Changes

Return to [[Innovation Policy#Proposed Patent Reform| Proposed Patent Reform]].

The full title of the act is "To amend title 35, United States Code, and the Leahy-Smith America Invents Act to make improvements and technical corrections, and for other purposes." <ref name="GovTrack" />[https://www.govtrack.us/congress/bills/114/hr9#| GovTrack] predicts that the Innovation Act has a 36% chance of being enacted. Representative Bob Goodlatte intends for the bill to cut down on abusive patent litigation and strengthen a patent holder's rights.<ref name="innovationactsummary" /> The Innovation Act also proposes certain reforms to the enacted [[Leahy Smith America Invents Act]].

*Abusive Patent Litigationpatent litigation. *Increasing Transparency transparency and reducing Weak Patent Infringement Claimsweak patent infringement claims.

*Bolstering IP centered small businesses built upon IP.

In efforts to diminish the Patent Troll threat by the bill sponsors, the Innovation Act has heightened heightens pleading requirements for parties filing for patent infringement. Form 18, the form previously used to submit generalized patent infringement claims, has been eliminated by the Judicial Conference in wide-sweeping amendments. This amendment was expected to be implemented December of 2015 and was made in an effort to heighten patent claim requirements by the Judicial Conference. <ref name="patentlyo18" /> The Innovation Act also proposes Form 18's elimination by the Supreme Court to reduce patent litigation, especially litigation involving Patent Trolls or Non-Practicing Entities.<ref name="nationallawreview" /> The Supreme Court would be allowed to codify a new model for filing infringement complaints that would include notifying the accused parties of the claim and its content. <ref name ="govtracksummary" />

Supporters hope that the act would go further in reducing generalized complaints and eliminating loopholes by requiring (with exceptions) the plaintiff to submit infringement charts with the initial complaint.<ref name="patentlyoIA" /> The purpose of the charts would be is to force the plaintiff to explain the specifics of a claim, how a product or the specific use of the patented idea or process (referred to as accused instrumentalities) violates each infringed component of a patent and the scope of each component's infringement. <ref name="patentlyoIA" />

Additionally, a claim of previous commercial use may not result in a court invalidating a patent because it lacks novelty, seems to cover obvious subject matter, or due to prior art. <ref name="govtracksummary" /> Prior Art refers to evidence indicating that the technology or invention in question has already been used, discovered, or is generally known. Typically, simply having previously described or created a similar process or technology at any point in time by any one constitutes prior art in patent law. <ref name="EPO" />

The act requires courts to have losing parties provide for "reasonable fees and other expenses" incurred by the other party throughout in litigation. The award may be waived only if the losing party is found to have just legal and factual cause to be part of the litigation. If the losing party is unable to pay due to extraordinary circumstances, the court may ask a joined or interested party to cover the award. <ref name="innovationacttext" /> Once a plaintiff has claimed a patent in civil actionAdditionally, dismissing the civil action by proposing an agreement plaintiff may have to not sue for infringement, referred to as a covenant, makes the plaintiff liable for payment of pay attorney fees. Payment may not be required if it dismisses the plaintiff had claim before going to trial unless they were given the explicit right to settle with a covenant without a court order or if payment would not serve the "interests of justice." <ref name="govtracksummary" /> The "interests of justice" have been called upon previously in patent proceeding and generally determine whether a motion will best serve the outcome of a trial. <ref name="interestsofjustice" />

As part of the Fees and Other Expenses provisions, an interested party or parties may be required to cover attorney's fees and other expenses in the case that the nonprevailing party cannot. The purpose Sponsors of this provision is the bill hope to prevent Patent Trolls from claiming the inability to pay fees by shuffling accounts between all of their companiesby including this provision. <ref name="innovationactprovisions" /> A joinder of interested Interested parties may be called upon only if the prevailing party proves that the nonprevailing party has simply claimed patent infringement and has no other substantial interest in the issue. Parties include parties that have invented or invested in the disputed patents may be considered to have substantial interest. Parties or that commercially practice or perform R&D in the same field as the patented technology or subject matter may also be considered to have substantial interest by the act. <ref name="govtracksummary" />

