The Senate shelves a bill aimed at reining in patent trolls
FORTUNE—It’s been a week of tough reckonings for the tech industry in Washington. Last Thursday, FCC Chairman Tom Wheeler — handpicked by a president who’s pledged to protect the open Internet — unveiled a proposal that would allow major telecoms to charge content creators for quick and reliable delivery of data over their networks. That, say many in tech, would destroy the principle of net neutrality, leading to a tiered Internet that will stifle innovation.
And Wednesday, the industry suffered another major setback when Senate Judiciary Chairman Pat Leahy (D-Vt.) announced he is shelving a bill aimed at curtailing so-called patent trolls who buy up intellectual property claims in order to shake down companies in court. “I have said all along that we needed broad bipartisan support to get a bill through the Senate,” Leahy said in a statement on the decision. “Regrettably, competing companies on both sides of this issue refused to come to agreement on how to achieve that goal.”
Passing the litigation reform measure topped tech’s priority list for Congress, and it looked to be on a glide path after the House approved its own version back in December with a huge, bipartisan margin. But Democratic Senators tripped in part over the issue of fee-shifting — the standard for sticking plaintiffs with the legal tab for both sides if they file a junk suit.
Why would Democrats have a problem with that? Because while they might like their zippy new friends in Silicon Valley, they go much further back with their pals at the trial bar, who are making a mint off all the patent suits — and to a lesser extent, the drug industry, which views robust patent protections as the best defense of its own research and development investments. Lawyers have been particularly generous to their Congressional allies: Senate Majority Leader Harry Reid (D-Nev.), for example, has collected $3.7 million in campaign contributions from the legal community over the last five years — ten times what he’s gathered from the tech industry in the same period, according to the Center for Responsive Politics.
“It’s another example of entrenched interests who’ve been greasing these pols from the dawn of the republic beating the newcomers,” says Mike Hacker, a consultant for tech on the issue. “And it’s a further recognition that the Internet industry is going to have to play the long game.”