House Judiciary Committee Approves Patent Reform Bill
The House Judiciary Committee today approved the Innovation Act (H.R. 3309) by an overwhelming vote of 33-5. This bipartisan bill takes steps to combat the ever increasing problem of abusive patent litigation. The legislation addresses abusive practices taking place in our courts.
Rep. Zoe Lofgren (D-Calif.) joined House Judiciary Committee Chairman and chief sponsor of the Innovation Act Bob Goodlatte (R-Va.), Representative Peter DeFazio (D-Ore.), Subcommittee on Courts, Intellectual Property, and the Internet Chairman Howard Coble (R-N.C.), and senior member of the Subcommittee on Courts, Intellectual Property, and the Internet in praising today's Committee vote.
Representative Lofgren: "The bipartisan, wide margin of support in the Judiciary Committee shows the depth of concern about abusive patent litigation. Amendments during the markup improved the bill and further efforts to resolve additional issues will receive attention between today and House floor action. Today was an important step forward for startups, inventors and U.S. innovation. The American economy – and job creation – will benefit from these efforts."
Chairman Goodlatte: "Abusive patent litigation is having a significant impact on American innovation, needlessly costing small and large businesses alike tens of billions of dollars every year – resources that could have been used to create innovative new products and services.
"Today's Judiciary Committee passage of the Innovation Act takes a pivotal step toward eliminating the abuses of our patent system by discouraging these frivolous patent lawsuits. The Innovation Act contains needed reforms to address the issues that businesses of all sizes and industries face from patent troll-type behavior, while keeping in mind several key principles, including targeting abusive behavior rather than specific entities, preserving valid patent enforcement tools, preserving patent property rights, promoting invention by independents and small businesses, and strengthening the overall patent system.
"This legislation will help fuel the engine of American innovation and creativity, help create new jobs and grow our economy."
Representative DeFazio: "Patent trolls drain tens of billions of dollars a year from the productive economy simply by threatening American innovators. In 2011 alone they extracted an estimated $29 billion. Small companies cannot afford drawn out legal proceedings so they are forced to expend precious capital on settling with trolls even if they do not infringe on their patent. Passing the bipartisan Innovation Act out of Committee today is a significant step toward ensuring patent trolls take responsibility for their abusive lawsuits."
Subcommittee Chairman Coble: "H.R. 3309 goes a long way in preventing frivolous patent lawsuits, which stifle innovation and affect virtually every business sector in America. These lawsuits are targeted at any viable defendant, large or small, and are rarely litigated because the cost to win is greater than the cost to settle. If enacted, the new rules for litigating or threatening litigation will deter bogus suits because H.R. 3309 balances the costs of litigation. Furthermore, it does so without undermining the ability of rightful patent owners to assert their rights, if their patent is being infringed."
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.
Key Components of the Innovation Act:
- Target Abusive Patent Litigation: The bill targets abusive patent litigation behavior and not specific entities with the goal of preventing individuals from taking advantage of gaps in the system to engage in litigation extortion. It does not attempt to eliminate valid patent litigation.
- Protects the Patent System: The patent system is integral to U.S. competitiveness. This legislation does not diminish or devalue patent rights in any way.
- Increases Transparency: This legislation includes heightened pleading standards and transparency provisions. Requiring parties to do a bit of due diligence up front before filing an infringement suit is just plain common sense. It not only reduces litigation expenses, but saves the court's time and resources. Greater transparency and information is a good thing and it makes our patent system stronger.
- Modernizes Fee Shifting: The legislation includes a modernized version of Section 285 fee shifting that is fair, clear and will ensure consistent judicial determinations.
- Provides Greater Clarity: The legislation provides for more clarity surrounding initial discovery, case management, joinder and the common law doctrine of customer stays. The bill works hand-in-hand with the procedures and practices of the Judicial Conference and the courts.
- Small Business Education: The bill provides for small business education and outreach by the U.S. Patent and Trademark Office.