Changes

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

The [https://www.congress.gov/bill/114th-congress/house-bill/9| H.R.9 :Innovation Act] was introduced reintroduced on February 5, 2015, by Representative Bob Goodlatte (R-VA). The bill was referred to the House Committee on the Judiciary and Subcommittee on the Courts, Intellectual Property, and the Internet, and was placed on the Union Calendar on July 29, 2015. Currently the bill has 27 cosponsors, 15 Republicans and 12 Democrats. <section begin=summary />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]].

The Innovation Act was previously introduced in 2013, but the Senate did not respond with the introduction of a similar bill. In 2015, the House reintroduced the Innovation Act, and the Senate also introduced will target the similar PATENT Act. The full title of the bill is following areas <ref name="To amend title 35, United States Code, and the Leahy-Smith America Invents Act to make improvements and technical corrections, and for other purposes.innovationactsummary"/>:

GovTrack predicts that *Abusive patent litigation. *Increasing transparency and reducing weak patent infringement claims. *Clarifying patent litigation procedures and practices. *Bolstering IP centered small businesses. *Reducing referrals to random courts for the review of patent cases. *Weakening power of [[Innovation Policy#Patent Trolls| Patent Trolls]]. <section end=summary />==Provisions==The provisions of the Innovation Act has a 36% chance encompass all of the areas of being enactedreform currently in consideration by Congress.

The House ===Pleading Requirements===In efforts to diminish the Patent Troll threat by the bill sponsors, the Innovation Act and Senate Patent Act are very similar; both acts address abusive litigation through “increased transparency, more limited discovery, heightened heightens pleading standardsrequirements for parties filing for patent infringement. Form 18, and ‘loser pays’ fee shifting”. Howeverthe form previously used to submit generalized patent infringement claims, there has been a delay eliminated by the Judicial Conference in the passing of the bills because of controversy surrounding the shifting of attorney feeswide-sweeping amendments. Fee shifting This amendment was originally suggested as a way expected to incentivize small firms and businesses that were being unfairly accused be implemented December of patent infringement to bring 2015. <ref name="patentlyo18" /> The Innovation Act also proposes Form 18's elimination by the case Supreme Court to courtreduce patent litigation, so that they especially litigation involving Patent Trolls or Non-Practicing Entities.<ref name="nationallawreview" /> The Supreme Court would not have be allowed to pay their attorney fees. However, there have been arguments stating codify a new model for filing infringement complaints that fee shifting would actually increase include notifying the settlement rate of small businesses being accused parties of patent infringement, because they don’t want to take the risk of losing claim and paying for the winner’s attorneys’ fees, in addition to their own. [http://www.bnaits content.com/debate-patent-reform-n17179934625<ref name ="govtracksummary" / (Bloomberg BNA)]>

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 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 violates each infringed component of a patent and the scope of each component's infringement. <ref name=Summary=="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===Heightened pleading requirements===The Innovation Act requires patent owners "govtracksummary" /> Prior Art refers to show how each limitation of each asserted claim evidence indicating that the technology or invention in each asserted patent question has already been used, discovered, or is found within each alleged infringementgenerally known.<ref name="EPO" />

===Presumption of attorney feesFees and Other Expenses===The act encourages judges to make a party pay attorney fees if the lawsuit or claim is deemed frivolous.

===Transparency Writers of ownershipthe bill propose that a modified "English Rule" become the new standard in patent litigation in America to avoid frivolous lawsuits and adequately sanction patent trolls for pointless or unfounded claims. <ref name="innovationactprovisions" /> <ref name=="patentlyoIA" /> The Innovation Act "English Rule" requires plaintiffs to disclose the owner of the patent losing party in question so the identity of a trial compensate 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 prevailing party for bringing frivolous litigationits attorney fees.<ref name="NYU" />

===Discovery limits===The act would limit discovery requires courts to have losing parties provide for "reasonable fees and other expenses" incurred in litigation until after a claim construction ruling. The award may be waived This provision only if the losing party is aimed at reducing found to have just legal and factual cause to be part of the costs of 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" /> Additionally, the plaintiff may have to pay attorney fees if it dismisses the claim before going to trial unless they were given the explicit right to settle without a court order. <ref name="govtracksummary" />

==Analysis Notes (not organized yet)=Joinder of Interested Parties===

Before: The court As part of the Fees and Other Expenses provisions, an interested party or parties may conclude be required to cover attorney's fees and other expenses in the case that the patent claim is not valid if it is shown nonprevailing party cannot. Sponsors of the bill hope to prevent Patent Trolls from claiming the inability to pay fees by shuffling accounts between all of their companies by including this provision. <ref name="innovationactprovisions" /> Interested parties may include parties that have invented or invested in the claimed invention was disclosed in a prior patent or disputed patents, a book, a magazine, a newspaper, a television show or movie, a webpage that commercially practice or other published work before the date of perform R&D in the claimed inventionsame field.<ref name="govtracksummary" />

