House Won't Vote on Patent Bill Before August Recess

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By James Rowley and Susan Decker

July 21 — Legislation backed by some technology companies to curb nuisance patent suits will not be voted on in Congress this summer amid opposition from a conservative organization and demands for change from some businesses.

“I don’t have anything scheduled between then and now,” House Majority Leader Kevin McCarthy (R-Calif.) said, referring to the month-long August recess that begins July 31. “I think there’s more work to be done on [the bill, H.R. 9].”

Senate Majority Whip John Cornyn (R-Texas), a drafter of the Senate version, said a companion bill (S. 1137) may face a vote “hopefully after August.”

Supporters of the legislation, including Google Inc., Cisco Systems Inc., Rackspace Hosting Inc. and retailers, had been hoping for passage as early as this week after a similar bill passed the previous session of Congress with overwhelming support.

Bills in both houses would require patent owners to provide more information on infringement claims and make it more likely than today that the loser would pay the winner's legal fees. The goal is to make it cheaper and easier to fend of lawsuits in which owners of low-quality patents try to use the court system's complexity to extract cash from businesses.

Universities and some patent-heavy tech companies such as Qualcomm Inc. warn the provisions might be too onerous for small companies trying to protect products from copycats. Venture capital firms are split over the bill.

'Death Squad.'

The drug and biotechnology industries are pushing for a separate provision that would insulate their members from reviews at the U.S. Patent and Trademark Office of already issued patents. That procedure has been called a “death squad” due to the high rate of patent cancellations.

Last week, House Judiciary Chairman Bob Goodlatte (R-Va.) was given a week to drum up support for the bill and said it was “clear some members still have concerns.”

The tug of war between limiting lawsuits and promoting innovation has historically crossed party lines, with politicians more likely to take positions based on which companies are in their districts.

It has become political. Heritage Action, a group that lobbies for what it calls “conservative policy visions,” on Monday came out against H.R. 9, saying the patent system should instead take time to adjust to changes created in a sweeping 2011 overhaul—the America Invents Act.

To contact the reporters on this story: James Rowley in Washington at jarowley@bloomberg.net; Susan Decker in Washington at sdecker1@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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