United States: STRONGER Patents Act Is Likely Too Ambitious To Pass

In late June, Sen. Christopher Coons, D-Del., introduced the 115th Congress' first bill directed to patents, the Support Technology and Research for Our Nation's Growth and Economic Resilience (STRONGER) Patents Act of 2017. The bill ambitiously seeks reform of many areas of patent law, including post-grant proceedings, infringement, injunctions, and "abusive" demand letters. It also leads patent legislation in a different direction. In the 114th Congress, the central issue in patent reform was curbing the so-call "abusive NPE [nonpracticing entity] litigation practices," an effort spearheaded by the Innovation Act (H.R. 9), which would have raised the costs for enforcing patents. In contrast, the STRONGER Patents Act is generally patentee-friendly. It would make invalidating patents in post-grant proceedings harder, and make proving infringement easier. Its sweeping breadth also represents a different approach from that of the "small-fix" bills that targeted narrow areas of patent law near the end of the 114th Congress. At that time, overarching bills, such as the Innovation Act, had been stalled because of competing interests. All these developments in the prior Congress thus beg the question: How likely is the STRONGER Patents Act to pass the 115th Congress?

Patent Reform in the 114th Congress

Early in the 114th congressional term, members of the House and the Senate swiftly introduced six bills on patent reform, which included the Innovation Act and its companion bill, the Protecting American Talent and Entrepreneurship (PATENT) Act (S. 1137).1

The Innovation Act and the PATENT Act were overarching bills that aimed to curb so-called "abusive NPE litigation practices" through various means. For example, both bills required not only an identification of each patent and claim allegedly infringed, but also an element-by-element analysis of how the accused instrumentality meets all the claim limitations.

The Innovation Act demanded further pleading specificity, such as a description of the authority of the plaintiff to assert the patent and a list of complaints filed that asserted the patent. The Innovation Act also required a plaintiff, upon filing a complaint for infringement, to provide "initial disclosures," which include an identification of the assignee of the patent, any entity with a right to sublicense or enforce the patent, and the ultimate parent entity.

In addition, the Innovation Act would have made fee-shifting the default rule and always award the prevailing party reasonable fees and expenses, unless the nonprevailing party's position and conduct were "reasonably justified" or unless "special circumstances make an award unjust." The PATENT Act, on the other hand, did not go so far as making fee-shifting the default, but it required a district court to determine, upon motion, whether a nonprevailing party's position was "objectively reasonable in law and fact" and whether its conduct was "objectively reasonable."

Also, for inter partes review and post-grant review, both bills would have changed the claim construction standard from the broadest-reasonable-interpretation standard to the ordinary-and-customary-meaning standard, and would have required that the Patent Trial and Appeal Board consider claim constructions by district courts.

The six bills introduced at the beginning of the 114th congressional term also included smaller bills—the Innovation Protection Act (H.R. 1832), the Demand Letter Transparency (DLT) Act (H.R. 1896), the Targeting Rogue and Opaque Letters (TROL) Act (H.R. 2045), and the Support Technology and Research for Our Nation's Growth (STRONG) Patents Act (S. 632), the predecessor of the STRONGER Patents Act.2

The Innovation Protection Act was narrowly tailored to protect the resources of the patent system by ending fee diversion from the U.S. Patent and Trademark Office. The DLT and TROL Acts both tried to crack down on "abusive use" of demand letters, and both included provisions enabling courts to impose sanctions or reduced damages on parties improperly sending demand letters. Failure to comply with the TROL Act could also subject distributors of improper letters to penalties by the Federal Trade Commission. The STRONG Patents Act, in stark contrast to the Innovation and PATENT Acts, sought to "strengthen patents" by making them harder to invalidate through post-grant proceedings.