'''Findings from Katznelson Study''' [http://poseidon01The act establishes that a claim construction ruling must occur prior to discovery.ssrn.com<ref name="patentlyoIA" /delivery.php?ID=343101100066123115123030102069064070118044003044069029011021030023117116127093101102018016059122121033039091077119112065111125116011031037081086111123082086020094071083084027120105093116082106100121110075118106014075071122118023002022027125120031067&EXT=pdf]Historically> Discovery is a process that occurs pre-trial in a civil action, as a fraction of issued patentsconflict between two private parties, reported litigation rates in and is defined by the first part of federal government as any party's right to obtain relevant information for the 19th century exceeded that of trial. Claim construction defines exactly what a patent includes and the last two decades by about extent to which a factor of fivepatent holder can protect the subject matter. Patent litigation intensities <ref name="claimconstruction" /> The act also specifies that claim construction previously agreed upon in recent years had not exceeded those experienced during another court must hold when a patent claim is reviewed by the 20th century. Rather , patent litigation surges are consistent with major shifts USPTO or in technological developments, which introduce novel terms and uncertainty in patent claims and require infrimgement analysis of novel and less understood productsa new trial.<ref name="patentlyoIA" />

'''NPEs vs PAEs'''[https://www.justiceDiscovery of additional or non "core" documents is not allowed unless the party requesting them covers the costs of discovery and all parties consent to discovery.gov<ref name="patentlyoIA" /sites/default/files/atr/legacy/2012/12/10/290073.pdf]We need > By enabling courts to limit discovery, sponsors hope to make a distinction between NPEs reduce litigation costs and PAEs (otherwise known as target patent trolls). These terms are often used interchangeably but universities and startups are included under the definition of intending to settle a non-practicing entity. If you define a Practicing Assertion Entity (PAE) as a company that asserts patents on existing products as a business model, then you separate universities and startups from PAEs, inventor monetizers, and special purpose patent monetizerscase quickly using information revealed in discovery.<ref name="innovationactsummary" />

To protect small businesses, 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===Current Patent System [http:"innovationactprovisions" //knobbe.com/pdf/2010-December-The-US-Patent-Litigation-Process.pdf]=== American Intellectual Property Law Association reported in 2009 > 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 median cost of a patent infringement suit was 650,000 if less than 1 mil was at risk; 2and how one or more claims in the patent are being violated.5 million if 1 mil <ref name="patentlyoIA" /> Anyone found violating these requirements would be forced to 25 mil at risk; 5pay additional damages.5 million if more than 25 mil at risk.*More than 95% of patent cases resolved before trial<ref name= "sectionsummary" />

“Typical patent infringement lawsuit begins with complaint filed by patent owner A judicial district in a US district court. Complaint identified alleged infringers, and which the US patent or patents alleged to be infringed.”*Usually includes a brief statement of the alleged infringing act*Doesn’t identify specific products or processes that are accused of infringement*Average time from filing a case to judgement is 33 months, or 2 years 9 months Some districts (northern district of CA, Eastern district of TX) following have local patent rules that require plaintiffs to identify the specific claims being asserted, and specify where each limitation of each asserted claim occurred is found in each accused product.  A sizable majority of patent troll lawsuits (some say as high as 90%) involve patents on softwarethe problem considered to patents of low quality having “unclear property rights, overly broad claims, or both.” The problem is inherent in software because, unlike a mechanical device, it is intangible and difficult have reasonable connection to clearly define.[https://www.bestlawyers.com/Article/patent-trolls-separating-myth-reality/539/] Issues/cricism of the innovation act [httpdispute://www.ipwatchdog.com/2015/05/20/study-should-pause-patent-reform/id<ref name=57946"govtracksummary" /]:>*Apparent automatic fee-shifting in lawsuitsthe defendant is headquartered or incorporated. *Heightened pleading standardthe defendant infringed the patent. *Discovery stay*Broad ‘customer stay’ provision could shield retailers/importers from infringement claims*Pierce corporate veil with “ownership transparency” Indirect infringement:*Someone who has contributed to the infringement of a defendant's facility where the patent is liablecontinues to be infringed. *Can only arise when the indirect infringer has some knowledge defendant was informed and intent regarding agreed to the patent and infringementsuit.*ex. someone who actively induces infringement an inventor of the patent by encouraging, aiding, or causing another person to infringe a patentled R&D. Inducer must be aware of patent and intend * either party runs R&D for their actions to result in third the patented invention. * either party infringing manufactures a physical product that violates the patent's claims. *Contributory infringement: seller provides part of component that itself does not infringe on either party runs a patent, but has a particular use as a part of some other machine that is covered by a patentprocess using the patented invention.

