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Calif. farmers: Innovation Act could deter investment in research

By Jessica M. Karmasek | Jun 1, 2015

WASHINGTON (Legal Newsline) - Count California’s farmers among those against House-introduced patent reform legislation.


In a letter sent to U.S. Rep. Bob Goodlatte, R-Va. and lead sponsor of H.R. 9, also known as the Innovation Act, members of the state’s agriculture community argue the bill will have “unintended consequences” and could deter investment in university research, American companies and other research and development in the country.


“The Innovation Act/H.R. 9 actually reduces protections for patent holders and could ultimately weaken U.S. patents overall,” they wrote Goodlatte, as well as members of California’s Congressional delegation.

Those signing the letter include: the California Association of Wheat Growers, California Cotton Ginners and Growers Associations, California Farm Bureau Federation, El Dorado County Farm Bureau, Fresno County Farm Bureau, Horizon Nut Company, Monterey County Farm Bureau, Orange County Farm Bureau, Sacramento County Farm Bureau, San Joaquin County Farm Bureau, Santa Barbara County Farm Bureau, Shasta County Farm Bureau, Sonoma County Farm Bureau, Tulare County Farm Bureau, and the Western Agricultural Processors Association.


“As proud members of California’s research-based economy, we understand the importance of strong patent protections to continue to develop new innovative products and solutions for customers in our state and around the globe,” they wrote in the May 21 letter. “Our strong patent system is the fuel for an economic engine that employs 7,386,553 here in California.”


They continued, “Companies, universities and individual inventors rely on patents to attract investment to make, market or license the creation of new -- and by definition -- useful products. This is a cycle that allows them to reinvest in future R&D if not just cover costs.”


Agricultural innovation, the farmers noted in their two-page letter, depends on “clear, predictable and enforceable” patent rights in developing new products used to produce healthful food, protect crops, preserve the environment, and improve human and animal health.


“Companies and universities expend tremendous resources researching and developing economically and environmentally beneficial technologies to help feed, fuel, clothe and heal people and animals. But developing new products is a slow, uncertain and expensive process,” they wrote. “Commercializing a single product can take a decade or longer and cost more than $100 million.


“Strong patents are critical to ensure return on investments of time and money and support future investments in an industry that directly benefits American agricultural producers.”


The farmers said they are concerned that H.R. 9, as currently drafted, will discourage investment by making patent rights more difficult to enforce and more challenging to cross-license agricultural technologies.


The Innovation Act, they argue, also hinders the ability of legitimate patent holders to quickly resolve patent disputes.


In addition, they contend any changes made to the patent system should consider the “misuse” of post-grant review proceedings at the U.S. Patent and Trademark Office. The farmers argue the process unfairly increases the burden on patent holders when defending their patents.


“H.R. 9 does not go nearly far enough to fix the problems we now see with inter partes review,” they wrote. “Using a more lenient ‘preponderance of the evidence’ standard in IPR and post grant review proceedings, the PTO promotes inconsistent outcomes between the Patent Trial and Appeal Board and district courts.


“Therefore, patent claims should be presumed valid in post-grant review proceedings and a challenger should have to prove invalidity by clear and convincing evidence as in district court.”


H.R. 9, reintroduced by Goodlatte 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 PTO 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 U.S. House Judiciary Committee had planned on holding a markup of the legislation in May; however, it was delayed after some concerns were raised about the bill.


From Legal Newsline: Reach Jessica Karmasek by email at

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