The Innovation Act to combat abusive patent lawsuits is expected to pass the House Judiciary Committee Wednesday, highlighting a growing push on the subject from Internet and communications companies, which topped the list in lobbying contributions on the topic thus far in 2013.
House Judiciary Committee Chairman Bob Goodlatte, R-Va., introduced the legislation in October to protect tech innovators and small businesses from "patent trolling," during which an entity uses a patent not to build or improve an invention, but to threaten businesses with infringement lawsuits to extort a settlement as an alternative to expensive litigation. The effort gained support on Monday when Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., and Sen. Mike Lee, R-Utah, introduced a companion bill in the Senate called the Patent Transparency and Improvements Act of 2013.
"When small businesses in Vermont and across the country are threatened with lawsuits for offering wi-fi to their customers or using document scanners in their offices, we can all agree the system is not being used as intended," Leahy said in a statement.
This momentum on the issue reflects the growing influence by Silicon Valley companies. Technology companies pushed hard for new laws to combat patent trolling, which has stalled production of tech devices by embroiling patented technology in lawsuits. The top four contributors pushing for new patent laws in 2013 are Google, Clear Channel Communications, Microsoft, and the Recording Industry Association of America, according to lobbying data made public by the Senate. Intel, Yahoo and Motorola Mobility, which is owned by Google, are also among the top lobbying groups on the issue thus far in 2013, according to the data.
Goodlatte's bill makes patent trolling more difficult by including steps to decrease the litigation burdens on companies that are sued and increase the due diligence and transparency requirements of a company that makes a patent lawsuit. The bill also includes other measures to help small businesses prepare to defend themselves in a patent lawsuit.
Computer and Internet companies, led by tech giants like Google, are one of the few sectors that has consecutively increased lobbying in recent years, says Sarah Bryner, research director at the Center for Responsive Politics, a nonpartisan organization that tracks the role of money in politics. So far in 2013 these Silicon Valley companies have contributed "about $105 million" to lobbying efforts, Bryner says, citing lobbying data collected from the companies.
"There is an overall negative trend in lobbying, and the computer companies and Internet companies are bucking that trend, and it looks like they will continue to do so this year," Bryner says.
Peter Cleveland, director of Global Public Policy at Intel, one of the companies that worked with Goodlatte on the bill, says "the chances are reasonably good," that legislation on patent reform will reach President Barack Obama by the 2014 election.
"Democrats and Republicans know what the patent issues are and they are working in good faith to resolve their issues," Cleveland explains.
Silicon Valley companies including Intel, Google and Apple have stepped up their lobbying because Internet and smartphone use is growing and provides economic opportunity. This in turn has the potential for bipartisan solutions in Congress to "reduce regulations and reduce tax burdens" to allow that industry to prosper and create jobs, Cleveland says.
"All of us [companies] have invested more money, more people, more lobbying expertise on a broad range of issues, including in cybersecurity, international trade, patent reform, immigration; all of these issues affect our bottom line to the tune of hundreds of millions of dollars," Cleveland says. "These issues are vital to the American economy and these are wildly successful companies."