===Detailed Summary Disclosure of the BillOwnership===

An initial complaint must disclose specifics about the patent including the parent company of the patent and any party with a financial interest in the patent. <ref name="sectionsummary" /> Any change in patent ownership must be provided to the UPSTO. If the information is not provided or updated when changes occur, then the court will make the patentee cover the defendant'''Section 3''' s attorney fees. <ref name="patentlyoIA" />

===Double Patenting=Pleading Requirements====The party alleging patent infringement must include in the initial complaint (unless the information is not reasonably accessible to such party):*Identification of each patent allegedly infringed*All claims (heart of the patent, defines the limits of exactly what the patent does) necessary to produce the identification of each process, machine, manufacture, or composition of matter (accused instrumentalities) that infringe the patent*The name, model number, description of each AI*How each limitation of each claim is met by the AI*For indiret infringement, the acts of the infringer that are inducing a direct infringement*Authority of the party to assert each patent

TL;DR If you believe your patent has been infringed onWithin the Innovation Act, you must write in your initial complaint letter VERY SPECIFIC information regarding exactly which parts several reforms are suggested to the Leahy-Smith America Invents Act. One of your these reforms concerns codifying double patenting. <ref name="govtracksummary" /> Double patenting is when two patents have been violated are awarded for the same invention to one patent holder. The first-to-file (FTF) system was introduced in the American Invents Act and by what modelput into effect in March of 2013. In the FTF system, the first inventor to file for a patent has priority in protecting the idea. <ref name="entrepreneur" /device> 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 second patent. Thus, double patenting would be prevented unless nonobvious subject matter can be proven. <ref name="govtracksummary" />

===Manufacturers=Fees and Other Expenses==== "Requires courts to award prevailing parties reasonable fees and other expenses incurred in connection with such actions, unless:(1) the position and conduct of the nonprevailing party was reasonably justified in law and fact; or(2) special circumstances, such as severe economic hardship to a named inventor, make an award unjust.Directs courts, upon a motion of a party, to require another party to certify whether it will be able to pay any award of such fees and expenses. Allows the court, if a nonprevailing party is unable to pay such a fee, to make a joined party liable for the unsatisfied portion.

Subjects a party claiming a To protect manufacturing investments and patent in a civil action who subsequently unilaterally seeks dismissal of owners, the action without consent of the other party, and who extends to such other party a covenant not to sue for infringement, to act prohibits foreign courts from eliminating a motion for attorneycompany's fees as if it were a nonprevailing partyUS IP licenses in bankruptcy, unless:(1) in accordance with US law. <ref name="sectionsummary" /> On the party asserting such claim would have been entitledother hand, at the time that such covenant was extended, act pushes for plaintiffs to dismiss voluntarily deal with manufacturers instead of the action without a court order; retailers or(2) end users that have purchased the interests manufacturer's products. <ref name="patentlyoIA" /> Courts may stay customer suits while litigation with manufacturers accused of justice require otherwiseinfringing the same patent is ongoing.<ref name="govtracksummary" />

TL;DR Encourages courts In addition to make reducing costs and curbing patent troll abuses, the losers pay act requires the USPTO to create and distribute educational materials for small businesses involved in aggressive patent litigation. Working outreach programs would be modified to include information on patent litigation practices that are threatening the success of small businesses. This information would also be disseminated through the Small Business Administration and the Minority Business Development Agency. The act directs the winner’s USPTO to have public records online about when a patent claim is brought to court feesalong with other specifics regarding the patent's ownership to increase transparency. <ref name="govtracksummary" /associated fees>

