HOUSE PASSES INNOVATION ACT TO MAKE REFORMS TO OUR PATENT SYSTEM
WASHINGTON, D.C. – The House of Representatives today approved H.R. 3309, the Innovation Act by an overwhelming bipartisan vote of 325-91. This bipartisan bill takes steps to combat the ever increasing problem of abusive patent litigation.
House Judiciary Committee Chairman and chief sponsor of the Innovation Act Bob Goodlatte applauded the bill’s passage:
“In recent years, we have seen an exponential increase in the use of weak or poorly-granted patents by so-called patent trolls to file numerous patent infringement lawsuits against American businesses with the hopes of securing a quick payday. Everyone from independent inventors, to start-ups, to mid and large sized businesses face this constant threat.
“The enactment of the Innovation Act is something I consider central to U.S. competiveness, job creation, and our nation’s future economic security. The bipartisan legislation takes meaningful steps to address the abusive practices that have damaged our patent system and resulted in significant economic harm to our nation. I am encouraged by the overwhelming support the Innovation Act received in the House and I look forward to working with the Senate to see that patent litigation reform legislation is signed into law.”
Background on the Innovation Act:
• Requires plaintiffs to disclose who the owner of a patent is before litigation, so that it is clear who the real parties behind the litigation are. This will ensure that Patent Trolls cannot hide behind a web of shell companies to avoid accountability for bringing frivolous litigation.
• Requires plaintiffs to actually explain why they are suing a company in their court pleadings.
• Requires courts to make decisions about whether a patent is valid or invalid early in the litigation process so that Patent Trolls cannot drag patent cases on for years based on invalid claims. This prevents invalid patents from being used to extort money from retailers and end users.
• When parties bring lawsuits or claims that have no reasonable basis in law and fact, the Innovation Act requires judges to award attorneys’ fees to the victims of the frivolous lawsuit. The bill allows judges to waive the award of attorneys’ fees in special circumstances. This provision applies to both plaintiffs and defendants who file frivolous claims.
• Requires the Judicial Conference to make rules to reduce the costs of discovery in patent litigation, so that Patent Trolls cannot use the high costs of discovery to extort money from small businesses and entrepreneurs.
• Creates a voluntary process for small businesses to postpone expensive patent lawsuits while their larger sellers complete similar patent lawsuits against the same plaintiffs, to protect customers who simply bought the product off-the-shelf.
• Requires PTO to provide educational resources for those facing abusive patent litigation claims.
The Innovation Act is supported by a wide range of groups that include stakeholders from all areas of our economy representing businesses of all kinds from every corner of our country including independent inventors and innovators.