s largest software maker, Microsoft — have weighed in following the White House’s announcement of three new executive actions aimed at targeting so-called “patent trolls.”

For the most part, the groups are lauding the Obama administration’s newest efforts to rein in abusive litigation practices and beef up the country’s patent system.

Obama

But some admit the executive actions, alone, won’t be enough.

The National Retail Federation, for one, said patent litigation reform will require “tough policy choices and decisions.”

“The National Retail Federation credits the administration’s attention to strengthening the United States patent system and proposing a series of measures aimed at protecting Main Street retailers and restaurants from abusive patent trolls,” NRF Senior Vice President David French said. “The President has recognized the economic harm caused by patent trolls, and we welcome the administration’s leadership on this priority.

“Further transparency, clarity, education and enforcement are all welcome steps for the nation’s business community.”

But French said the power ultimately rests with Congress.

“Congress needs to act this year on patent reform and address the lingering questions around demand letter transparency, the customer stay provision and expanded covered business method patents in order to fully protect local shops and stores from costly and abusive patent troll lawsuits,” he said.

“The administration has created a path forward for Congress to address patent trolls and we urge them to take up that responsibility now.”

So far, the Innovation Act, introduced by U.S. Rep. Bob Goodlatte, R-Va., has gained the most traction. In December, the House passed it with overwhelming bipartisan support.

However, it has been lingering for months in the Senate, where lawmakers are carefully considering it.

U.S. Sen. Patrick Leahy, D-Vt., introduced his own measure, the Patent Transparency and Improvements Act. The bill, considered by some to be a “less ambitious” version of the Innovation Act, was assigned to a congressional committee in November but has failed to move.

The National Venture Capital Association, which also attended last week’s White House announcement and participated in a roundtable discussion with senior administration officials, agreed the problem must be addressed.

However, Bobby Franklin, NVCA’s president and CEO, said coming up with a precise solution that meets the needs of some while also maximizing serious, unintended consequences to others is “extremely complex.”

“The general consensus of the venture capital industry is that patent trolls create inefficiencies and undermine innovation, threatening the startup ecosystem and diverting precious financial resources away from job creation,” he said.

“NVCA believes it is paramount that changes to the patent system be made in a measured and judiciously considered manner, because almost any such change is likely to alter the risk/benefit equation in ways that affect individual companies and specific industries in different ways.

“Our goal continues to be crafting a solution that meets the dual test of helping startups targeted by trolls while maintaining strong protections for startups that must defend their intellectual property from large, entrenched interests.”

The newly-formed Main Street Patent Coalition, which claims to represent more than a dozen trade associations, companies and small businesses, also participated in last week’s discussion at the White House.

Spokesman Michael Meehan called it a “valuable opportunity” for businesses.

“The Main Street Patent Coalition appreciates the administration’s continued leadership and outspoken support of comprehensive reforms,” he said.

“Main Street businesses have a significant stake in this debate and are committed to the fight against patent trolls.”

Horacio Gutierrez, deputy general counsel and corporate vice president for Legal and Corporate Affairs at Microsoft, also weighed in, saying the company “applauds and supports” the administration’s newest efforts.

“The U.S. patent system is the engine for our economy, incentivizing the creation of new technologies that are essential to America’s ability to compete in markets around the world,” he wrote in a blog post. “All stakeholders, including those of us in the private sector, have a key role to play in keeping this system healthy.”

The company said it is already doing its part — by making its patent-related information easily accessible to and searchable by patent examiners.

Last year, Microsoft launched its Patent Tracker Tool, a publicly-available, searchable online database of its more than 37,000 issued patents.

“That same commitment to transparency and quality has driven our efforts to make prior art information more easily accessible to the (U.S. Patent and Trademark Office),” Gutierrez wrote.

“Prior art” is information made available to the public in any form before a given date that might be relevant to a patent’s claims of originality.

If an invention has been described in the prior art, a patent on that invention is invalid.

Often, this information can be difficult to find.

Microsoft, this fall, launched its own prior art initiative to help solve this problem.

“We began the process of uploading our extensive archive of information, not readily available to the public, that might serve as prior art,” Gutierrez said. “Already we have made the database of 1.8 million documents available to patent examiners — for free and in a searchable format — while the site is in the live-beta phase.

“In the coming months, the database will be customized with new features, functionalities and documents that will improve the utility of the service.”

The service will be available to all patent examiners by May, according to the company.

From Legal Newsline: Reach Jessica Karmasek by email at patents@legalnewsline.com.