On June 4, the Senate Judiciary Committee passed a bipartisan bill aimed against the abusive patent litigation of non-practicing entities (NPEs a.k.a. patent trolls) in a 16-4 vote. The bipartisan supported bill, one of at least five of its kind, is titled “Protecting American Talent and Entrepreneurship Act” (PATENT). Like many of its counterparts, it is aimed primarily at clamping down on frivolous NPE litigation. It was introduced by a bipartisan group of senators on April 29. Next, the full Senate will debate the bill, which primarily consists of the following components:
Attorney Fees – This Act expands 35 U.S.C. by mandating that attorney fees be awarded against the non-prevailing party if its position or conduct was not objectively reasonable.
Parent Entities – Accusers are required to identify each entity with a financial interest in the patent, as well patentees and their parent entities.
Pleading Standards – The bill implements heightened pleading standards for infringement claims, requiring identification of the asserted patent, the asserted claim, and the accused product along with an explanation of how the accused product infringes the asserted claim(s).
Demand Letters – The Act requires greater specificity in demand letters, such as identification of the allegedly infringed patent, at least one allegedly infringed claim, each accused product, a clear and detailed description of the grounds for the allegation(s), identification of each person with a right to assert the allegedly infringed patent rights, and an explanation of how the demanded compensation was calculated.
During the initial hearing, senators raised concerns about the impact of the bill on patents subject to the Hatch-Waxman Act, which enables drug companies to submit an abbreviated new drug application with the intention of marketing a generic version. The judiciary committee also seeks further discussion regarding litigating universities. Co-sponsors are considering potential amendments to accommodate such details.
Currently, there are 5 publicized bills in the House and Senate, most of which seem crafted to reverse patent troll damage. Some worry that this type of legislation will lead to limitation of every patent owner’s access to the courts and suggest that smaller, more restrained legislation or regulation through government agencies such as the USPTO or the FTC may be the better solution.