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 threatby the bill sponsors, the Innovation Act has heightened heightens pleading requirements for parties filing for patent infringement. As of December 2015, 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. <ref name="patentlyo18" />, was eliminated in order The Innovation Act also proposes Form 18's elimination by the Supreme Court to reduce number of 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" />

The party alleging patent infringement, referred to as Supporters hope that the act would go further in reducing generalized complaints and eliminating loopholes by requiring (with exceptions) the plaintiff, must include in to submit infringement charts with the initial complaint (unless .<ref name="patentlyoIA" /> The purpose of the information charts is not reasonably accessible to such party):*Identification of each patent allegedly infringed*All claims (heart of force the patent, defines the limits of exactly what the patent does) necessary plaintiff to produce explain the identification specifics of each process, machine, manufacturea claim, how a product or composition the specific use of matter (accused instrumentalities) that infringe the patent*The name, model number, description of patented idea or process violates each AI*How each limitation infringed component of each claim is met by a patent and the AI*For indiret infringement, the acts scope of the infringer that are inducing a direct each component's infringement*Authority of the party to assert each patent. <ref name="patentlyoIA" />

TL;DR If you believe your 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 infringed onused, discovered, you must write in your initial complaint letter VERY SPECIFIC information regarding exactly which parts of your patents have been violated and by what modelor is generally known. <ref name="EPO" /device. >

Subjects Writers of the 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 "English Rule" requires the losing party claiming a patent in a civil action who subsequently unilaterally seeks dismissal of trial compensate the action without consent of the other prevailing party, and who extends to such other party a covenant not to sue for infringement, to a motion for its 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.<ref name="NYU" />

Removes a provision that prohibits a patent from being deemed invalid based on noveltyThe act requires courts to 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 litigation. If the losing party is unable to pay due to extraordinary circumstances, prior art, or nonobvious subject matter solely because the court may ask a defense is raised joined or established based on prior commercial useinterested party to cover the award.<ref name="innovationacttext"[https://www.govtrack.us/congress/bills/114/hr9/summary] TL;DR Encourages courts > Additionally, the plaintiff may have to make pay attorney fees if it dismisses the losers pay for claim before going to trial unless they were given the winner’s explicit right to settle without a court feesorder. <ref name="govtracksummary" /associated fees>

*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" />

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]>

===Willful Infringement======Disclosure of Ownership======Double Patenting======Rights of the Manufacturer======Small BusinessesDemand Letters===

==Why it Hasn't been passed==The House Innovation Act and Senate Patent Act are very similar; both acts address abusive litigation through “increased transparencyTo protect small businesses, more limited discovery, heightened pleading standards, and ‘loser pays’ fee shifting”. However, there has been a delay in the passing of act requires that the patent owner explain the bills because of controversy surrounding reason for the shifting of attorney fees. Fee shifting was originally suggested as a way to incentivize small firms lawsuit and businesses that were being unfairly accused of patent how the infringement has occurred to bring the case accused party or parties. <ref name="innovationactprovisions" /> A demand letter sent prior 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 lawsuit cannot be used as evidence of small businesses willful infringement unless the demand letter specifies which patent is being accused of infringed, what is infringing the patent infringement, because they don’t want to take the risk of losing and paying for parent company that owns the winner’s attorneys’ feespatent, and how one or more claims in addition to their ownthe patent are being violated. [http:<ref name="patentlyoIA" //www> Anyone found violating these requirements would be forced to pay additional damages.bna.com/debate-patent-reform-n17179934625<ref name= "sectionsummary" / (Bloomberg BNA)]>

==Summary=Venue===

===Heightened pleading requirements===The Innovation Act act requires that patent owners infringement suits only be heard in judicial districts with reasonable connection to show how each limitation of each asserted claim in each asserted patent is found within each alleged infringementthe conflict.<ref name="sectionsummary" />

A judicial district in which the following have occurred is considered to have reasonable connection to the dispute: <ref name===Presumption "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 agreed to the suit.* an inventor of attorney fees===the patent led R&D. * either party runs R&D for the patented invention. The act encourages judges to make * either party manufactures a physical product that violates the patent's claims. * either party pay attorney fees if runs a process using the lawsuit or claim is deemed frivolouspatented invention.

===Transparency Disclosure of ownershipOwnership===The Innovation Act requires plaintiffs to disclose the owner of the patent 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.

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===Discovery limits===The act would limit discovery "sectionsummary" /> Any change in litigation until after a claim construction rulingpatent ownership must be provided to the UPSTO. This provision If the information is aimed at reducing not provided or updated when changes occur, then the costs of litigationcourt will make the patentee cover the defendant's attorney fees.<ref name="patentlyoIA" />

==Analysis Notes (not organized yet)=Double Patenting===

Before: The court may conclude that Within the Innovation Act, several reforms are suggested to the patent claim Leahy-Smith America Invents Act. One of these reforms concerns codifying double patenting. <ref name="govtracksummary" /> Double patenting is not valid if it is shown that when two patents are awarded for the claimed same invention to one patent holder. The first-to-file (FTF) system was disclosed 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 prior patent claim is filed on the same day or patents, before a book, a magazine, a newspaper, a television show or moviesimilar second patent, a webpage or other published work before then the date of first patent will be deemed prior art to the claimed inventionsecond patent. Thus, double patenting would be prevented unless nonobvious subject matter can be proven.<ref name="govtracksummary" />

'''Findings To protect manufacturing investments and patent owners, the act prohibits foreign courts from Katznelson Studyeliminating a company''' [http://poseidon01s US IP licenses in bankruptcy, in accordance with US law.ssrn.com<ref name="sectionsummary" /delivery.php?ID=343101100066123115123030102069064070118044003044069029011021030023117116127093101102018016059122121033039091077119112065111125116011031037081086111123082086020094071083084027120105093116082106100121110075118106014075071122118023002022027125120031067&EXT=pdf]Historically> On the other hand, as a fraction of issued patents, reported litigation rates in the first part act pushes for plaintiffs to deal with manufacturers instead of the 19th century exceeded retailers or end users that of the last two decades by about a factor of five. Patent litigation intensities in recent years had not exceeded those experienced during have purchased 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. '''NPEs vs PAEs''manufacturer'[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*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" />

<ref name="patentlyo18" /> [http://patentlyo.com/patent/2016/04/elimination-pleading-infringement.html] L. Morad and A.J. Bramhall, 'An Early Review of the Impact of 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 Gregory Brescia, 'Supreme Court Adopts Amendments to 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 2015', ''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 American 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><ref name="EPO"> [https://www.epo.org/learning-events/materials/inventors-handbook/novelty/prior-art.html] 'What is 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 Innovation 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, 'Claim Construction: A Structured Framework', "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.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 First-to-File Patent System', Entrepreneur Media, Inc. </ref> [[Category: Public]][[Public Classification::Legislation| ]]