Currently, there are 5 publicized bills in the House and Senate, most of which seem crafted to reverse patent troll damage. Representative Bob Goodlatte of Virginia has reintroduced one of them: his bipartisan H.R.9, “Innovation Act,” which is very similar to his previous 2013 Bill aimed at non-practicing entities (patent trolls). The bill proposed additional burdens for plaintiffs, such as demonstrating a reasonable basis for their claims early on, while lessening the burden on defendants by limiting discovery expenses, for example. Goodlatte, the Act’s major sponsor, asserted that the bill would target abusive patent litigation by patent trolls. Groups representing the software industry strongly support this act. The bill’s main features include:
– Requiring the Patent Trial and Appeal Board (“PTAB”)to use the district court’s claim construction standard, which includes a less permissive range of prior art, during inter partes review.
– Owners must reveal which parties will actually benefit from litigation to determine the true identities of plaintiffs, who often operate through shell corporations and similar structures. If it is found that a plaintiff is a shell company, the real party in interest must join the litigation.
– The court may stay actions against customers in which the manufacturer is a party.
– Discovery prior to the claim construction ruling is limited to information necessary for determining the meaning of the terms.
– Patent owners are subject to heightened pleading requirements, such as identifying basic details (each claim of infringement) when they file the complaint.
– Unless their position is deemed reasonably justified in law or falls under other special circumstances, losing patent owners must pay for all fees and expenses of the winning defendant.
– Courts are required to stay litigation against customers when there are parallel suits against manufacturers.
– Limitations on venues where suits may be brought.
Although the Innovation Act was approved for debate on the floor by the House Judiciary Committee, there was a clear lack of consensus. There were a number of motion to amend the bill, indicating that members are not yet satisfied with the language. John Conyers, who is the ranking Democratic member of the Judiciary Committee, said the bill is overly broad while not adequately addressing specific issues such as abusive demand letters and fees that divert from the USPTO budget. The bill’s language on attorney’s fees provisions is also watered down as compared to the Shield Act, for example. Industry organizations including the Association of American Universities, the Medical Device Manufacturers Association, and the National Venture Capital Association voiced their concerns about potential effects of this Act in a joint statement released on June 10: Seeing as this type of legislation would likely lead to further down-turn in patent lawsuit filings and limitation of every patent owner’s access to the courts, small, restrained legislation may be the better solution. In response to concerns, Goodlatte proposed a manager’s amendment with similar language to the Senate’s PATENT Act, including stays of action, venue restrictions, and fee recovery joinders.
