“The Innovation Act of 2013” – Representative Goodlatte Introduces New Bill Seeking to Curb Perceived Patent Litigation Abuses

On October 23, 2013, House Judiciary Committee Chairman Robert Goodlatte introduced “The Innovation Act of 2013.” (H.R. 3309) The bill is in response to perceived abuse of the patent litigation system by Non-Practicing Entities (referred to derogatorily as “Patent Trolls.”) The bill is being distinguished from other recent reform proposals on the basis that it “target[s] abusive behavior rather than specific entities.”  The bill’s authors have been careful to note that it does not attempt to eliminate valid patent litigation.  Rather, the stated goal is “preventing individuals from taking advantage of gaps in the system to engage in ‘litigation extortion.’”

Some of the key highlights of the bill are:

1.         Heightened pleading requirements.  Without limitation, the bill would require Plaintiffs to provide: i) an identification of each patent and each claim allegedly infringed; ii) an explanation as to where each element of each claim is found in each “accused instrumentality”; iii) whether each element is infringed literally or under the doctrine of equivalents; iv)  how the terms of each claim correspond to the functionality of the accused instrument; v) for any indirect infringement, a description of the direct infringement and any acts allegedly inducing or contributing thereto; vi) allege indirect infringement; vii) a description of the “right” of the party to assert infringement, viii) a description of the principal business of the party alleging infringement; and ix) a list of all infringement complaints involving the same patent(s).

2.         Joinder.  The bill would allow joinder of an “interested party” where a defendant shows the plaintiff has no substantial interest in the patent other than asserting it in litigation.  “Interested Party” is defined to include: i) assignees of the patent; ii) persons with a right to enforce or sublicense the patent; iii) persons with a direct financial interest in the patent, including attorneys and law firms representing the plaintiff;

3.         Attorneys Fees to the Prevailing Party. The bill provides that the court “shall” award reasonable fees and other expenses to the prevailing party unless the position of the non-prevailing party was “substantially justified” or “special circumstances make an award unjust.”  Of note – the bill expressly allows prevailing defendants to collect fee awards from non-plaintiffs having a substantial interest in the patent-at-issue.

4.         Limitations on Discovery.  The bill would allow only limited discovery until after claim construction.

The bill also contains substantive changes to the AIA’s new IPR and PGR proceedings.  First, the bill seeks to limit PGR estoppel. Under the AIA, PGR creates estoppel for “any ground that the petitioner raised or reasonably could have raised. . .” 35 U.S.C. § 325(e) (italics added.)  The bill would narrow such estoppel solely to grounds actually raised.  The authors of the bill presumably want to promote use of PGR by limiting estoppel concerns.

Second, the bill seeks to change the PTO’s longstanding practice of applying the broadest possible claim construction in review proceedings.  The proposed bill would require the PTO to “constru[e] each claim of the patent in accordance with the ordinary and customary meaning of such claim as understood by one of ordinary skill in the art and the prosecution history pertaining to the patent.” To the extent the authors of the bill are seeking to curtail NPE litigation, one wonders why they would propose a narrower claim construction, thereby making it easier for the NPEs’ patents – many of which are perceived to be obvious and overbroad — to survive review.

To see why former USPTO Director Kappos supported and favored continuing application of the broadest possible claim interpretation see http://www.uspto.gov/blog/director/entry/ensuring_quality_inter_partes_and.

http://www.uspto.gov/blog/director/entry/ensuring_quality_inter_partes_and

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Posted on October 28, 2013, in Patent, Procedure. Bookmark the permalink. Comments Off on “The Innovation Act of 2013” – Representative Goodlatte Introduces New Bill Seeking to Curb Perceived Patent Litigation Abuses.

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