IP News

As of this writing, several patent litigation reform bills are pending in the Senate and the House. On Oct. 24, 2013, House Judiciary Chairman Goodlatte introduced his Innovation Act, H.R. 3309, and a substitute bill on November 18. On Oct. 30, 2013, Senate Judiciary Committee Chairman Hatch introduced Patent Litigation Integrity Act, S.1612. And on Nov. 18, 2013, Hatch and two co-sponsors introduced another patent litigation reform bill, the “Patent Transparency and Improvements Act of 2013,” S. 1720.'The stated goal of these and the other litigation reform bills that have been introduced this year is to counter abusive litigation practices by so-called “non-practicing entities” (NPEs, also called “patent assertion entities,” or “trolls”) ' companies that own patents but do not manufacture or sell the patented products or services, using instead the patents' power to exclude others to obtain royalty payments from companies practicing the patented inventions.

The main provisions that exist in some form in both the House and Senate bills are: 1) a revised '285 of title 35 of the United States Code, mandating that a losing party pay winning party's attorneys' fees and expenses, unless the losing party can demonstrate that its position was “substantially justified;” 2) transparency of patent ownership provision, containing a new requirement for the patentee to disclose anyone with a financial interest in either the patents or the patentee, and its “ultimate parent entity”; 3) a customer-suit exception provision, allowing stays of actions against customers if a customer agrees to be bound by the outcome of the suit against the manufacturer; 4) protection of IP licenses in bankruptcy; 5) a codification of obviousness-type double-patenting for first-inventor-to-file patents; 6) a provision narrowing estoppel against the petitioner in a post-grant review proceeding to grounds actually raised during the proceedings; and 7) a provision requiring the PTAB to use a district-court claim construction standard instead of the USPTO's “broadest reasonable interpretation” in Post-Grant and Inter Partes Reviews proceedings. See, H.R. 3309, S. 1612, S. 1720. In addition, the Senate Bill S. 1720 contains a section bringing certain baseless “bad-faith” demand letters under the FTC rules, as an unfair or deceptive trade practice. A separate bill addressing demand letters, the “Demand Letter Transparency Act,” was introduced in the House on Nov. 19, 2013.