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New patent reform bill introduced in the U.S. House

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Ken Salomon

Published on: 10/24/2013

House Judiciary Committee Chairman Bob Goodlatte (R-VA) on October 23 introduced a patent litigation reform bill called the Innovation Act, H. R. 3309.

Key components of the Innovation Act include fee shifting, enhanced pleading requirements, joinder provisions, discovery limitations, customer suit exception, covered business method review extension, and transparency

At a series of press conferences and appearances on October 23 and 24, Goodlatte described the measure as an effort to “correct the asymmetry” in current patent litigation and stop “litigation extortion.” Goodlatte said the bill pushes for robust corrections in the patent litigation system while protecting and promotion innovation.

“The goal is to measurably work to end abusive practices in our patent system,” Goodlatte said, adding that “abusive patent litigation is a drag on our economy.”

U.S. Rep. Jason Chaffetz (R-UT) is one of 10 original co-sponsors for the measure. Earlier this year Chaffetz and U.S. Rep Peter DeFazio (D-OR) introduced the SHIELD Act, which targeted abusive patent litigation through fee shifting. In the press conference announcing the introduction of the Innovation Act, Chaffetz said the Innovation Act incorporates ideas from SHIELD, but goes farther.

“This is important, good legislation,” Chaffetz said, citing a Stanford Technology Review study that found 55 percent of troll suits are filed against small companies and that there has been a 400 percent increase in cases brought by patent trolls in recent years, adding that “Congress can get this done in a bipartisan way.”

Goodlatte announced that the House Judiciary Committee will hold an October 29 hearing on the bill with a markup to follow “fairly soon.” Goodlatte stressed that his legislation reflects a bipartisan and bicameral effort that has featured close coordination with Senate Judiciary Committee Chairman Patrick Leahy (D-VT.) and the White House and consultation with affected companies and trade associations. He said that Senator Leahy is expected to introduce a Senate version of the bill shortly, perhaps within the next two weeks.

Here are some highlights from Goodlatte’s comments about the bill:

  • HR 3309 attacks behavior not specific entities
  • A year ago, not many thought this legislation would happen just two years after Congress passed a comprehensive re-write of the patent laws in the American Invents Act (AIA). “It’s pretty amazing.”
  • The AIA in many ways is “prospective,” and aimed at the issuance of better patents and greater transparency. The Innovation Act, on the other hand, is more immediate, tackling the “immediate problem” of abusive patent litigation.
  • Many patent troll suits are focused on small- and medium-sized companies, with the damages demanded set just under the cost of litigation. He characterized this as "litigation extortion," and added that something is "terribly wrong here."
  • Abusive patent litigation “strikes at the heart of innovation and the economy.

Here are some of the statements on the Innovation Act issued this week by interested parties:

Note: Thompson Coburn will present an in-person CLE program in St. Louis on Nov. 12, “Avoid the Ambush: How to Protect Your Business from Patent Assertion Entities.” Presenters are Jason Schwent, Michael Parks and Ken Salomon.

Ken Salomon is chair of Thompson Coburn Lobbying & Policy. He has been working on patent litigation reform for several years. You can reach Ken at ksalomon@thompsoncoburn.com.