Despite recent FTC’s disapproval of its lobbyist use on the Hill, CES dedicated an entire panel last week to “patent trolls”, combining high praise for USOTO Director Michelle Lee with candid commentary from “surprise” visitor (and Lee supporter) House Judiciary IP Sub-Committee Chair Darrell Issa. Mr Issa HR 9’s sponsor and chief congressional tub-thumper last session. Hoping to hide efficient infringement by resuscitating the tired troll “issue”, the panel’s prominence warns us; that Mr. Issa is still smarting from HR 9’s demise last session, that he blames its defeat on universities and BIO, that HR 9 will return this session in “modular” form, and that university “troll-like behavior” is in his crosshairs. A “rough transcription’ of his remarks ( see below) has been recently circulated among pro-patent advocates. It was forwarded by Dave Winwood.
Underlying Issa’s graphic statement tells us what we need to know about the coming session. Referring to the university BIO architects of HR 9’s demise, Mr. Issa graphically said they “kicked us to the ground and beat the shit out of us and we’re missing teeth in Washington because they wanted everything….” he also said “universities are the largest trolls”, specifically naming the University of California which he accused of engaging in “troll-like behavior “through surrogates “by transferring patent assertion to an “empty shell “. he also referenced the University of Michigan. Needless to say, his transcribed presentation below is a must-read.
What Mr. Issa said:
Issa Excerpts :
“One is the question of comprehensive – meaning a hodge-podge of things we put together in hopes that everybody has something in there that they want badly enough that they won’t kill the rest- has failed. So that is one of our challenges is, do I think that comprehensive or, if you will, a potpourri of items that we put together so everyone has something would help would work, I thought it would. But, and you didn’t name names, and I appreciate that, but since it is not an election year, BIO and the universities, you know, kicked us to the ground and beat the shit out of us, and we’re missing teeth in Washington because they wanted everything except they wanted one more thing for their situations, which was an end essentially maintaining trolls, because universities are the largest trolls, they don’t always do it directly, they do it through surrogates, but they are, and the University of California is the among the largest of the largest. And that doesn’t make them bad but the troll behavior does often clog up Marshall and Tyler Texas.”
“And I think the point about the most important thing being venue and to stop troll activity was true until the court agreed to take up the problem of a certain Delaware case. And if they decided in a way that I think would be appropriate, we could well get past that and for Senator Jeff Flake, who had the succinct version, and myself that would be great, we’d like to have it solved in a way in which “the courts broke it, the courts can fix it.” Otherwise North Dallas will not be in the Eastern District in the next redrawing that I do. At least I will get them out of the problem.”
“I think the important thing is, you mentioned one thing that I think for people here who are probably disproportionately in the electronics and technology area and not in PhRMA. We are working on some PhRMA fixes because PhRMA has some unusual requests that are not unreasonable for us to try to consider. One of them being that because they spend a billion dollars before the FDA and they often find that people want to challenge their patents only after they have that huge investment and only for the purpose of essentially taking all that work including the clinical trials, and monetizing it, that at least if you’re a small company in a venture situation, you’re particularly vulnerable because how do you tell somebody to invest hundreds of millions of dollars when in fact at the end of the day you may have a bigger problem.”
“One of them is in fact fee-shifting, and I’m not trying to object to it, but the current fee shifting does not allow you to deal with the University of California going to a entity that opens a single empty shell for the purposes of litigation. If they win, they pocket it and give UC a portion of it, or University of Michigan, or whoever, and if they lose, there’s nothing there.”
“So what I’m going to propose to everybody is, my goal, in concert with the full committee chairman, is to offer pieces of legislation, and making it very clear that they are modular- they can move independently, and that we will move them independently if we can. We will move them together if we can’t, and we’ll work with the Senate on what ultimately becomes likely a comprehensive bringing together of multiple bills.”
“… the largest trolls out there are those who have very large portfolios and would like to have general pleadings as “get out because I own this, or pay this royalty because you don’t want to fight thousands and thousands of claims.” So, when we talk about troll-like behavior, I always try to remind people, it’s not just the non-practicing entities and as a result, and Julie- you said it very well, it’s troll-like behavior, not trolls. “
We are quietly delighted to hear how university efforts helped defeat HR 9, but of course would rather see some other group get Mr Issa’s “credit”. Last year’s defeat bell cannot be un-rung. But this year with Mr. Issa still fuming, to save commercialization, universities will have to work even harder.