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 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" /> The [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 was referred to the House Committee cut down on the Judiciary abusive patent litigation and Subcommittee on the Courts, Intellectual Property, and the Internet, and was placed on the Union Calendar on July 29, 2015strengthen a patent holder's rights. Currently <ref name="innovationactsummary" /> The Innovation Act also proposes certain reforms to the bill has 27 cosponsors, 15 Republicans and 12 Democratsenacted [[Leahy Smith America Invents Act]].

[httpsThe bill will target the following areas <ref name="innovationactsummary" />://www.govtrack.us/congress/bills/114/hr9#| GovTrack] predicts that the Innovation Act has a 36% chance of being enacted.

The party alleging In efforts to diminish the Patent Troll threat by the bill sponsors, the Innovation Act heightens pleading requirements for parties filing for patent infringement must include in the initial complaint (unless . Form 18, the information is not reasonably accessible form previously used to such party):*Identification of each submit generalized patent allegedly infringed*All infringement claims (heart of the patent, defines has been eliminated by the limits Judicial Conference in wide-sweeping amendments. This amendment was expected to be implemented December of exactly what 2015. <ref name="patentlyo18" /> The Innovation Act also proposes Form 18's elimination by the Supreme Court to reduce patent does) necessary to produce the identification of each process, machine, manufacturelitigation, especially litigation involving Patent Trolls or composition of matter (accused instrumentalities) that infringe the patent*Non-Practicing Entities.<ref name="nationallawreview" /> The name, Supreme Court would be allowed to codify a new model number, description of each AI*How each limitation of each claim is met by the AI*For indiret for filing infringement, complaints that would include notifying the acts accused parties of the infringer that are inducing a direct infringement*Authority of the party to assert each patentclaim and its content. <ref name ="govtracksummary" />

TL;DR If you believe your patent has been infringed on, you must write Supporters hope that the act would go further in your reducing generalized complaints and eliminating loopholes by requiring (with exceptions) the plaintiff to submit infringement charts with the initial complaint letter VERY SPECIFIC information regarding exactly which parts .<ref name="patentlyoIA" /> The purpose of the charts is to force the plaintiff to explain the specifics of your patents have been violated a claim, how a product or the specific use of the patented idea or process violates each infringed component of a patent and by what modelthe scope of each component's infringement. <ref name="patentlyoIA" /device. >

====Fees and Other Expenses==== "Requires courts to award prevailing parties reasonable fees and other expenses incurred in connection with such actionsAdditionally, unless:(1) the position and conduct a claim of the nonprevailing party was reasonably justified previous commercial use may not result in law and fact; or(2) special circumstances, such as severe economic hardship to a named inventor, make an award unjust.Directs courts, upon court invalidating a motion of a partypatent because it lacks novelty, seems to require another party cover obvious subject matter, or due to certify whether it will be able prior art. <ref name="govtracksummary" /> Prior Art refers to pay any award of such fees and expenses. Allows evidence indicating that the courttechnology or invention in question has already been used, discovered, if a nonprevailing party or is unable to pay such a fee, to make a joined party liable for the unsatisfied portiongenerally known.<ref name="EPO" />

Subjects a party claiming a patent in a civil action who subsequently unilaterally seeks dismissal of the action without consent of the other party, ===Fees and who extends to such other party a covenant not to sue for infringement, to a motion for attorney's fees as if it were a nonprevailing party, unless:(1) the party asserting such claim would have been entitled, at the time that such covenant was extended, to dismiss voluntarily the action without a court order; or(2) the interests of justice require otherwise.Other Expenses===

Removes a provision Writers of the bill propose that prohibits a modified "English Rule" become the new standard in patent from being deemed invalid based on novelty, prior art, or nonobvious subject matter solely because a defense is raised litigation in America to avoid frivolous lawsuits and adequately sanction patent trolls for pointless or established based on prior commercial useunfounded claims.<ref name="innovationactprovisions"[https:/> <ref name="patentlyoIA" /www> The "English Rule" requires the losing party in a trial compensate the prevailing party for its attorney fees.govtrack.us/congress/bills/114/hr9<ref name="NYU" /summary]>

TL;DR Encourages The act requires courts to make have losing parties provide for "reasonable fees and other expenses" incurred 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 losers litigation. If the losing party is unable to pay for due to extraordinary circumstances, the winner’s court may ask a joined or interested party to cover the award. <ref name="innovationacttext" /> Additionally, the plaintiff may have to pay attorney feesif it dismisses the claim before going to trial unless they were given the explicit right to settle without a court order. <ref name="govtracksummary" /associated fees>