Because of the competing interests of numerous parties, described below, overarching patent reform became almost impossible. Instead of sweeping reforms, which often brought uncertainty and unintended consequences, narrow carve-outs where there was clear consensus seemed more practical. After the all-encompassing Innovation and PATENT Acts gradually lost steam, more targeted bills emerged in 2016. The Venue Equity and Non-Uniformity Elimination (VENUE) Act (S. 2733) sought to limit the forums where plaintiffs may bring suit, and the Trade Protection Not Troll Protection (TPTP) Act (H.R. 4829) aimed to prevent most NPEs from asserting patent infringement in the U.S. International Trade Commission.3

Provisions of the STRONGER Patents Act

Like its predecessor, the STRONGER Patents Act also seeks to "strengthen patents," but its provisions are much broader. The new bill's main focus is post-grant proceedings, specifically IPRs and PGRs created under the 2012 America Invents Act. The bill would make it harder to invalidate patents through these proceedings, which have been very popular among defendants targeted by NPE litigation. To start, it would require the clear-and-convincing-evidence standard for invalidating patents. For claim construction, it would require the ordinary-and-customary-meaning standard, which would in many instances result in narrower constructions than under the current broadest-reasonable-interpretation standard. It would also require the PTAB to consider claim constructions in district court cases to which patentee in the IPR or PGR was a party.

The bill would also limit who can file IPR and PGR petitions, limit how many petitions they can file, and bring about broader estoppel consequences. To file a petition, one must have district court declaratory judgment standing, that is, have a real and substantial patent infringement controversy with the patentee. But if a claim was reviewed in a prior IPR or PGR, the PTAB will not review it again. A petitioner, its privies, and real parties in interest cannot file subsequent petitions based on grounds the petitioner raised or reasonably could have raised. If a review of a claim is instituted, the petitioner, its privies, and real parties in interest cannot bring subsequent invalidity challenges in district courts or the ITC on the ground that the claim is invalid based on anticipation or obviousness. An exception exists when the invalidity argument is based on allegations that the claimed invention was in public use, on sale, or otherwise available to the public (i.e., arguments not available in IPRs). Real parties in interest are broadly defined—whoever provides financial contribution to the "preparation for, or conduct during" the post-grant proceeding is a real party in interest. This arguably expands the current interpretation, which typically requires some control or decision-making authority over the proceeding.

District court and ITC decisions on validity would affect IPRs and PGRs as well under the STRONGER Patents Act. A court or ITC final decision on validity based on anticipation or obviousness bars later IPRs and PGRs. If the court or ITC issues a decision while the proceeding is pending, the proceeding would be stayed. If the patent's validity is later upheld on appeal, the proceeding would be terminated.

The bill's provisions also favor patentees after institution of an IPR or PGR. A PTAB administrative patent judge that decides to institute review cannot be on the merits panel that ultimately determines validity. The patentee may appeal an institution decision, subject to the Federal Circuit's discretion, but the petitioner may not appeal a noninstitution decision. The patentee may provide a "reasonable number" of substitute claims that will be adjudicated by the PTAB or examined in an expedited re-examination, even though the patentee must make a prima facie showing that the substitute claims are valid over grounds on which the review was instituted. The substitute claims would be reviewed under the preponderance-of-the-evidence standard.

If passed, in addition to drastically changing post-grant reviews, the STRONGER Patents Act would also greatly change the landscape of infringement. It would amend 35 U.S.C. § 271(b), so that one's knowledge of a patent is not required for finding that he induced infringement by another. It would add a new § 271(f)(3), making it an act of infringement to induce the making of a patented product or the performance of a patented process overseas by providing, from the U.S. to overseas, a design for the patented product or a specification for performing the patented process. It would further add a new § 271(j), eliminating the "single-entity rule" for finding inducement of infringement or contributory infringement.

The bill would greatly affect injunctions as well. It would prescribe that upon a finding of infringement, the court shall presume the existence of irreparable injury and presume that remedies available at law are inadequate to compensate for that injury. This would automatically make two of the four eBay v. MercExchange factors required for issuing an injunction tilt in the patentee's favor.

Last, the bill includes provisions nearly identical to those of the TROL Act introduced in the 114th Congress.

What Are the Bill's Chances?

As described above, the provisions of the STRONGER Patents Act are quite sweeping. Their breadth is also highlighted by the five U.S. Supreme Court cases they would undo or drastically alter if the bill passes: eBay v. MercExchange, which relates to injunctions; Microsoft v. AT&T, which relates to extraterritorial infringement under § 271(f); Global-Tech Appliances v. SEB, which relates to the requisite intent for finding inducement of infringement; Limelight Networks v. Akamai Technologies, which relates to the "single-entity rule"; Cuozzo Speed Technologies v. Lee, which relates to the broadest-reasonable-interpretation standard for claim construction.

