WASHINGTON (Legal Newsline) - The markup of one of the more aggressive pieces of patent reform legislation has been delayed.
Last week, The Hill reported that the U.S. House Judiciary Committee planned to mark up H.R. 9, more commonly known as the Innovation Act.
However, House Judiciary Chairman Bob Goodlatte -- also the legislation’s lead sponsor -- decided to hold off after some concerns were raised about the bill.
A number of special interest groups said they are relieved the committee chose to wait.
They include: the Association of American Universities (AAU), the Association of American Medical Colleges (AAMC), the Association of Public and Land-Grant Universities (APLU), the Association of University Technology Managers (AUTM), the Council on Government Relations (COGR), the Innovation Alliance (IA), the Medical Device Manufacturers Association (MDMA), the National Venture Capital Association (NVCA) and the Alliance of U.S. Startups and Inventors for Jobs (USIJ).
“As representatives of a broad coalition of universities, inventors, manufacturing technology and life science companies, venture capitalists and startup communities, we welcome the House Judiciary Committee’s decision to delay the markup of H.R. 9, the ‘Innovation Act,’” they said in a joint statement.
“The patent system has proven itself to be an essential engine for innovation and economic growth throughout U.S. history. It is critical that Congress take the time to get it right before making further comprehensive changes to that system.”
The groups argue that any new patent legislation should address abusive patent litigation but without risking harm to the value and enforceability of legitimate patents.
“It is clear that H.R. 9 needs substantial work to prevent it from substantially damaging the innovation ecosystem,” they said.
The bill, reintroduced by Goodlatte, R-Va., in February, 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. Goodlatte says this will ensure that patent trolls cannot hide behind a web of shell companies to avoid accountability for bringing frivolous litigation;
- Plaintiffs to actually explain why they are suing a company in their court pleadings;
- 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;
- The U.S. 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; and
- The U.S. Patent and Trademark Office to provide educational resources for those facing abusive patent litigation claims.
Also, 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.
The measure also 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.
The House Judiciary Subcommittee on Courts, Intellectual Property and the Internet held a hearing on the legislation in March.
Goodlatte told fellow lawmakers at the time that his bill both targets abusive behavior and doesn’t attempt to eliminate valid patent litigation.
“When we use the term ‘patent troll’ it is more of an adjective describing behavior than a noun,” he said at the hearing. “Our goal is to prevent individuals from taking advantage of gaps in the system to engage in litigation extortion.”
His bill also doesn’t diminish or devalue patent rights, he argues.
“Supporters of this bill understand that if America’s inventors are forced to waste time with frivolous litigation, they won’t have time for innovation,” Goodlatte said.
“And that’s what innovation is really about, isn’t it? If you’re able to create something, invent something new and unique, then you should be allowed to sell your product, grow your business, hire more workers and live the American dream.”
It is unclear when the judiciary committee will mark up the bill.
From Legal Newsline: Reach Jessica Karmasek by email at patents@legalnewsline.com.