The Innovation Act of the 113th Congress (H.R. 3309) was a bill that would change the rules and regulations surrounding patent infringement lawsuits in an attempt to reduce patent lawsuits. The version of this bill in the 113th United States Congress was passed by the House on December 5, 2013, but was never passed by the United States Senate. Instead, the Senate responded with several bills, including the Patent Transparency and Improvements Act (S. 1720); in December 2013, the full Senate Judiciary Committee held a hearing on the topic. In April 2014, the U.S. Supreme Court decided Octane Fitness, LLC v. ICON Health & Fitness, Inc., which shifted lawyer's fees for "frivolous" patent suits to the plaintiff, reducing the incentive to file illegitimate suits in the hope of inducing a settlement. In May 2014, Senator Patrick Leahy, the Chairman of the Senate Judiciary Committee, announced he was "taking the patent bill off [their] agenda" due to a failure of the House and Senate to "combat the scourge of patent trolls on our economy without burdening the companies and universities who rely on the patent system every day." The bill was reintroduced in the 114th United States Congress in February 2015 by its original sponsor, Rep. Bob Goodlatte (R, VA-6), as the Innovation Act of the 114th Congress (H.R. 9). That bill would have changed the rules and regulations surrounding patent infringement lawsuits in an attempt to reduce enforceability of patents. It was sent to the House on June 11, 2015 but was not voted by the House or the Senate.
Innovation Act of the 113th Congress
Background In 2013, patent litigation had significantly increased since 2011, when the Leahy–Smith America Invents Act—the most recent patent law—was passed. The litigation moved from targeting mostly tech companies to targeting restaurants, grocery stores, and other businesses in non-tech industries, building additional support for a new law. The law allowed patent owners to file complaints that specify what products they think infringe their patents or fail to identify specifically which claims from their patents they are asserting. The revelation of such details can be delayed until the discovery phase, which is often expensive. For example, the discovery stage of a single patent case against SAS Institute required the company to produce over 10 million documents, costing the defendant over 1.5 million dollars; the plaintiff ended up identifying fewer than 2000 documents as evidence, and lost by summary judgment. Patent owners could sue customers and other end-users using a product that the plaintiff claimed violates their patent, sometimes before or in lieu of the company making the product. Examples include the following:
Patent holder Lodsys targeted users of mobile application development software who were using in-app upgrade features provided by software development kits from Apple and Google. MPHJ Technology, which claims to own technology for scanning documents to email, demanded companies using that feature pay nearly $1,000 per employee for using it Innovatio, the holder of a patent claimed to be Wi-Fi-related, targeted coffee shops and hotels offering guests Wi-Fi access. Personal Audio demanded license payments from podcasters such as Marc Maron who used commercial off-the-shelf software to distribute their podcasts.
Provisions of the bill The bill would create additional requirements as part of the legal process associated with patent infringement under United States law. One requirement would be for the plaintiffs filing the lawsuit to be more specific about the alleged violation, making it harder for them to file a vague claim of infringement. The bill would require "a party alleging infringement in a civil action involving a claim for relief arising under any Act of Congress relating to patents to include in the court pleadings, unless the information is not reasonably accessible, specified details concerning: (1) each claim of each patent allegedly infringed, including each accused apparatus, feature, function, method, service, or other accused instrumentality; (2) the person alleged to be the direct infringer for each claim alleged to have been infringed indirectly; (3) the principal business of the party alleging infringement; (4) each complaint filed that asserts any of the same patents; and (5) whether the patent has been declared essential, potentially essential, or having potential to become essential to any standard-setting body as well as whether the United States or a foreign government has imposed any specific licensing requirements." The bill would also require plaintiffs that lose their suit to pay the costs incurred by the winning defendant.
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