As the 114th Congress demonstrated, bringing such an overarching bill to a vote can be very challenging, and the STRONGER Patents Act is arguably the most radical reform proposed to date in the previous and current Congresses. The Innovation Act and the PATENT Act were marked up and approved in June 2015 by the House and the Senate Judiciary Committees, respectively. But, in July 2015, members of Congress from both parties strongly voiced opposition to the two bills.4 Other interest groups similarly voiced their dissatisfaction and opposed the bills, and thus, neither bill was ever put to a floor vote.

In the aggregate, those bills favored patent defendants. The groups supporting and opposing the bills thus fell into somewhat predictable camps. Technology companies that have largely been the target of NPE litigation generally supported the legislation, while independent inventors, startups and universities—who have concerns about legitimate patent enforcement—generally opposed the bills. But, while those bills drew support from the government and different industries, a closer look at the supporters reveals their different motives.

For example, according to opinion articles in the press, many technology companies have been targets of abusive NPE patent litigation, and unsurprisingly, they supported the Innovation and PATENT Acts, sharing former USPTO Director Michelle Lee's belief that heightened pleading standards and fee shifting would help curb the use of baseless and exploitative NPE cases.5

On the other hand, those in the pharmaceutical and biotechnology industry generally supported the bills for a wholly different reason—reforming post-grant proceedings. Starting in 2015, some companies in the industry became targets of arguably abusive post-grant proceedings filed by third parties proactively challenging patents for questionable reasons, including manipulating market conditions by casting doubt over the intellectual property of market participants. As a result, the industry began pushing for amendments to the bills that would change the evidentiary and pleading rules for post-grant proceedings.6 Such amendments were not well-received by those in the technology industry frequently targeted by NPEs, because the amendments would make it more difficult to challenge questionable patents, especially those enforced by NPEs.

In contrast, those opposed to the overarching reform seem more unified. The many critics of the Innovation and PATENT Acts included independent inventors, startups, venture-capital associations, and universities. As voiced by members of Congress representing these opponents, one of the biggest problems with the bills was their failure to effectively distinguish well-meaning inventors, startups and universities from "abusive NPEs."7 Many universities also feared that their legitimate activities in enforcing their educationally obtained technology rights will be conflated with abusive NPE tactics under the proposed fee-shifting provisions.

The above concerns from the different interest groups have largely been carried over to the STRONGER Patents Act in this Congress, having the potential to thwart its progress in the future. Predictably, many groups above have already voiced strong support for and opposition against the bill. For example, in the Biotechnology Innovation Organization's statement of support, it emphasized that "[s]trong patents are the lifeblood of the biotechnology industry."8 One coalition of startups "wholeheartedly supports this piece of legislation that aims to strengthen America's patent system."9 Also, the Association of American Universities and the Association of University Technology Managers both stated: "Universities rely on a strong patent system to ensure research discoveries can be transferred to businesses that can develop them into marketable products that improve our quality of life and fuel the economy."10 Other supporters include the American Conservative Union,11 the Innovation Alliance,12 and the Medical Device Manufacturers Association.13

On the other hand, even though technology companies have not yet directly voiced their opinions regarding the bill, those aligned with them have indicated strong opposition against it. For example, a patent counsel at the Computer and Communications Industry Association characterized the bill as something that would "gut inter partes review, and then [] make induced infringement extremely broad by overturning multiple Supreme Court decisions for good measure."14 Technology companies themselves will very likely oppose the bill given that they have historically been targets of NPE litigation, and it would make all patents, includes those held by NPEs, stronger. Many such companies have compelling voices in Congress, and it would not be surprising that their opposition would prevent the bill from going much further beyond the Senate Judiciary Committee.


At 62 pages, the STRONGER Patents Act is an ambitious attempt at patent reform, heading toward the opposite direction of where the Innovation and PATENT Acts wanted to lead. The five U.S. Supreme Court cases the bill would undo or drastically alter show how it would fundamentally change post-grant reviews and patent enforcement, moving the scale significantly in favor of patentees and away from patent defendants. But competing interests that stalled the earlier bills still exist, even though they may switch sides for the STRONGER Patents Act. Within a week after the bill's introduction, many groups have already issued strong statements for and against the bill. While some have praised it as "help[ing] inventors protect their innovations from infringement and safeguard[ing] patents as essential property rights,15 others have argued that the bill's "end result is that innovation is chilled by the threat of bad patents and baseless litigation."16 As such, the STRONGER Patents Act is unlikely to pass in its current form, and narrow carve-outs addressing specific deficiencies in the patent system may still be the best way going forward.


