Silicon Valley Hopes for Patent Fix Dashed as House Punts Vote

Legislation backed by some technology companies to curb nuisance patent suits will not be voted on in Congress this summer amid opposition from a conservative organization and demands for change from some businesses.

“There is more work to be done” on the bill, H.R. 9, House Majority Leader Kevin McCarthy, a California Republican, said Tuesday. He said no action will be taken on the measure before the month-long August recess.

Texas Senator John Cornyn, that chamber’s No. 2 Republican and a drafter of the Senate version, said a companion bill may face a vote “hopefully after August.”

Supporters of the legislation, including Google Inc., Cisco Systems Inc., Rackspace Hosting Inc. and retailers, had been hoping for passage as early as this week after a similar bill passed the previous session of Congress with overwhelming support.

Bills in both houses would require patents owners to provide more information on infringement claims and make the loser pay the winner’s legal fees. The goal is to make it cheaper and easier to fend of lawsuits in which owners of low-quality patents try to use the court system’s complexity to extract cash from businesses.

Universities and some patent-heavy tech companies such as Qualcomm Inc. warn the provisions might be too onerous for small companies trying to protect products from copycats. Venture capital firms are split over the bill.

‘Death Squad’

The drug and biotechnology industries are pushing for a separate provision that would insulate its members from reviews at the U.S. Patent and Trademark Office of already issued patents. That procedure has been called a “death squad” due to the high rate of patent cancellations.

Last week, House Judiciary Chairman Bob Goodlatte, a Virginia Republican, was given a week to drum up support for the bill and said it was “clear some members still have concerns.”

The tug of war between limiting lawsuits and promoting innovation has historically crossed party lines, with politicians more likely to take positions based on which companies are in their districts.

It has become political. Heritage Action, a group that lobbies for what it calls “conservative policy visions,” on Monday came out against the House bill, saying the patent system should instead take time to adjust to changes creating in a sweeping 2011 overhaul.

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