Innovation Act Gets Reintroduced

Members of the US House of Representatives have reintroduced a bill that aims to introduce changes designed to deter patent holders and non-practicing entities (NPE) from targeting businesses and end-consumers with frivolous infringement lawsuits. Get more on the bill after the break!

What it is

The Innovation Act bill was reintroduced by House Judiciary Committee chairman Rep. Bob Goodlatte (R-VA). The bill was passed by the house more than a year ago, but it was quickly rejected by Sen. Patrick Leahy (D-VT) and Sen. Majority leader Harry Reid (D-NV). The co-sponsors of the reintroduced Innovation Act are Reps. Peter DeFazio (D-Ore.), Darrell Issa (R-Calif.), Anna Eshoo (D-Calif.), and Lamar Smith (R-Texas), among others.

The new bill is mostly similar to the old Innovation Act. The Innovation Act bill introduces reforms to the way a patent infringement lawsuit progresses in court.

Breakdown

Some of the changes to the patent litigation process in the Innovation Act include:

  • Pleading Requirement – Under the new act, patent holders claiming infringement will have to specify exactly which part of the product is violating their patent, making it easier for defendants to build up their case.
  • Fee Shifting – The party filing the lawsuit will be liable to pay reasonable fees and other expenses if it loses the patent litigation. Companies that are backing the filing party are also liable to pay the legal fees under the new act.
  • Limited Discovery – According to this proposed change, discovery will be limited to patent claims until the ‘claims construction’ phase of the lawsuit is over. Discovery usually involves going through thousands of documents and can have a significant impact on the costs of the litigation.
  • Transparency – The Innovation Act will make it mandatory for patent holders to provide the names of patent assignees or any entity that has financial interest in the patent. This reform will force patent owners to disclose the names of the ‘ultimate parent entity’ that is actually bringing the lawsuit. If the patent changes hands, then the plaintiff will have to report the change to the patent office.
  • Protecting End-Users – In some cases, any litigation brought against the end-users of an accused infringing product by the patent holder will be put on hold until the outcome of the lawsuit between the patent holder and the manufacturer of the product is decided by the courts.

 

Some technology lobbyist groups, retailers and start-ups have hailed the Innovation Act as a huge step forward in protecting small businesses. The Computer & Communications Industry Association (CCIA) said in a statement:

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.

 

Meanwhile, the Innovation Alliance said in a statement that the bill could weaken the patent system and have an adverse impact on innovation and job creation in the United States:

Reports are that the bill is virtually identical to what was introduced in the House in 2013, as if none of these developments had taken place, and as if the patent landscape is precisely the same as it was more than a year ago. This will unfortunately cause many innovators to question whether Congress is paying sufficient heed to the effects of these developments on our patent system and economy, and the long-term risks of over-legislating and increasing the costs and time associated with enforcing inventors’ valid patents.

 

Will the new Innovation Act help boost or reduce innovation? Tell us your opinion in the comments section below!

Patent Searches from Landon IP

This post was contributed by Abhishek Tiwari. The Intellogist blog is provided for free by Intellogist’s parent company Landon IP, a major provider of patent searches, trademark searches, technical translations, and information retrieval services.

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