1 For a detailed discussion of these bills, see A Review Of Patent Bills In The 114th Congress, Lionel Lavenue et al., Law360 (http://www.law360.com/articles/664670/a-review-of-patent-bills-in-the-114th-congress).

2 Id.

3 For a detailed discussion of these two bills, see Patent Reform Beyond The Innovation Act: The VENUE Act, Lionel Lavenue et al., Law360(http://www.law360.com/articles/788794/patent-reform-beyond-the-innovation-act-the-venue-act); Patent Reform Beyond The Innovation Act: The TPTP Act, Lionel Lavenue et al., Law360 ( http://www.law360.com/articles/788810/patent-reform-beyond-the-innovation-act-the-tptp-act).

4 Steve Brachmann, Innovation Act delayed in House amid Bipartisan Bicameral Disapproval, IPWatchdog (July 15, 2015)(http://www.ipwatchdog.com/2015/07/15/innovation-act-delayed-in-house-amid-bipartisan-bicameral-disapproval/id=59858/).

5 Hearing Before the House Judiciary Committee, No. 114-20 (Apr. 14, 2015) (http://judiciary.house.gov/_cache/files/8e33d461-7e7c-49db-ad8f-b623e424485e/114-20-94184.pdf).

6 Jeff John Roberts, Patent reform inches onwards but poison pill could kill it, Fortune (June 5, 2015) (http://fortune.com/2015/06/05/patent-reform-pharma/).

7 Steve Brachmann, Innovation Act delayed in House amid Bipartisan Bicameral Disapproval, IPWatchdog (July 15, 2015)(http://www.ipwatchdog.com/2015/07/15/innovation-act-delayed-in-house-amid-bipartisan-bicameral-disapproval/id=59858/).

8 BIO Statement of Support for the Introduction of the STRONGER Patents Act of 2017 (June 21, 2017) (https://www.bio.org/press-release/bio-statement-support-introduction-stronger-patents-act-2017).

9 Coons, Cotton, Durbin and Hirono Introduce STRONGER Patents Act of 2017 (June 21, 2017) (https://www.usij.org/news-database/2017/6/21/coons-cotton-durbin-and-hirono-introduce-stronger-patents-act-of-2017).

10 University Associations Express Support for STRONGER Patents Act (June 21, 2017)(http://www.autm.net/AUTMMain/media/Advocacy/Documents/STRONGER-Patents-Act-2017-Endorsement_AUTM.pdf).

11 STRONGER Patents Act of 2017 Protects Innovators, Inventors, and Constitutional Patent System (June 21, 2017)(http://conservative.org/stronger-patents-act-2017-protects-innovators-inventors-constitutional-patent-system/).

12 Innovation Alliance Statement on Introduction of the Bipartisan STRONGER Patents Act of 2017 (June 21, 2017)(http://innovationalliance.net/from-the-alliance/innovation-alliance-statement-introduction-bipartisan-stronger-patents-act-2017/).

13 MDMA Statement on the "STRONGER Patents Act" (June 21, 2017) (http://www.medicaldevices.org/news/351142/MDMA-Statement-on-the-STRONGER-Patents-Act.htm).

14 STRONGER Patents, WEAKER Innovation, Josh Landau, Patent Progress (June 22, 2017)(https://www.patentprogress.org/2017/06/22/stronger-patents-weaker-innovation/).

15 Coons, Cotton, Durbin and Hirono Introduce STRONGER Patents Act of 2017 (June 22, 2017) (https://www.usij.org/news-database/2017/6/21/coons-cotton-durbin-and-hirono-introduce-stronger-patents-act-of-2017).

16 STRONGER Patents, WEAKER Innovation, Josh Landau, Patent Progress (June 22, 2017)(https://www.patentprogress.org/2017/06/22/stronger-patents-weaker-innovation/).

Originally printed in Law360 on June 30, 2017

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