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

*If As part of the prevailing party is the side defending against Fees and Other Expenses provisions, an allegation of infringement, and the nonprevailing interested party can’t pay the award of or parties may be required to cover attorney's fees and other expenses, then in the prevailing party can signal a motion to have a joinder of interested parties, if they show case that the nonprevailing party has no substantial interest in cannot. Sponsors of the subject matter**Substantial interest is defined as interest if bill hope to prevent Patent Trolls from claiming the party 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 subject matter disputed patents or that commercially practices, made substantial preparations directed particularly to commercially practicing, practice or is engaged in perform R&D in the subject mattersame field. <ref name="govtracksummary" />

====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://www.govtrack.us/congress/bills/114/hr9/summary]

The act establishes that a claim construction ruling must occur prior to discovery. <ref name===Demand Letters===“The bill precludes "patentlyoIA" /> Discovery is a plaintiff from relying on process that occurs pre-suit demand letters to establish willful infringement if the letters do not specify the asserted patenttrial in a civil action, the accused product, the plaintiff’s ultimate parent entitya conflict between two private parties, and is defined by the grounds federal government as any party's right to obtain relevant information for the alleged infringement” [http://wwwtrial.mofoClaim construction defines exactly what a patent includes and the extent to which a patent holder can protect the subject matter.com<ref name="claimconstruction" /~/media/Files> The act also specifies that claim construction previously agreed upon in another court must hold when a patent claim is reviewed by the USPTO or in a new trial. <ref name="patentlyoIA" /ClientAlert/2015/05/150507ProposedPatentReformLegislation.pdf] >

===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 Discovery of business additional or non "core" documents is incorporated, has committed an act not allowed unless the party requesting them covers the costs of infringement discovery and has a regular and established physical facility that gives rise all parties consent to discovery. <ref name="patentlyoIA" /> By enabling courts to the act of infringementlimit discovery, or has agreed or consented sponsors hope 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 reduce litigation costs and has managed significant research and development for the invention claimed in the target patent, has manufactured a tangible product alleged trolls intending to embody that invention, or has implemented settle a manufacturing process for a tangible good case quickly using information revealed in which the process is alleged to embody the inventiondiscovery.[https://www.govtrack.us/congress/bills/114/hr9<ref name="innovationactsummary" /summary]>

==Why it Hasn't been passed=Demand Letters===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)]

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="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 how one or more claims in the patent are being violated. <ref name=Summary="patentlyoIA" /> Anyone found violating these requirements would be forced to pay additional damages. <ref name="sectionsummary" />

===Heightened pleading requirementsVenue===The Innovation Act requires 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 act encourages judges requires that patent infringement suits only be heard in judicial districts with reasonable connection to make a party pay attorney fees if the lawsuit or claim is deemed frivolousconflict.<ref name="sectionsummary" />

A judicial district in which the following have occurred is considered to have reasonable connection to the dispute: <ref name===Transparency of ownership==="govtracksummary" />* the defendant is headquartered or incorporated. * the defendant infringed the patent. The Innovation Act requires plaintiffs to disclose * the owner of defendant's facility where the patent in question so continues to be infringed. * the defendant was informed and agreed to the identity suit.* an inventor of the real parties behind patent led R&D. * either party runs R&D for the litigation is clearpatented invention. This will ensure * either party manufactures a physical product that violates the patent trolls cannot hide behind 's claims. * either party runs a web of shell companies to avoid accountability for bringing frivolous litigationprocess using the patented invention.

===Discovery limitsDisclosure of Ownership===The act would limit discovery in litigation until after a claim construction ruling. This provision is aimed at reducing the costs of litigation.

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==Analysis Notes ("sectionsummary" /> Any change in patent ownership must be provided to the UPSTO. If the information is not organized yet)=provided or updated when changes occur, then the court will make the patentee cover the defendant's attorney fees. <ref name="patentlyoIA" />

After: Within the Innovation Act removes , 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 provision that prohibits patent has priority in protecting the idea. <ref name="entrepreneur" /> The Innovation Act applies the FTF system to double patenting restrictions. If a patent from being deemed invalid based claim is filed on noveltythe same day or before a similar second patent, then the first patent will be deemed prior artto the second patent. Thus, or double patenting would be prevented unless nonobvious subject matter solely because a defense is raised or established based on prior commercial usecan be proven.<ref name="govtracksummary" />

'''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 that of 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.=Manufacturers===

'''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 To protect manufacturing investments and PAEs (otherwise known as patent trolls). These terms are often used interchangeably but universities and startups are included under owners, the definition of a non-practicing entity. If you define a Practicing Assertion Entity (PAE) as act prohibits foreign courts from eliminating a company that asserts patents on existing products as a business model's US IP licenses in bankruptcy, then you separate universities and startups from PAEs, inventor monetizers, and special purpose patent monetizersin accordance with US law.    Issues<ref name="sectionsummary" /cricism > On the other hand, the act pushes for plaintiffs to deal with manufacturers instead of the innovation act [http://www.ipwatchdogretailers or end users that have purchased the manufacturer's products.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*exongoing. someone who actively induces infringement of patent by encouraging, aiding, or causing another person to infringe a patent. 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" />