The act establishes that a claim construction ruling must occur prior to discovery. <ref name="patentlyoIA" /> Discovery is a process that occurs pre-trial in a civil action, a conflict between two private parties, and is defined by the federal government as any party's right to obtain relevant information for the trial. A claim construction ruling is a critical step in ruling on the validity of a patent and whether infringement has occurred. Claim construction defines exactly what a patent includes and the extent to which a patent holder can protect the subject matter. <ref name="claimconstruction" /> The provisions act also specify specifies that claim construction previously agreed upon in another court must hold when a patent claim is reviewed by the USPTOor in a new trial. <ref name="patentlyoIA" />

Courts do not have to stay, or suspend, discovery pending preliminary motion if both parties consent, the patent holder is awarded a preliminary injunction, or the case is transferred, dismissed, severed, or a party drops out Discovery of the case. <ref name="govtracksummary" /> A preliminary injunction forces a party to stop the actions supposedly infringing the patent prior to the court's finally ruling. Severing a lawsuit means separating the lawsuit into several parts additional or deciding a case on an individual basis if there are multiple defendants. Drugs and biological products may also be subject to exemption.<ref name=non "govtracksummarycore" /> Additional documents may is not be disclosed allowed unless the party requesting them covers the costs of discovery and all parties consent to discovery. <ref name="patentlyoIA" /> By enabling courts to limit discovery, the act intends sponsors hope to reduce litigation costs and targets target patent trolls intending to settle a case quickly and early on by making use of using information revealed in discovery. <ref name="innovationactsummary" />

To protect small businesses and other entities, the act requires that the patent owner explain the reason for the lawsuit and how the infringement has occurred to the accused party or parties. <ref name="innovationactprovisions" /> A demand letter sent prior to the lawsuit cannot be used as evidence of willful infringement unless the demand letter specifies which patent is being infringed, what is infringing the patent, the parent company that owns the patent, and the grounds for lawsuit. The grounds for lawsuit consist of how the one or more claims in the patent are being violated. <ref name="patentlyoIA" /> The purpose of this provision is to ensure that evasive demand letters are no longer considered in the review process. Plaintiffs who disregard the Anyone found violating these requirements would be forced to pay additional damages. <ref name= "sectionsummary" />

The act reverts to Congress' original intention of patent lawsuit venues by allowing requires that patent infringement suits to only be heard in judicial districts with reasonable connection to the conflict. <ref name="sectionsummary" />

A judicial district in which the following have occurred is considered to have reasonable connection ot to the dispute: <ref name="govtracksummary" />

Within the Innovation Act, several reforms are suggested to the Leahy-Smith America Invents Act. One of these reforms concerns codifying double patenting. <ref name="govtracksummary" /> Double patenting is when two patents are awarded for the same invention to one patent holder. The first -to -file (FTF) system was introduced in the American Invents Act and put into effect in March of 2013. In the FTF system, the first inventor to file for a patent receives has priority for ownership of an in protecting the idea. <ref name="entrepreneur" /> ===Rights of The Innovation Act applies the FTF system to double patenting restrictions. If a patent claim is filed on the same day or before a similar second patent, then the first patent will be deemed prior art to the Manufacturer======Small Businesses==second patent. Thus, double patenting would be prevented unless nonobvious subject matter can be proven. <ref name="govtracksummary" />

==Why it Hasn't been passed=Manufacturers===The House Innovation Act and Senate Patent Act are very similar; both acts address abusive litigation through “increased transparency, more limited discovery, heightened pleading standards, and ‘loser pays’ fee shifting”. However, there has been a delay in the passing of the bills because of controversy surrounding the shifting of attorney fees. Fee shifting was originally suggested as a way to incentivize small firms and businesses that were being unfairly accused of patent infringement to bring the case to court, so that they would not have to pay their attorney fees. However, there have been arguments stating that fee shifting would actually increase the settlement rate of small businesses being accused of patent infringement, because they don’t want to take the risk of losing and paying for the winner’s attorneys’ fees, in addition to their own. [http://www.bna.com/debate-patent-reform-n17179934625/ (Bloomberg BNA)]

