Mar 22, 2016
As reported earlier, three bills were introduced in 2015 in an attempt to stop litigation of patents in bad faith. The STRONG Patents Act of 2015 (S.632) appears stuck in the Senate Committee on the Judiciary. The PATENT Act (S.1137) and the House Innovation Act (H.R.9) are out of committee and have been ready for a vote in their respective chambers since late last year.
S.1137 and H.R.9 have been endorsed by on-line retail interests and small technology companies seeking relief from so-called "patent trolls." On the other hand, a number of corporations and universities that own large patent portfolios are against both bills.
Recent court decisions on subject matter eligibility and the strict enforcement of 35 U.S.C. §101 have reduced the assertion of weak patents, especially in e-commerce, mobile phone, and Internet applications. The successful use of a §101 defense strategy seen in recent cases has removed the sense of urgency that had surrounded the current patent reform bills.
The story may not be over, focus has shifted away from broad legislative patent reform to the topic of venue in patent cases. Some courts, notably the Eastern District of Texas, are havens for plaintiffs asserting patent rights. Astonishingly, over 40% of all patent litigation were filed in the Eastern District of Texas during 2015. Perhaps as a result, the Venue Equity and Non-Uniformity Elimination Act of 2016 (VENUE Act) has been introduced by Senator Jeff Flake. The VENUE Act (S.2733) was introduced March 17, 2016, and is now in the Senate Committee on the Judiciary.
Jul 17, 2015
On June 11, 2015, H.R. 9, the "Innovation Act," was ordered to be reported with amendment by the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet. That means the bill is now ready for full consideration by the House.
On June 6, 2015, S.1137, the "Patent Act," was ordered to be reported with an amendment by the Senate Committee on the Judiciary. The two bills, S.1137 and H.R. 9, are now listed as related bills.
Senator Vitter (co-sponsor of S.632, the "STRONG Patent Act") stated on his website that the House is expected to vote on H.R. 9 before the August break.
Mar 25, 2015
The National Conference of State Legislatures (NCSL) has been reporting on legislation being introduced in state legislation that could affect patent litigation. Vermont passed legislation in 2013 that allows those accused of patent infringement to sue in state court if the claim was made in bad faith.
In 2014, forty three states introduced legislation that involved the right to sue in state court in matters of patent-related matters. Sixteen states succeeded in passing laws that cover prohibitions on asserting a claim of patent infringement in bad faith.
As for 2015, the NCSL reports that "seventeen states have introduced legislation to create or amend state laws that punish bad faith patent assertions, commonly referred to as patent trolling.”
A current report on state legislation in 2015 from the NCSL is available.
Mar 3, 2015
In response to H.R.9, the "Innovation Act," the United States Senate has introduced S.632, the "Support Technology and Research for Our Nation's Growth (STRONG) Patents Act." The STRONG Patents Act would amend Title 35, United States Code, to "protect the property rights of the inventors that grow the country's economy."
Many companies have invested time and resources into the development of a new commercial product only to see another company "steal" the invention. Filing for patent protection allows a company to prevent others from using the invention. Unfortunately, recent meritless lawsuits and inappropriate demand letters have created a backlash against patent litigation. The STONG patents act in an attempt to support patent reform without crippling patent protection.
The bill frames the current issues in recent legislation (i.e. the America Invents Act (AIA)), upcoming changes to the Federal Rules of Civil Procedure (FRCP), and recent Supreme Court rulings. The STRONG Patents Act attempts to slow down further disruption in the patent system and adjust the code to strengthen the position of patent holders. S.632 highlights include changes to Inter Partes Review (IPR), Post-grant Review, and Reexaminations. The Act also addresses fee diversion, damages under willful infringement, and divided infringement.
In response to recent meritless lawsuits and inappropriate demand letters, the Act defines unfair or deceptive acts in connection to the assertion of patent and gives the Federal trade Commission (FTC) and state attorneys general enforcement powers. The Act includes acts that are considered "bad faith." In addition, the party sending a demand letter must identify themselves and state how the recipient of the demand letter is infringing which patents. The full text of the bill is available here
February 12, 2015
Congress started the 114th session with a proposed bill aimed at reducing frivolous patent lawsuits. H.R.9, the "Innovation Act," proposes substantial changes in the way patent infringement lawsuits are conducted.
Receiving a threat of litigation unless one pays a license to a seemly unrelated patent, can be a gut-wrenching experience. Refuting the attack can be expensive and diverts attention from business goals. The proposed "Innovation Act" addresses meritless patent lawsuits by requiring more specificity in the Plaintiff's complaint against an infringer. As stated in the bill summary, the complaint must contain the following information if available:
- each claim of each patent allegedly infringed;
- for each claim of indirect infringement, the acts of the alleged indirect infringer that contribute to, or are inducing, a direct infringement;
- the principal business of the party alleging infringement;
- the authority of the party alleging infringement to assert each patent and the grounds for the court's jurisdiction;
- each complaint filed that asserts any of the same patents; and
- whether the patent is essential or has potential to become essential to a standard-setting body, as well as whether the United States or a foreign government has imposed any specific licensing requirements.
Similar to House bill H.R.3309 in the last session, H.R.9 uses "fee shifting" to punish plaintiffs that bring meritless lawsuits. The goal is to crack down on parties that send demand letters alleging patent infringement without proper investigation and/or justification.
H.R.9 also amends the America Invents Act (AIA), signed into law September 16, 2011, to:
- require claims of patent in post-grant and inter partes review proceedings to be construed in the same manner as a court would construe such claims in a civil action to invalidate the patent;
- codify judicial doctrine relating to the consideration of prior art in cases of double patenting for the purpose of determining the nonobviousness of a second patent's claimed invention, thereby specifying that such doctrine continues to apply under the AIA's first-inventor-to-file patent system;
- revise the transitional covered business method patent review program to expand the scope of prior art that may serve as the basis of a challenge and permit the USPTO to waive filing fees; and
- exclude any time consumed by an applicant's request for continued examination from the calculation of a patent term adjustment that is based on the USPTO failing to issue a patent within three years.
Dissenters to the previous introduction of the Innovation Act argue that patent reform should focus on patent quality. Although lawmakers agree that the abuse deceptive demand letters should be addressed, some contend the current wording also punish legitimate claims of patent infringement, especially by smaller companies.