On June 11, 2015, the House Judiciary Committee voted 24-8 to approve the Innovation Act of 2015,1 a bill aimed to curb abusive litigation by so-called patent trolls. "Today in this committee, we are taking a pivotal step toward eliminating the abuses of our patent system, discouraging frivolous patent litigation and keeping U.S. patent laws up to date," said Committee Chairman Bob Goodlatte.2
Mr. Goodlatte, who introduced the legislation last April, said the Innovation Act would take the "necessary steps to address abusive patent litigation while protecting legitimate property rights."3 Opponents say the legislation is overly broad and infringes on patent holders' property rights by making it more difficult to defend their patents. "The Innovation Act . . . is another big government overhaul that would undermine our patent system and reward a few large, multinational tech giants . . . who seek to weaken the intellectual property rights found in our Constitution," said Ken Blackwell, former Ohio secretary of state.4
One of the reforms contained in the bill is a heightened pleading requirement for all patent cases. Under the current bill, a party alleging patent infringement would be required to plead specified details concerning each claim of each patent allegedly infringed, and how each limitation of each asserted claim is found within each accused product or method (if the information is reasonably accessible).5
The bill also requires courts to award prevailing parties reasonable fees and other expenses incurred in connection with the litigation unless (1) the conduct of the non-prevailing party was reasonably justified in law and fact, or (2) special circumstances, such as severe economic hardship to a named inventor, make an award unjust.6 This would widely expand the availability of attorney fees and other expenses from what is permitted under the current rule, which provides that attorney fees are available only in exceptional cases.7
The bill also contains provisions intended to limit discovery until after a claim construction ruling.8 Where a claim construction ruling is dispositive, this would greatly reduce the overall costs of litigation and discourage patent owners from entering a settlement with so-called patent trolls at the outset of litigation.
Opponents claim that the fee-shifting provisions of the Innovation Act would significantly decrease the value of valid patents because such provisions reduce the likelihood that patent owners would enforce their patents.9 Though the fee-shifting provisions are supposedly aimed at reducing frivolous litigation commenced by owners of questionable patents, the practical effect, opponents argue, would be that patent owners will be unwilling to assume the risk of commencing litigation and potential infringers will be incentivized to ignore patents.10 Opponents also claim that the heightened pleading standards and discovery limitations will require plaintiffs to plead facts they cannot know without discovery.11
The bill will now make its way to the House floor for a full vote. President Obama has expressed support for patent reform, and a patent reform bill in some form may become law by the end of the year.12
1. See H.R. 9 Innovation Act, 114th Congress (2015-16), available at congress.gov/bill/114th-congress/house-bill/9/text
2. Ryan Davis, Patent Troll Bill Advances With House Panel's Endorsement, Law360 (June 11, 2015), available at law360.com/ip/articles/665466/patent-troll-bill-advances-with-house-panel-s-endorsement
3. Kellan Howell, House Committee Advances Patent Reform in Bipartisan Vote, The Washington Times (June 11, 2014).
5. H.R.9 Innovation Act Summary, 114th Congress (2015-16) at 1.
6. H.R.9 Innovation Act Summary – 114th Congress (2015-16) at 2.
7. Glenn Forbis, The Ups and Downs of the Innovation Act of 2015, IPWatchdog (May 27, 2015), available at ipwatchdog.com/2015/05/27/the-ups-and-downs-of-the-innovation-act-of-2015/id=58075
8. H.R.9 Innovation Act Summary – 114th Congress (2015-2016) at 2.
9. Glenn Forbis, The Ups and Downs of the Innovation Act of 2015, IPWatchdog (May 27, 2015), available at ipwatchdog.com/2015/05/27/the-ups-and-downs-of-the-innovation-act-of-2015/id=58075
11. Ryan Davis, Patent Troll Bill Advances With House Panel's Endorsement, Law360 (June 11, 2015), available at law360.com/ip/articles/665466/patent-troll-bill-advances-with-house-panel-s-endorsement
12. Kellan Howell, House Committee Advances Patent Reform in Bipartisan Vote, The Washington Times (June 11, 2014).
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