Hopefully the current patent reform effort to address perceived patent litigation abuse problems will result in carefully targeted tweaks to–without harming–our otherwise thriving U.S. patent system, the greatest system for innovation that the world has ever known (see our Patent Forest post).  The Senate is currently considering this balance.  The Senate Judiciary Committee was scheduled to mark-up and vote on a proposed bill designed to curb perceived litigation abuses by non-practicing entities (what some refer to as patent “trolls”) last Thursday but the vote was postponed to give Committee members and their staff time to continue working on language that strikes a balance between protecting the rights of patent holders to pursue good faith claims of infringement and reducing the alleged bad faith tactics of non-practicing entities.  According to Senator Leahy (D-Vt.), the bill’s sponsor, a proposed provision aimed at reducing the ability of non-practicing entities to hide behind shell corporations in order to be judgment proof had proven to be “complicated.”  However, the Senator noted that the bill had bipartisan support.

The Committee pushed the vote to Tuesday, April 8, however it was again postponed.  According to published reports, Democrats circulated revisions of the bill to the Committee but have yet to receive feedback from Republican members.  The Committee will attempt to mark-up the bill on April 10.

As we discussed in a prior post, the proposed bill would require patent-plaintiffs to disclose ownership information for asserted patents at the outset of infringement litigation.  The bill would also require courts to stay infringement suits against customers of infringing products or processes if the manufacturer and customer consent, the manufacturer is a party to an action involving the same patents or product(s), the customer agrees to be bound by the result of the manufacturer’s litigation, and the motion for stay is filed within a specified time early in the case.

The bill would also expressly grant the Federal Trade Commission authority to investigate and bring enforcement actions against patent holders that engage in unfair and deceptive acts and practices in connection with demand letters to accused infringers.

Late last year, the House of Representatives passed a competing bill that would impose heightened pleading standards for patent infringement complaints and also require a patent-plaintiff to plead       “[w]hether a standard-setting body has specifically declared such patent to be essential, potentially essential, or having potential to become essential to that standard-setting body.”  As we have discussed before, SSOs generally do not declare patents essential or potentially essential to their standards.  Rather, declarations of essentiality are usually made by the patent owners themselves in letters of assurances or similar disclosures. However, these disclosures frequently do not declare whether the patent covers the standard, but assert that it might cover the standard and set forth the obligations the patent owner agrees to if the patent actually is essential to the standard.