I am pleased to have the following guest post from David Balto. David Balto is the former Policy Director of the Federal Trade Commission. He represents retailers in IP and antitrust issues before the courts, Congress and regulatory agencies.
December was a busy month in the fight against patent trolls. Retailers represented their interests in fighting patent troll abuses in all three branches of the government. Retailers weighed in before Congress on key legislation, before the FTC on their industry wide investigation, and the Supreme Court.
Congress has been very busy trying to push through patent reform to stop patent troll abuse. On December 5, the House passed the Innovation Act by a wide margin. The Innovation Act allows for fee shifting to patent trolls, creates heightened pleading requirements, permits courts to limit discovery until after claim construction to lower costs, as well as many other provisions aimed at patent trolls. The Senate Judiciary Committee has also been hard at work and currently has four bills introduced on the patent troll issue. The Senate Judiciary Committee held an extensive hearing on the patent troll issue on December 17, and many Senators were vocal about ending patent troll abuse. The Food Marketing Institute submitted written testimony supporting patent reform and small businesses were represented on the panel by the Printing Industry of America. Senators were very receptive to retailer issues concerning patent trolls.
The Federal Trade Commission has proposed a 6(b) study of patent troll business practices. Section 6(b) of the FTC Act gives the FTC broad powers to issue subpoenas to request information from industry participants to investigate market practices. This power has previously led to critical reforms and also assists the government in enforcing current laws. The FTC accepted public comments on the study and retail groups were at the forefront of calling for a tough and thorough study — retail groups such as the Food Marketing Institute, the Retail Industry Leaders Association, the National Restaurant Association, and the National Retail Federation weighed in. The FTC’s next step is to submit its proposal and comments to the Office of Management and Budget for review and the retailer advocacy will play an important role and will undoubtedly aid the FTC in getting a comprehensive study on patent trolls approved.
On December 9 the Supreme Court accepted amicus briefs in one of at least two cases this term that will decide issues important to the fight against patent trolls. Octane Fitness v. Icon Health and Fitness could reverse precedent that makes it nearly impossible for a defendant to recover attorney’s fees in a patent case. If the Supreme Court makes it easier for patent troll victims to recover attorney’s fees it would remove much of the leverage patent trolls wield to coerce settlements. The Food Marketing Institute submitted the only amicus brief representing retailer interests on this issue. This brief should go far to educating the Supreme Court on the problems facing retailers in troll litigation.
December was a successful month, but there is still much to accomplish. Legislation needs to be passed, the Federal Trade Commission needs to be more active in fighting patent troll abuse, and the Supreme Court will be accepting amicus briefs late January in Alice Corp. v. CLS Bank, another important case that concerns subject matter patentability. Retailers will continue to play a vital role in ending patent troll abuse through thoughtful advocacy before all three branches of the government.