Rep. Bob Goodlatte (R-VA) introduced a new version of the Innovation Act, a bill designed to curb so-called patent trolls. Patent trolls have no business beyond acquiring patents and suing other companies, knowing that many will pay a settlement rather than pay the million or more it can cost to fight a patent through trial.
Bipartisan bill has most of what reformers want—and a real chance of passing.
The new Innovation Act is largely identical to legislation of the same name introduced to the House of Representatives by Rep. Goodlatte almost a year and a half ago. That bill had bipartisan support and a surprisingly good chance of bringing real patent reform to the US. It flew through the House easily, passing 395 to 91, and while it looked like such a popular bill would have an easy time clearing the Senate, the first Innovation Act had no such luck. Instead, it was killed in a quick and surprising statement made by Sen. Patrick Leahy (D-VT). Sources later indicated that Sen. Majority leader Harry Reid (D-NV) was the major driver behind the death of the bill.
Of course, this time around, Sen. Reid won’t be able to kill the bill. This January marked the inauguration of the 114th US Congress, which has a Republican-controlled Senate, so Goodlatte’s new Innovation Act may have better prospects when (and if) it hits the Senate.
The new Innovation Act is co-sponsored by Reps. Peter DeFazio (D-Ore.), Darrell Issa (R-Calif.), Anna Eshoo (D-Calif.), and Lamar Smith (R-Texas).
Like the old Innovation Act, the new Innovation Act involves reforms to the way a patent infringement accusation moves through the court system. The original act had a few main elements of reform: it proposed new pleading requirements forcing patent holders filing suits to identify their claims clearly, as well as fee shifting, meaning that patent holders not successful in court could be forced to pay back “reasonable fees and other expenses.” The act also included joinder provisions that would make any companies (especially big patent holding companies that provide the muscle behind shell companies suing for infringement) with a financial interest in the outcome of a case liable for applicable fees.
The old act also limited discovery, putting a cap on how much information a patent holder could subpoena from an accused infringer before the patent holder had concluded the “claim construction” phase of the patent trial. And the Innovation Act gave exceptions to the consumer, allowing litigation against a purchaser of an infringing product to be stayed until the patent holder and the manufacturer have had their time in court. This takes a direct jab at some of the more egregious instances of patent trolling, wherein shell companies have been known to send out blanket demands to consumers for settlement fees if they’ve purchased a company’s allegedly infringing products.
The new act was applauded by retailers, startups, and some technology lobbyists alike. “Many complain about gridlock in Washington,” the Computer & Communications Industry Association wrote in a statement today. “We finally have a bill that would create a bit of gridlock for patent trolls’ extortion schemes. This bill would make it less profitable for patent trolls to sue and set up speed bumps for those unfairly targeting everyone from legitimate US companies to those buying an item like a printer from a store. Goodlatte’s patent reforms would help bring some needed information to those unfairly targeted by patent trolls—requiring trolls to provide more details about their infringement claims and reveal who is paying for their legal antics.”
Still, the new Innovation Act, being largely the same, also faces a lot of the opponents that the old Innovation Act faced. The Innovation Alliance, a group of patent-holding companies including Qualcomm, Dolby, and InterDigital, released a statement today saying that “the bill being introduced is over broad and does not take into account the many developments that have taken place over the past year in the patent landscape—including a documented plunge in the patent litigation rate, five Supreme Court cases, and actions by the US Patent and Trademark Office, Federal Trade Commission, and Judicial Conference that address many of the problems that this legislation originally targeted when it was first introduced in the House in 2013.”
The Innovation Alliance’s objection does reflect a real challenge for the new, similar Innovation Act, though. At a panel on patent reform at the Consumer Electronics Show in January this year, there seemed to be more skepticism about solving the issues with the patent system through sweeping legislation. Still, patent reformers on the Hill are hoping to recapture that 2013 momentum.
*Also see https://twitter.com/HouseJudiciary/status/563357033328828417
Learn more here http://arstechnica.com/tech-policy/2013/12/house-votes-325-91-to-pass-innovation-act-first-anti-patent-troll-bill/