====Joinder of Interested Parties==References==

*If the prevailing party is the side defending against an allegation of <ref name="GovTrack"> [https://www.govtrack.us/congress/bills/114/hr9#] 'H.R.9:Innovation Act', ''govtrack.us''. </ref><ref name="innovationactsummary"> [https://judiciary.house.gov/wp-content/uploads/2016/02/782015_InnovationAct3.pdf] 'The Innovation Act', ''Judiciary Committee: Chairman Bob Goodlatte'', (Washington, D.C.). </ref><ref name="patentlyo18"> [http://patentlyo.com/patent/2016/04/elimination-pleading-infringement.html] L. Morad and A.J. Bramhall, and the nonprevailing party can’t pay 'An Early Review of the award Impact of fees Form 18's Elimination on Pleading Direct Infringement',''PatentlyO''.</ref><ref name="nationallawreview">[http://www.natlawreview.com/article/supreme-court-adopts-amendments-to-federal-rules-may-deter-patent-infringement] Jura Zibas and expensesGregory Brescia, then the prevailing party can signal a motion 'Supreme Court Adopts Amendments to have a joinder Federal Rules', ''The National Law Review'', (Western Springs, IL). </ref><ref name="patentlyoIA"> [http://patentlyo.com/patent/2015/02/patent-reform-innovation.html] Dennis Crouch, 'Patent Reform: Innovation Act of interested parties2015', if they show that ''PatentlyO''. </ref><ref name="innovationactprovisions"> [https://judiciary.house.gov/wp-content/uploads/2016/02/for-packet-plain-english.pdf] 'The Innovation Act: Key Provisions', ''Judiciary Committee: Chairman Bob Goodlatte'', (Washington, D.C.). </ref><ref name="NYU"> [http://lsr.nellco.org/cgi/viewcontent.cgi?article=1245&context=nyu_lewp] Theodore Eisenberg and Geoffrey P. Miller, 'The English vs. the nonprevailing party has no substantial interest in the subject matterAmerican Rule on Attorneys Fees', ''New York University Law and Economics Working Papers''. </ref><ref name="innovationacttext"> [https://www.congress.gov/bill/114th-congress/house-bill/9] 'Summary: H.R.9-114th Congress', congress.gov. </ref>**Substantial interest <ref name="EPO"> [https://www.epo.org/learning-events/materials/inventors-handbook/novelty/prior-art.html] 'What is defined as interest if prior art?', "European Patent Office: Inventors' Handbook", (Munich, Germany). </ref><ref name="govtracksummary"> [https://www.govtrack.us/congress/bills/114/hr9/summary] 'Summaries for the party invented the subject matter or commercially practicesInnovation Act', "govtrack.us". </ref><ref name="interestsofjustice"> [https://www.wilmerhale.com/uploadedFiles/WilmerHale_Shared_Content/Files/PDFs/how-PTAB-applies-interests-of-justice-discovery-standard.pdf] 'How PTAB Applies 'Interests of Justice' Discovery Standard', "Law360", Portfolio Media, Inc. (New York, New York). </ref><ref name="claimconstruction"> [http://patentlyo.com/patent/2009/09/claim-construction-a-structured-framework-1.html] Peter S. Menell, Matthew Powers, and Steven Carlson, made substantial preparations directed particularly to commercially practicing'Claim Construction: A Structured Framework', or is engaged in "PatentlyO". </ref><ref name="sectionsummary" > [https://judiciary.house.gov/wp-content/uploads/2016/02/072015-Section-by-Section-of-HR-9-Innovation-Act.pdf] 'H.R&D in .9, The "Innovation Act": Section-by-Section Summary", 'Judiciary Committee', (July 2015). </ref><ref name="entrepreneur"> [https://www.entrepreneur.com/article/231884] Kirby Drake,'How to Take Advantage of the subject matterFirst-to-File Patent System', Entrepreneur Media, Inc. </ref>

====Discovery Stay==== "Establishes procedures to stay discovery pending a preliminary motion, subject to exceptions for: (1) motions to sever, drop a party, dismiss, or transfer; (2) actions in which a patentee is granted a preliminary injunction to prevent competitive harm; (3) consent of the parties; or (4) certain drug and biological product applications."[https[Category://www.govtrack.us/congress/bills/114/hr9/summaryPublic]] ===Demand Letters===“The bill precludes a plaintiff from relying on pre-suit demand letters to establish willful infringement if the letters do not specify the asserted patent, the accused product, the plaintiff’s ultimate parent entity, and the grounds for the alleged infringement” [http[Public Classification://www.mofo.com/~/media/Files/ClientAlert/2015/05/150507ProposedPatentReformLegislation.pdf:Legislation| ]  ===Venue===Amends the federal judicial code to restrict the venues where patent actions may be brought to judicial districts where:the defendant has its principal place of business or is incorporated, has committed an act of infringement and has a regular and established physical facility that gives rise to the act of infringement, or has agreed or consented to be sued in the instant action; an inventor named on the patent conducted research or development; or a party has a regular and established physical facility and has managed significant research and development for the invention claimed in the patent, has manufactured a tangible product alleged to embody that invention, or has implemented a manufacturing process for a tangible good in which the process is alleged to embody the invention.[https://www.govtrack.us/congress/bills/114/hr9/summary]