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Senate Weighs Fee Shifting Provision in Patent Reform Legislation

December 19, 2013 | Posted in : Expenses / Costs, Legislation / Politics, Prevailing Party Issues

A recent Corporate Counsel story, “Senate Weighs Fee Shifting in Anti-Patent Troll Bills,” reports that business leaders urged the Senate Judiciary Committee to include fee shifting in legislation it’s debating to combat abusive litigation from patent trolls.  Speaking at a hearing the panel held on patent lawsuit reform, representatives of the Credit Union National Association, Printing Industries of America and Adobe Systems Inc. said provisions that called for the loser patent litigation to pay for court expenses are necessary to effectively fight patent trolls.

Dana Rao, Adobe’s vice president and associate general counsel for intellectual property litigation, said the Senate measure doesn’t properly address patent troll abuses without tools that include fee shifting.  “In order to disrupt the patent troll problem that we have today, we have to look at the economics,” Rao said, “and the economics are: They face no risk from bringing these lawsuits.”

Not all witnesses at the hearing thought Congress must legislate on fee shifting, however.  Phillip Johnson, Johnson & Johnson Services Inc.’s senior vice president and chief intellectual property counsel, said he supports fee shifting as a tool to combat trolls.  But he said Congress might want to wait until the U.S. Supreme Court in February takes up patent cases Octane Fitness LLC v. ICON Health & Fitness Inc. and Highmark Inc. v. Allcare Health Management Systems, both of which concern fee shifting.  “By waiting for the Supreme Court to act, you’ll be able to decide whether the way that they’ve acted is a bitter way to go forward than whatever legislation you may wish to write,” Johnson said.

The Senate’s version of the patent reform legislation is called the Patent Transparency and Improvements Act.  The House passed its version, the Innovation Act, which has a fee shifting provision.