The first comprehensive anti-patent troll bill was introduced last week, and yesterday it debuted to a mostly receptive hearing in the House Judiciary Committee. But lawmakers were divided on a part of the bill important to some would-be patent reformers: establishing a patent office review system for "covered business method" patents.

Other parts of the bill would create more transparency in patent ownership, make it easier for companies to recover legal fees after winning a patent case, and shift rules around discovery and disclosure during litigation. The bill would also allow suits against customers who are users of a technology to be stayed when the manufacturer gets involved.

House Judiciary Chairman Bob Goodlatte (R-VA) introduced the bill by describing "abusive patent litigation" as a "drag on the economy" and calling out several of the most notorious examples of patent trolling in the past few years. Lodsys, a patent-holder that has gone after iOS developers, was called out by name.

"These suits target settlements at just under what it will cost for litigation," said Goodlatte. Shell companies are asking for payouts based on common practices like "sending a photo copy to e-mail, aggregating news articles, offering free Wi-Fi in your shop, or having a shopping cart on your website," noted Goodlatte. "The patent system was never intended to be a playground for frivolous litigation."

Next to speak was the ranking Democratic committee member, Rep. John Conyers (D-MI). While he agreed action was required, "our first rule should be to make sure we do no harm to our patent system," said Conyers.

He wasn't sure they needed to consider fee-shifting, for instance, when the Supreme Court is due to hear a pair of cases involving fee-shifting in patent cases. Nor did Conyers favor expanding the "covered business method" or CBM review program.

Expanding the so-called CBM program would have a big effect, because it would allow defendants to challenge many patents for around $100,000, instead of spending the $1 million or more typically required to fight a patent in federal court.

The current CBM program is a ten-year trial program that only applies to patents issued after the America Invents Act, passed in 2011, took effect. That means that most of the business-related patents reformers consider abusive can't be challenged under the program as it currently stands.

While some aspects of the bill have broad support in the tech industry, companies are divided about an expanded CBM. Many Internet companies support an expanded CBM review program, as do "Main Street"-type companies like supermarkets and restaurants, which are new but influential components of the anti-patent troll coalition. However, there's also a big coalition of businesses that opposes the CBM program—including some more established tech companies with more patents, like Microsoft, Adobe, Qualcomm, and Xerox.

The four witnesses who spoke were Krish Gupta, deputy GC at EMC Corp.; Kevin Kramer, head IP lawyer at Yahoo; David Kappos, who was the head of the US Patent and Trademark Office until recently and now is a lawyer in private practice; and Robert Armitage, former GC at pharmaceutical giant Eli Lilly.

Of the three witnesses, only Kramer supported expanding the CBM program. Kappos was vocal in his concern that the program should not be expanded from its focus on "financial service" patents to encompassing software patents.

"Let it settle in further," suggested Kappos. "Extension of that section to software innovations should be avoided. The US is home to a software industry that dazzles the world."

Troll overreach: Don’t mess with the burger joint

While there is some disagreement and confusion as to what changes are appropriate, now that more lawmakers are weighing in on the issue, it is clear that patent trolls are in for some kind of pushback. They have reached too far, demanded money from too many small businesses in too many cities. As an EFF attorney noted last week, the trolls have done much of the reformers' hardest work for them.

"In my area, local credit unions were the subject of a lawsuit from the patent assertion entities, just because they had features on their websites that have to do with online banking features," said Rep. Judy Chu (D-CA). "They had to make a decision between reducing staff and proceeding with a lawsuit. Finally they gave up and settled with the patent trolls."

The overreach was palpable and has made an impression on politicians. Rep. Brent Farenthold (R-TX) was incredulous that Whataburger, the Texas-based chain of hamburger joints, had been targeted by a patent suit.

"They make hamburgers!" sputtered Farenthold. "They don't play in the intellectual property game... You know there's a problem when I can't get Wi-Fi and the prices at my grocery store are going up because they're tagged by frivolous lawsuits."

Rep. Tom Marino (R-PA) named names, describing the patent threat letters his constituents had handed to him. Marino cited a letter from Farney Daniels, the Texas law firm pushing ahead with the now-notorious scanner patents; another letter from the firm of John Desmarais, who made waves in the legal world by leaving his corporate law firm to work for Intellectual Ventures and other patent plaintiffs; and a letter from Innovative Wireless Solutions LLC, yet another shell company wielding patents it says entitle it to payments from users of Wi-Fi.

"These are typical letters," said Marino. "They fail to state a claim. One has a little diagram. Apparently I have some problems in my own house, because my computer, and my wife's, and my kid's, are all linked together. That is how ridiculous these letters are. Particularly in my district, people are scared to death when they get something like this, because they don't know what's going on... why should criminal charges not be filed against someone for doing this?"