==Summary== ===Heightened pleading requirements===The Innovation Act requires To protect manufacturing investments and patent owners to show how each limitation of each asserted claim in each asserted patent is found within each alleged infringement. ===Presumption of attorney fees===The , the act encourages judges to make prohibits foreign courts from eliminating a party pay attorney fees if the lawsuit or claim is deemed frivolous. ===Transparency of ownership===The Innovation Act requires plaintiffs to disclose the owner of the patent company's US IP licenses in question so the identity of the real parties behind the litigation is clear. This will ensure that patent trolls cannot hide behind a web of shell companies to avoid accountability for bringing frivolous litigation. ===Discovery limits===The act would limit discovery bankruptcy, in litigation until after a claim construction rulingaccordance with US law. This provision is aimed at reducing the costs of litigation. <ref name==Analysis Notes (not organized yet)== Before: The court may conclude that "sectionsummary" /> On the patent claim is not valid if it is shown that the claimed invention was disclosed in a prior patent or patents, a bookother hand, a magazine, a newspaper, a television show or movie, a webpage or other published work before the date act pushes for plaintiffs to deal with manufacturers instead of the claimed invention. After: Innovation Act removes a provision that prohibits a patent from being deemed invalid based on novelty, prior art, retailers or nonobvious subject matter solely because a defense is raised or established based on prior commercial use. '''Findings from Katznelson Study''' [http://poseidon01.ssrn.com/delivery.php?ID=343101100066123115123030102069064070118044003044069029011021030023117116127093101102018016059122121033039091077119112065111125116011031037081086111123082086020094071083084027120105093116082106100121110075118106014075071122118023002022027125120031067&EXT=pdf]Historically, as a fraction of issued patents, reported litigation rates in the first part of the 19th century exceeded end users that of have purchased the last two decades by about a factor of five. Patent litigation intensities in recent years had not exceeded those experienced during the 20th century. Rather , patent litigation surges are consistent with major shifts in technological developments, which introduce novel terms and uncertainty in patent claims and require infrimgement analysis of novel and less understood products. manufacturer'''NPEs vs PAEs'''[https://www.justice.gov/sites/default/files/atr/legacy/2012/12/10/290073.pdf]We need to make a distinction between NPEs and PAEs (otherwise known as patent trolls). These terms are often used interchangeably but universities and startups are included under the definition of a non-practicing entity. If you define a Practicing Assertion Entity (PAE) as a company that asserts patents on existing s products as a business model, then you separate universities and startups from PAEs, inventor monetizers, and special purpose patent monetizers.    Issues/cricism of the innovation act [http://www.ipwatchdog.com/2015/05/20/study-should-pause-patent-reform/id<ref name=57946"patentlyoIA" /]:*Apparent automatic fee-shifting in lawsuits*Heightened pleading standard*Discovery > Courts may stay*Broad ‘customer stay’ provision could shield retailers/importers from infringement claims*Pierce corporate veil customer suits while litigation with “ownership transparency” Indirect infringement:*Someone who has contributed to manufacturers accused of infringing the infringement of a same patent is liable*Can only arise when the indirect infringer has some knowledge and intent regarding the patent and infringement*ex. someone who actively induces infringement of patent by encouraging, aiding, or causing another person to infringe a patentongoing. Inducer must be aware of patent and intend for their actions to result in third party infringing that patent*Contributory infringement: seller provides part of component that itself does not infringe on a patent, but has a particular use as a part of some other machine that is covered by a patent ===Detailed Summary of the Bill==<ref name="govtracksummary" />