Patent Reform in 2016, Maybe Not as Dead as you Think

Conventional wisdom within much of the patent community is that patent reform is dead, at least for the 114th Congress. There is no way that patent reform, which famously stalled in 2015, could possibly restart and gain any momentum in 2016, right? After all, this is an election year, but not just any ordinary election year. This marks the final year of the Obama Administration, at least 14 major candidates are running for President, and the Republicans and Democrats couldn’t be farther apart on just about every issue. Patent reform is dead.

Not so fast!

Yes, President Obama is a lame duck and it will become increasingly difficult for anything of substance to be accomplished in Washington, DC. Unfortunately for the patent community, despite the hyper partisan times in which we live, patents, patent reform and innovation policy are not political issues. Patents and innovation policy will not drive voters to or away from the polls, and supporters seem not to care if a candidate takes positions they completely disagree with on patent matters. In short, patent and innovation policy presents no risk for politicians, but well-financed donors and lobbyists covet more reform, which makes for a dangerous combination.

Yes, there are a number of Constitutional conservatives, such as Republican Presidential Candidate and former U.S. Senator Rick Santorum and conservative commentator Ken Blackwell, both who have vocally made patents a property rights issue (see here and here). But so far even Republican Presidential Candidate Senator Ted Cruz (R-TX), a staunch Constitutional conservative, has yet to go on record equating patents to a Constitutional property rights issue, although he did vote against the PATENT Act in the Senate Judiciary Committee. Still further, some of the major proponents of additional patent reform are Republicans, including Senator Chuck Grassley (R-IA), Congressman Bob Goodlatte (R-VA) and Congressman Darrell Issa (R-CA), all of whom find themselves interestingly in alignment with the Obama Administration and the Obama Administration’s chief benefactor, the company formerly known as Google.

None of this means that patent reform will move from the pile of bills hopelessly stalled and to the floor of the House or Senate for a vote. The one thing to keep in mind, however, is that both the Innovation Act and the PATENT Act have passed through Committee and are awaiting floor action. That means that they could be taken up at nearly any time. So if and when momentum for reform is to be rekindled things could move fast – very fast.

Presently, the pharmaceutical and biotechnology industries are singularly focused on reforming the post grant process at the United States Patent and Trademark Office. The pharma/bio lobby is seeking a legislative fix that would exempt the patents they own from post grant challenges at the Patent Trial and Appeal Board (PTAB). The chances that such a carve out will be achieved is slim to none, with slim being an overly optimistic assessment, at least at the moment. But the situation is fluid, and the pharma/bio lobby has been thoroughly kicked in the teeth throughout the Obama Administration, both in the halls of the Capitol and in the courts. They see this issue as extremely important, perhaps an existential threat, and it is well known that if they are able to win the carve out they will support whatever reform it must be attached to regardless of how bad they may otherwise think the rest of the reform package may be. As long as the pharmaceutical and biotechnology industry remains against patent reform nothing will happen, but the forces that want additional reform will almost certainly see this final year of the Obama Administration as the last best chance to get truly sweeping patent reform for the foreseeable future. If desperation sets in, and Congress wants to accomplish something that neither party will view as political on an issue that will not upset voters, patent reform could once again gain momentum during 2016.

It is also important to keep in mind that Senator Grassley, who is up for reelection himself in 2016, is barnstorming Iowa in one of his now famous swings through every part of the state. During these campaign trips Grassley is telling Iowans that patent reform is among his top three legislative priorities for 2016. Given his seniority and the fact that he is Chair of the Senate Judiciary Committee, if Grassley is truly behind patent reform and willing to use his considerable clout in the Senate the issue is far from dead. This is true particularly true given the collective pressure that could come to bear from Senator Chuck Schumer (D-NY), Senator Patrick Leahy (D-VT) and Senator John Cornyn (R-TX), all who are supportive of additional patent reform efforts.

While some powerful Senators remain in favor of patent reform that does not mean that patent reform won’t be opposed in the Senate. Surprisingly perhaps, the strongest opposition to patent reform in the Senate has come from Senator Chris Coons (D-DE), author of the STRONG Patents Act, which offers a very different, pro-patent alternative view. Sharing the Coon’s view is Senator Dick Durbin (D-IL), himself a senior and respected member of the Senate who could decide to put his clout behind efforts to keep the legislation at bay. Of course, the wildcard in the Senate will be Senator Cruz, who has opposed patent reform and would undoubtedly be pushed by conservatives to stand up to an Obama Administrative initiative that undercuts innovator property rights. If patent reform does heat up and Cruz is pushed to take more forceful positions that would likely push other Republican Presidential candidates to take positions on the matter themselves.

As interesting as the Senate may become when patent reform resurfaces, the dynamic in the House will be fascinating for many reasons. Since patent reform stalled there is a new Speaker of the House, Paul Ryan (R-WI). Speaker Ryan has said he plans to return the House to regular order and allow business to trickle up from members to the full House rather than have legislation forced down from leadership on Members. It is widely known that Goodlatte and Issa continue to want more patent reform and are seeking opportunities to push forward to a vote in the House. Will Speaker Ryan allow the Innovation Act to come to a vote in the House? No one seems to know for sure.

While Ryan’s view of patent reform is not generally known, what is known is that House Majority Leader Kevin McCarthy (R-CA) is opposed to patent reform, or at least the patent reforms embodied in the Innovation Act. McCarthy has been listening to a group of venture capitalists from Silicon Valley who he has known for years and who’s opinions he values. These particular VCs, like so many others, will invest in technology companies only if there is a patent strategy in place to protect their investments. They have told McCarthy that the Innovation Act would be a disaster and McCarthy believes them. McCarthy told Goodlatte last year that more work had to be done and that the Innovation Act was not going to the floor, which is why it stalled in the House. But that was before Speaker Boehner retired, and before McCarthy became politically wounded to whatever extent he was as he himself sought to move up to the Speaker’s chair.

What all this means is patent reform may not be as dead as you previously thought. Patent reform will certainly resurface in 2016, with supporters in the House and Senate seriously and sincerely looking for ways to push the bills forward.

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