The debate over patent lawsuit reform reached a fever pitch in Washington, D.C., Wednesday, with Kayak Software Corp. deputy general counsel Benjamin Berman singling out patent-holding company Intellectual Ventures Management LLC as a problem that Congress needs to fix.
Speaking at “The Great Patent Debate,” a panel discussion on reforming the U.S. patent system, Berman said he is troubled by the business of Intellectual Ventures, which its critics consider one of America’s largest patent trolls. After pointing his finger at Russell Merbeth, who attended the event as the top lobbyist for Intellectual Ventures, Berman said he came very close to signing a licensing agreement for 10,000 of the company’s patents after it sent letters to Kayak asking for the deal. Berman said he walked away from the deal after Intellectual Ventures left open the possibility of more licensing agreement requests in the future.
Patent trolls are “today’s mafia,” Berman told a crowd of dozens gathered in the Newseum for the discussion hosted by POLITICO and the Main Street Patent Coalition, an association of business groups that support reform.
“It’s extortion at its finest,” he said of the business model used by Intellectual Ventures and similar companies. “It’s egregious. It’s not at all what the patent industry was about. The patent industry is about innovation. It’s about jobs. It’s about the economy.”
Merbeth didn’t comment on his company’s interactions with Kayak. But he urged Congress to be careful as it works to curb abusive patent litigation.
“There should be more time taken to make sure that the rights of patent holders are not unreasonably and unfairly trampled in a headlong rush toward some kind of action that may or may not actually address the root cause of the problem,” Merbeth said.
The House and Senate both have patent lawsuit reform bills pending. The House’s main measure, the Innovation Act, cleared the chamber in December. The Senate’s leading legislation, the Patent Transparency and Improvements Act, is before the Senate Judiciary Committee. Panel chairman Patrick Leahy, D-Vt., who introduced the measure with Sen. Mike Lee, R-Utah, announced Tuesday that he plans to have his committee mark up the bill this month.
Both of the measures would bolster pleading requirements to increase the transparency of entities that either allege infringement or have a financial interest in the case. The bills also address patent troll demand letters, which make vague claims of patent infringement due to the use of a product or service and call for a payment from the end user to avoid litigation. The legislative measures explain that sending the letters is a deceptive act.
But only the House bill would require the litigation’s loser to pay for the high-cost patent fight, an approach known as “fee shifting.”
Lee, who also spoke during the patent reform discussion, said the Senate approving legislation without fee shifting would be “ironic” and “unfortunate” given the ability of the House to include it in a bill that passed on a bipartisan vote. He said the Senate could add fee-shifting language from legislation proposed by Sen. John Cornyn, R-Texas, into PTIA.
Berman said he supports fee shifting, noting that “we have to have this.” Merbeth, however, said fee shifting could discourage businesses from enforcing their patent rights.
“I think fee shifting is one of the tougher nuts in this whole debate,” Merbeth said.