Soon after the Senate Judiciary Committee passed its patent reform bill, the PATENT Act (S. 1137), on June 11th, the House Judiciary Committee favorably reported H.R. 9, the Innovation Act with a vote of 24 to 8. The Innovation Act would allegedly address abusive practices by patent trolls and their often-illegitimate claims of patent infringement.
The bill would require plaintiffs to disclose the owner of a patent before a lawsuit is filed and explain why they are suing, while also requiring courts to determine the validity of patent cases early in the process.
The Innovation Act includes provisions aimed at protecting those being brought to court for substantively meritless patent cases, including, among others: (i) heightened pleading requirements, (ii) limits on discovery until after a claim construction ruling, and (iii) a presumptive award of attorneys’ fees to the prevailing party, including possible “joinder” of “interested parties.”
Supporters like Senator Chuck Grassley believe that “the meaningful reforms in our bipartisan bill are needed to ensure that the innovation and entrepreneurship our patent system was designed to protect isn’t undermined” and that “frivolous lawsuits cost [small businesses] millions of dollars and force them to settle despite having a strong defense.”
Opponents, like Rep. Thomas Masse, say Congress is over-correcting an isolated problem, which then weakens small innovators’ abilities to assert their patent rights while lawmakers focus on reining in “patent trolls”; trolls are mostly shell companies that buy up vague patents with the intent of suing other companies for infringement.
“It’s a broad-spectrum weed killer, but it’s killing plants, too,” states Rep. Masse, a Kentucky Republican and MIT graduate who said he holds 29 patents. “The problem,” he said, “is everything this does to a troll, it does to a legitimate inventor.” He also said the bill would drag out the discovery process during litigation, making it more costly and onerous.
Some scholars argue that Congress should enact reasonable legislation that specifically target bad actors and deceptive behaviors – not overly broad provisions that apply to all litigants seeking to assert patents. Cislo & Thomas LLP agrees that this legislation will hurt inventors and small company innovators who do not steal others’ technologies.
Earlier this year Rep. Bob Goodlatte, Virginia Republican and chairman of the House Judiciary Committee, reintroduced the Innovation Act, which passed the House in the last Congress but died in the Senate. However, the new Innovation Act shows signs that it may in fact become law by the end of the year.
