(Almost) everyone loves the new patent reform bill

Congress now has a chance to vote on a newly introduced patent reform bill with broad bipartisan support that stands a good chance of kicking the legs out from under most patent trolls.

Introduced by House Judiciary Committee Chairman Rep. Bob Goodlatte (R-Va.), the Innovation Act of 2013 makes use of many ideas gleaned from previous bills in the same vein. But while many in the tech industry are enthusiastically supportive, a few still have reservations, among them the BSA Software Alliance.

Goodlatte’s good ideas

The bill features several key reforms that have been widely discussed as possible ways to keep patent tolls at bay.

Transparency: Trolls by nature are cagey; they often hide their tracks by working through shell companies or moving patents between holding entities. The new bill would require disclosure of any and all entities who have financial interests in a patent.

Loser pays court costs: If you take someone to court over a patent claim and you lose, you’ll be on the hook for “reasonable fees and other expenses.” This ought to give pause to trolls that make their living by raking in patent fees. If they’re taken to court and they lose, the damage to their pocketbooks will be a lot more substantial. Plus, any parties revealed having a financial interest as per “Transparency” above would also have to cough up costs.

Leave the customers alone: End-users would gain greater exemption from patent lawsuits, a tactic used by many trolls — for example, the Innovatio patent lawsuits, where said company tried to shake down owners of hotels and coffee shops for using Wi-Fi technology it claimed a patent on. However, for this to work, both sides in the suit have to agree to leave customers out of it before they go to trial.

More detailed pleading: Those who claim patent infringement will have to file far more detailed paperwork that shows exactly how the defendant infringes on their particular patent. Too many of the current lawsuits (such as the suits filed against Martha Stewart for her iPad magazine apps) simply name the patents infringed without providing any working details.

Narrowing the scope of discovery: A major source of costs for a patent trial is the amount of time and money spent on discovery. The bill narrows the discovery phase so that the only paperwork allowed is that which is most directly relevant to the patent claims, which speeds up the trial as a whole and reduces the cost burden for the defendants.

A new way of re-examining patents generally, and business method patents in particular: One powerful but difficult way to fight trolls: Challenge the validity of the patents themselves. Many patents are so vaguely worded they could mean anything (for example, “A computer-based method for aiding a user in accessing a body of stored information which includes segments of related information“), and it boggles the mind that they were issued at all.

The Goodlatte bill takes an existing program for reviewing patents — called the “Transitional Program for Covered Business Method Patents” (aka the CBM program), created via the America Invents Act — and applies it to patents granted before that other bill was passed into law. In other words, it’s a way to allow closer scrutiny to patents passed in the pre-reform days.

Bad idea, says the BSA

Many who’ve previously raised objections with the patent system in its current form are elated by the bill. The Electronic Frontier Foundation calls it “the best patent troll-killing bill yet” and urges support. The National Retail Federation also welcomed it, citing the negative effects of patent trolling on both “Traditional brick-and-mortar merchants and e-commerce companies alike.”

The App Developers Alliance, the Computer and Communication Industry Association, and the Information Technology Industry Council have also chimed in with their support.

But not everyone is thrilled. The BSA was generally pleased with the bill but withheld endorsement for the patent re-examination provision, which it felt created an overly broad definition of business method patents. Its worry was that “any party sued for or charged with infringement can always challenge an extremely broad range of patents at the USPTO,” and being able to challenge such patents would “create uncertainty and risk that discourage investment in any number of fields where we should be trying to spur continued innovation.”

The BSA was also worried about expanding the CBM program, which “could inadvertently undermine many valid patents by giving infringers a new procedural loophole to delay enforcement…. Infringers would be able to delay legitimate lawsuits they face in district court by initiating CBM proceedings at the PTO. This would buy time to gain market share on innovative, patent-holding competitors.”

Another critic of the CBM program expansion, the Innovation Alliance (which spoke out previously against the Patent Reform Act of 2009), noted that the CBM had only been in operation for a year and stated, “There is no evidence at this early juncture to suggest that the program is not working or needs to be changed or extended.”

But if these are the most vigorous objections mounted to the bill so far — at least, mounted by those who aren’t themselves trolls — it’s unlikely that the existing opposition will be enough to stall its momentum.

This story, “(Almost) everyone loves the new patent reform bill,” was originally published at InfoWorld.com. Get the first word on what the important tech news really means with the InfoWorld Tech Watch blog. For the latest developments in business technology news, follow InfoWorld.com on Twitter.