United States: US Congress Proposes A Litany Of Solutions To Patent Troll Suits

Even after years of refining the laws that were eventually enacted as the America Invents Act in 2011, some members of Congress seek to curb litigation initiated by certain non-practicing entities ("NPE") and reduce the cost and burden of patent litigation by implementing a "loser-pays" model, expanding post-grant review procedures for challenging the validity of patents, requiring recordation of patent ownership rights, and heightening pleading requirements.

Shield Act

The Saving High-Tech Innovators from Egregious Legal Disputes Act ("Shield Act"), introduced by Rep. Peter A. DeFazio, D-Ore., on February 27, 2013 (H.R. 845), defines a non-practicing entity as a patent owner who did not have anything to do with the invention claimed in the patent and does not exploit it by making a product. The Shield Act requires an NPE to pay the litigation costs of defendants should its infringement suit be unsuccessful. The proposed legislation would allow an accused infringer to move for a determination that the patent owner is an NPE early in litigation. Under the bill, a company is deemed not to be an NPE if it is the original inventor or assignee of the patent, it is a university or technology transfer organization associated with a university, or it has made "substantial investment ... in the exploitation of the patent through production or sale of an item covered by the patent." The party asserting the patent would have 90 days to make such a showing, and the presiding judge would then have 120 days to rule on the motion. A company found to be an NPE would be required to post a bond to cover the full costs of litigation, which the accused infringer can recover if it prevails in the litigation.

Unlike similar previously proposed legislation, the new bill would apply to all patents, not just those claiming computer hardware and software.

Patent Quality Improvement Act

The Patent Quality Improvement Act, introduced by Sen. Charles E. Schumer, D-NY, on May 6, 2013 (S. 866), aims to expand US Patent and Trademark Office (USPTO) procedures for challenging the validity of patents. Under current law, patents can be challenged at the USPTO under a post-grant review if those patents claim "a method or corresponding apparatus for performing data processing or other operations used in the practice, administration or management of a financial product or service." The current law has a sunset provision calling for the program to expire in 2020. This bill would remove the sunset provision and expand the scope of the post-grant review by replacing the words "financial product or service" and with "an enterprise, product or service."

End Anonymous Patents Act

The End Anonymous Patents Act, introduced by Rep. Ted Deutch, D-Fla., on May 16, 2013 (H.R. 2024), seeks to make the ownership of patents a matter of public record. Current procedures can make it difficult to determine the actual owner of a patent, so this bill would require ownership information about patents to be recorded with the USPTO when applying for a patent, paying maintenance fees, or transferring ownership. Failure to comply with these requirements would limit potential monetary damages to the period of time beginning with the date on which the requirement is met.

Patent Abuse Reduction Act

The Patent Abuse Reduction Act, introduced by Sen. John Cornyn, R-Texas, on May 22, 2013 (S. 1013), provides defendants in patent lawsuits with more information about the plaintiff and its allegations against them. The bill would further require the losing party to bear court costs and some expenses. The bill heightens pleading requirements in patent infringement actions, requiring that the complaint include: identification of each product or feature alleged to infringe the patent, including name or model number; an explanation of how the asserted claim corresponds with the accused function "with detailed specificity;" a description of the plaintiff's principal business and right to assert the patent; and a list of every other suit in which the patent has been asserted. The model patent infringement complaint form under the Federal Rules of Civil Procedure currently only requires minimal information, such as a statement that the plaintiff owns the patent and the defendant infringes.

The bill would also require a party requesting discovery in a patent action to cover the cost of all discovery beyond "core documentary evidence," which would be limited to documents that relate to the conception of the patent, potentially invalidating prior art, and several other issues. Under the proposed language of the bill, "core evidence" would not include computer code or electronic communications, such as email, absent a finding of good cause to treat it as such. Further, parties would be precluded from conducting discovery on anything beyond core evidence unless the requesting party pays the other party based on the anticipated costs of the discovery. The bill would also mandate that the prevailing party in patent litigation always be awarded reasonable costs and expenses, including attorneys' fees, unless "the position and conduct of the non-prevailing party were objectively reasonable" or "exceptional circumstances make such an award unjust."

Comprehensive Proposal

House Judiciary Committee Chairman Bob Goodlatte, R-Va., and Sen. Patrick Leahy, D-Vt., offered a comprehensive proposal on May 23, 2013 (Discussion Draft) that includes features from nearly all of the other bills discussed above. The proposed bill imposes stricter pleading requirements on patent complaints, limits discovery in patent cases, and allows manufacturers of allegedly infringing products to intervene when their customers are sued. It has not been formally introduced in Congress, though Leahy said he plans to introduce separate legislation soon.

Adopting ideas introduced by other recent proposed legislation, this discussion draft would restrict available discovery in patent litigation to "core documentary evidence" and require parties seeking additional discovery to bear the associated cost. The legislation would also heighten pleading requirements, mandating that patent infringement complaints specifically identify the alleged infringing products as well as the plaintiff's infringement theories. The legislation also requires patent applicants to disclose to the USPTO information about the true owner of the patent. The draft includes numerous other provisions, including creating a process to incentivize settlements in patent cases, requiring the USPTO to conduct outreach to help small businesses accused of infringement, and amending the post-grant procedures created by the America Invents Act.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
6 Dec 2017, Webinar, New York, United States

Join Dentons for a complimentary webinar focused on the ongoing challenge of integrating new technologies into existing information governance policies and risk management frameworks.

7 Dec 2017, Seminar, Cape Town, South Africa

Dentons South Africa would be delighted if you could join us for our upcoming event.

8 Dec 2017, Seminar, Johannesburg, South Africa

Dentons South Africa would be delighted if you could join us for our upcoming event.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.