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.

==Why it Hasn't been passed=Pleading Requirements===The House 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 ownits content. [http://www.bna.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" />

Issues/cricism of the innovation The act [http://www.ipwatchdog.com/2015/05/20/study-should-pause-requires that patent-reform/id=57946/]:*Apparent automatic fee-shifting in lawsuits*Heightened pleading standard*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 patent is liable*Can suits 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 patent. Inducer must be aware of patent and intend for their actions to result heard 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=== '''Section 3'''  ====Pleading Requirements====The party alleging patent infringement must include in the initial complaint (unless the information is not reasonably accessible judicial districts with reasonable connection 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 conflict. <ref 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="sectionsummary" />

TL;DR If you believe your patent has been infringed on, you must write A judicial district in your initial complaint letter VERY SPECIFIC information regarding exactly which parts of your patents the following have occurred is considered to have been violated reasonable connection to the dispute: <ref name="govtracksummary" />* the defendant is headquartered or incorporated. * the defendant infringed the patent. * the defendant's facility where the patent continues to be infringed. * the defendant was informed and by what model/deviceagreed to the suit.* an inventor of the patent led R&D. * either party runs R&D for the patented invention. * either party manufactures a physical product that violates the patent's claims. * either party runs a process using the patented invention.

====Fees and Other Expenses=Disclosure of Ownership=== "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 An initial complaint must disclose specifics about the patent in a civil action who subsequently unilaterally seeks dismissal of including the action without consent parent company of the other party, patent and who extends to such other any party with a covenant not financial interest in the patent. <ref name="sectionsummary" /> Any change in patent ownership must be provided 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 UPSTO. If the time that such covenant was extendedinformation is not provided or updated when changes occur, to dismiss voluntarily then the action without a court order; or(2) will make the patentee cover the interests of justice require otherwisedefendant's attorney fees.<ref name="patentlyoIA" />

TL;DR Encourages courts Within the Innovation Act, several reforms are suggested to make the losers pay 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 winner’s court feessame 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 has priority in protecting the idea. <ref name="entrepreneur" /> 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" /associated fees>

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

*If To protect manufacturing investments and patent owners, the prevailing party is the side defending against an allegation of infringementact prohibits foreign courts from eliminating a company's US IP licenses in bankruptcy, and the nonprevailing party can’t pay in accordance with US law. <ref name="sectionsummary" /> On the award of fees and expensesother hand, then the prevailing party can signal a motion act pushes for plaintiffs to have a joinder deal with manufacturers instead of interested parties, if they show the retailers or end users that have purchased the nonprevailing party has no substantial interest in the subject matter**Substantial interest is defined as interest if the party invented manufacturer's products. <ref name="patentlyoIA" /> Courts may stay customer suits while litigation with manufacturers accused of infringing the subject matter or commercially practices, made substantial preparations directed particularly to commercially practicing, or same patent is engaged in R&D in the subject matterongoing. <ref name="govtracksummary" />

===Small Businesses=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]

===Demand Letters===“The bill precludes a plaintiff from relying on pre-suit demand letters In addition to establish willful infringement if the letters do not specify the asserted reducing costs and curbing patenttroll abuses, the accused product, act requires the plaintiff’s ultimate parent entity, USPTO to create and the grounds distribute educational materials for the alleged infringement” [http://wwwsmall businesses involved in aggressive patent litigation.mofo.com/~/media/Files/ClientAlert/2015/05/150507ProposedPatentReformLegislation.pdf]  ===Venue===Amends the federal judicial code Working outreach programs would be modified to restrict the venues where include information on 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 litigation practices that gives rise to are threatening the act success of infringement, or has agreed or consented to small businesses. This information would also be sued in disseminated through the instant action; an inventor named on the patent conducted research or development; or a party has a regular Small Business Administration and established physical facility and has managed significant research and development for the invention claimed in Minority Business Development Agency. The act directs the patent, has manufactured a tangible product alleged USPTO to embody that invention, or has implemented have public records online about when a manufacturing process for a tangible good in which the process patent claim is alleged brought to embody court along with other specifics regarding the inventionpatent's ownership to increase transparency.[https://www.govtrack.us/congress/bills/114/hr9<ref name="govtracksummary" /summary]>