Senate Judiciary Committee considers key changes to patent overhaul

Bipartisan senators pushing for broad patent reform are adding a whole new section to their bill to placate industries that have been wary of congressional action. Senate Judiciary Chairman Chuck Grassley (R-IA) and other sponsors of the Patent Act unveiled a managers' amendment to the bill that will be taken up at June 4th's markup. The overall legislation is aimed at combating what industry groups say is growing abuse of the legal system, with so-called patent trolls buying up patents solely to extract settlements.

The bill makes a number of changes to the legal procedures of patent trials. But industries like biotechnology and pharmaceuticals have raised concerns about a different kind of alleged abuse taking place at the trial-like proceedings in the US Patent and Trademark Office (PTO), which were set up after Congress last passed a patent bill in 2011. Those proceedings at the PTO -- known as post grant and inter partes reviews -- were meant to offer a faster and cheaper way to challenge the validity of a patent. Supporters say the proceedings are important to weed out weak or vague patents. But critics and some lawmakers have said those proceedings are skewed too far against patent owners. They have also claimed that hedge funds use the proceedings to short stocks. The amendment would also make a number of changes to the underlying text, including to a contentious provision on fee shifting. The amendment is meant to relieve some of the burden on universities, inventors and commercial lenders -- who could be left on the hook for trolls' legal bills.