Sen. Hatch's Recovery of Fees Provision Earns Praise At Patent Hearing
WASHINGTON—Witnesses at Thursday’s Judiciary Committee hearing on the PATENT Act praised the bill’s recovery of fees provision, authored by Sen. Orrin G. Hatch, R-Utah. According to Mark Chandler, senior vice president and general counsel at Cisco Systems, the most important provisions in the bill include the fee-shifting andrecovery language: "The fee-shifting and fee-recovery provisions ensure that people with weak lawsuits and weak patents think twice before bringing a suit."
Julie Samuels, Executive Director and President of the Board at Engine, also noted that "if we are going to have any kind of fee shifting without an effective way to actually recover those fees, the fee shifting would be meaningless."
As the majority of witnesses testified, fee shifting and recovery would greatly discourage frivolous lawsuits and are an integral part of the bill. Here’s what they said:
Mark Chandler, SVP, General Counsel and Secretary, and Chief Compliance Officer, CISCO:
Making sure that fee shifting works in practice also requires making sure the backers of judgment-proof shell plaintiffs are left on the hook. There is seemingly no limit to the creativity of the masterminds of patent profiteering in creating convoluted public and private ownership structures. I appreciate Senator Hatch’s leadership and the contributions made by his colleagues to creating a fee recovery provision that will hold the profiteers accountable while not creating unnecessary obstacles to bringing patent cases to court. This provision also reflects the give and take necessary to arrive at a result acceptable to diverse interests.
Kevin H. Rhodes, Chief Intellectual Property Counsel, 21C:
21C thus believes that the contingent liability approach to fee recovery set forth in Section 7(c) of the PATENT ACT would directly address concerns that fee-shifting might be ineffective because patent owners would bring suits in the name of shell entities that lack adequate funds to satisfy a fee award. It would do so in a manner that is more efficient, fairer, and less disruptive to investments in patent holders, than would the alternative approaches of joinder or bonding.
Julie P. Samuels, Executive Director, President of the Board, Engine:
Thank you, Senator Hatch, and thank you so much for making sure that recovery language was in the bill because as you say, if we are going to have any kind of fee shifting without an effective way to actually recover those fees, the fee shifting would be meaningless. And we think that fee shifting is a core principle that is so important for small start-ups and for anyone facing abusive patent litigation. Because right now, when you are a start-up facing a patent demand, facing a lawsuit, you’re looking at years of litigation and potentially millions of dollars in legal fees. …So what you’re doing is you’re giving these tools to these small companies to really push back.
Henry Hadad, Senior Vice President and Deputy General Counsel, Bristol-Myers Squibb:
BMS further appreciates the Fee Recovery provisions of the bill, and in particular the contingent liability certification process where a patent litigant cannot satisfy an attorney fee award, as it reflects a balanced and improved approach over prior proposals.
