Anti-troll bill may expand CBM review to all patents

The Stopping the Offensive Use of Patents (STOP) Act, which was introduced by Representatives Darrell Issa and Judy Chu, would expand Covered Business Method (CBM) Review under the AIA to include all types of patents.

The CBM review trial was introduced under the AIA to reduce the number of overly broad business method patents. A party accused of infringing a patent that is covered under Section 18 of the AIA can use the CMB review system to challenge its validity through the USPTO’s Patent Trial and Review Board (PTAB) as an alternative to litigation.

CBM review was introduced as a temporary measure in September 2012. It will end on September 15 2020, after which the USPTO will not accept any new petitions for CBM review.

The STOP Act, however, would make the PTAB proceedings permanent. It was drafted in conjunction with Senator Chuck Schumer, who has been working on the Patent Quality Improvement Act, and incorporates parts of that bill with some adjustments to tailor it to the AIA.

Laurent Crenshaw, Issa’s legislative director, told reporters during a press conference today that it is much cheaper for businesses to challenge the validity of patents under post-grant proceedings than it is for them to pursue litigation. The cost of attempting to have a patent invalidated under the STOP Act would be around $100,000 in fees and costs, including around $30,000 in USPTO fees, compared to multimillion-dollar litigation. In addition, multiple businesses targeted by one troll can split the fees and costs for the proceeding.

Crenshaw acknowledged that the bill is only a partial solution to the patent troll problem. Other pending legislation attempts to address other aspects of the issue, such as the litigation strategies employed by trolls.

“We are quite aware that there are other Congressional offices that are looking at other aspects of the problem so we don’t see this as being the end-all solution but we see it as a very important part of a problem that needs to be dealt with,” said Crenshaw.

The bill is supported by the Food Marketing Institute, an industry association that represents supermarkets. Retailers have increasingly become targets of patent trolls.

“The average profit in our industry is less than 1% so consumers absolutely take a hit from trolls,” said Erik Lieberman, regulatory counsel for the Food Marketing Institute. “Food prices are already forecast to increase by 3-5% this year.”

He said the Institute’s members often face demands from patent assertion entities for commonly used features such as rendering JPEGs and sending out text messages that have links embedded in them.

He described the STOP Act as “very important legislation that will help address the problem of trolls”.