Legal Issues

Is Congress Trying to Fix the Wrong Patent Problem?


Senator Charles Schumer (D-N.Y.) on March 26

Photograph by J. Scott Applewhite/AP Photo

Senator Charles Schumer (D-N.Y.) on March 26

If all goes according to plan, the U.S. Senate will take up the legislative attack against frivolous patent litigation that passed the House in December. But those pushing the fight against so-called patent trolls are already expressing doubts that legislation to make patent lawsuits fairer will get to the underlying problem.

One of the loudest voices for patent reform in the Senate is New York’s Charles Schumer. In a Web panel on Tuesday, Schumer said the Senate would be close to passing a bill by the end of May. But Schumer also argued that software patents can be “very easily abused,” and continued to push a reform idea that could potentially derail the process.

As part of an earlier round of patent reform, Schumer championed a program allowing defendants to challenge the validity of certain patents related to financial services. The senator has always been close to Wall Street, but he’s now enthusiastically selling himself as the advocate for New York’s burgeoning tech scene. With Internet startups complaining about patents, he wants to expand the patent-challenging program to software as well. But this idea has powerful enemies, and the bill in the House was passed only after its removal. Reintroducing patent challenges and expanding the concept from finance to software would likely provoke a wider fight.

Schumer claims he would oppose a bill that was too watered down, although he didn’t make clear exactly what criteria he’d use to make that call. “The worry I have here is that if we can’t come to an agreement, a compromise, that instead of nothing we would pass a bill that does nothing, which is worse,” he said.

Others are calling for changes in the U.S. Patent and Trademark Office to keep problematic patents from being issued in the first place. At a Bloomberg Government event on Tuesday morning, Representative Thomas Massie (R-Ky.) said reformers in Congress should tackle the issuance of broad, vague patents before trying to change the way patent lawsuits work. The decision to flip this around says more about the legislative body than the patent system: “There are a lot of lawyers in Congress,” Massie said, “and when you have a hammer, everything looks like a nail.”

Many critics contend that some software patents are so abstract that they can be used to pursue legal action against practically any tech company. Brad Burnham of venture capital firm Union Square Ventures said that the only way companies he invests in can avoid getting sued is to be small enough to avoid attracting any attention.

Congress isn’t the only branch of the federal government mulling this issue. On Monday, the Supreme Court took up the issue of software patents for the first time in decades, in a dispute over whether a patent related to a computerized trading system is too abstract to deserve legal protection.

Brustein is a writer for Businessweek.com in New York.

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