Flurry of Bills to Reduce Litigation by Patent Trolls

It appears that Congress has had enough of the litigation tactics by so-called patent trolls, non-practicing entities (NPEs) that accumulate patents with the goal of licensing or otherwise asserting them against companies that make and sell products.

As noted earlier, the SHIELD Act in the House in February (and in the last Congress) to require losing NPEs to pay the costs of litigation.  A few weeks ago, a new business method review bill was introduced in the Senate.

Now, several more bills have been or shortly may be introduced in Congress.

End Anonymous Patents Act

Rep. Ted Deutch (D-FL) introduced the End Anonymous Patents Act, H.R. 2024, that would require parties that apply for or acquire patents to publicly reveal the real party in interest.  The bill is designed to prevent NPEs from using shell corporations to hide the real owners of patents.  The real party must be revealed when a patent application is filed, when maintenance fees are paid, and when ownership is transferred.  Damage awards would be limited to the time period from which this requirement is met.

Patent Abuse Reduction Act

Sen. John Cornyn (R-TX) introduced the Patent Abuse Reduction Act, S. 1013, that would add a number of new requirements for patent litigation.

The bill would require a heightened pleading requirement where complaints would be required to identify asserted patent claims and accused products “with heightened specificity.”  Complaints must detail the plaintiff’s principal business and its right to assert the patent, as well as an indication of other suits where the patent has been asserted.

The bill includes dramatic limits on discovery.  Discovery will generally not commence until after a claim construction ruling and will be limited to “core evidence” such as conception of the invention and invalidating prior art.  Requests for additional discovery, such as e-mails and other electronic evidence, must be approved by the court and requires that the requesting party pay for such discovery.

The bill includes a presumption of an award of attorneys’ fees to the prevailing party.  The court should award such fees to the prevailing party unless “the position and conduct of the non-prevailing party was objectively reasonable” or “exceptional circumstances make such an award unjust.”

Another Bill on Horizon

IP360 (subscription) is reporting that House Judiciary Committee Chairman Bob Goodlatte (R-VA) and Senate Judiciary Committee Chairman Patrick Leahy (D-VT) are circulating a draft bill that is also aimed at ending abusive litigation tactics.

The bill sounds similar to S. 1013 in that it would impose the heightened pleading requirements and limits on discovery.  The bill would also permit manufacturers to intervene in infringement suits that target their customers.  This targeting tactic is sometimes used to pressure manufacturers into settlement.

Finally, this bill includes provisions to encourage settlement of patent infringement suits, changes to post-grant review under the AIA, and requires the PTO to conduct outreach to assist small businesses accused of patent infringement (adding more requirements to the PTO sounds like a great idea after Congress diverts more PTO fees).

***

There is enough rumbling on Congress to predict that something might pass this year.  The question is whether Congress can agree on what that should be.  House Judiciary Committee Ranking Member John Conyers (D-MI) and House Intellectual Property Subcommittee Ranking Member Melvin Watt (D-NC) are urging Congress to wait to act until a planned report on patent litigation from the Government Accountability Office is received by Congress.

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2 Responses to “Flurry of Bills to Reduce Litigation by Patent Trolls”

  1. What’s Next for Patent Trolls? | INVENTIVE STEP Says:

    […] A blog dedicated to a discussion of patent law issues and strategies « Flurry of Bills to Reduce Litigation by Patent Trolls […]

  2. GAO Report Finds Patent Trolls are Not the Problem With Litigation | INVENTIVE STEP Says:

    […] Congress had anticipated that reports such as this would confirm its hysteria related to patent trolls, this turned out not to be the case at all.  The increase in litigation […]

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