Changes

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

'''H.R.9: Innovation Act (2015)''' 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 (CongressR-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 introduced on February 5, 2015, by Representative Bob Goodlatte (R-VA). The bill was referred to the House Committee on the Judiciary and Subcommittee on will target the Courts, Intellectual Property, and the Internet, and was placed on the Union Calendar on July 29, 2015. following areas <ref name="innovationactsummary" />: Currently the bill has 27 cosponsors.

The Innovation Act was previously introduced in 2013, but the Senate did not respond with *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 introduction review of a similar billpatent cases. In 2015, the House reintroduced the *Weakening power of [[Innovation Act, and the Senate also introduced the similar PATENT ActPolicy#Patent Trolls| Patent Trolls]]. <section end=summary />==Provisions==The full title provisions of the bill is "To amend title 35, United States Code, and Innovation Act encompass all of the Leahy-Smith America Invents Act to make improvements and technical corrections, and for other purposesareas of reform currently in consideration by Congress."

GovTrack predicts that ===Pleading Requirements===In efforts to diminish the Patent Troll threat by the bill sponsors, the Innovation Act 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. <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 36% chance new model for filing infringement complaints that would include notifying the accused parties of being enactedthe claim and its content.<ref name ="govtracksummary" />

The House Innovation Act Supporters hope that the act would go further in reducing generalized complaints 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 eliminating loopholes by requiring (with exceptions) the passing of plaintiff to submit infringement charts with the bills because initial complaint.<ref name="patentlyoIA" /> The purpose of controversy surrounding the shifting of attorney fees. Fee shifting was originally suggested as a way charts is to incentivize small firms and businesses that were being unfairly accused of patent infringement force the plaintiff to bring explain the case to courtspecifics of a claim, so that they would not have to pay their attorney fees. However, there have been arguments stating that fee shifting would actually increase how a product or the settlement rate specific use of small businesses being accused the patented idea or process violates each infringed component of a patent infringement, because they don’t want to take and the risk scope of losing and paying for the winner’s attorneys’ fees, in addition to their owneach component's infringement. [http:<ref name="patentlyoIA" //www.bna.com/debate-patent-reform-n17179934625/ (Bloomberg BNA)]>

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. <ref name=Summary=="EPO" />

===Heightened pleading requirementsFees and Other Expenses===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 Writers of attorney feesthe 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 act encourages judges to make "English Rule" requires the losing party in a trial compensate the prevailing party pay for its attorney fees if the lawsuit or claim is deemed frivolous.<ref name="NYU" />

===Transparency of ownership===The Innovation Act act requires plaintiffs courts to disclose have losing parties provide for "reasonable fees and other expenses" incurred in litigation. The award may be waived only if the owner losing party is found to have just legal and factual cause to be part of the patent in question so litigation. If the identity of losing party is unable to pay due to extraordinary circumstances, the real parties behind court may ask a joined or interested party to cover the litigation is clearaward. This will ensure that patent trolls cannot hide behind <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 web of shell companies to avoid accountability for bringing frivolous litigationcourt order.<ref name="govtracksummary" />

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

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. 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 disputed patents or that commercially practice or perform R&D in the same field. <ref name=Analysis Notes (not organized yet)=="govtracksummary" />

After: Innovation Act removes The act establishes that a claim construction ruling must occur prior to discovery. <ref name="patentlyoIA" /> Discovery is a provision process that prohibits occurs pre-trial in a patent from being deemed invalid based on noveltycivil action, prior arta conflict between two private parties, or nonobvious and is defined by the federal government as any party's right to obtain relevant information for the trial. Claim construction defines exactly what a patent includes and the extent to which a patent holder can protect the subject matter solely because . <ref name="claimconstruction" /> The act also specifies that claim construction previously agreed upon in another court must hold when a defense patent claim is raised reviewed by the USPTO or established based on prior commercial usein a new trial.<ref name="patentlyoIA" />

Findings from Katznelson Study [http://poseidon01.ssrn.com/delivery.php?ID=343101100066123115123030102069064070118044003044069029011021030023117116127093101102018016059122121033039091077119112065111125116011031037081086111123082086020094071083084027120105093116082106100121110075118106014075071122118023002022027125120031067&EXT=pdf]Historically, as a fraction Discovery of issued patents, reported litigation rates in additional or non "core" documents is not allowed unless the first part of party requesting them covers the 19th century exceeded that costs of the last two decades by about a factor of fivediscovery and all parties consent to discovery. Patent litigation intensities in recent years had not exceeded those experienced during the 20th century. Rather <ref name="patentlyoIA" /> By enabling courts to limit discovery, patent sponsors hope to reduce litigation surges are consistent with major shifts in technological developments, which introduce novel terms costs and uncertainty target patent trolls intending to settle a case quickly using information revealed in patent claims and require infrimgement analysis of novel and less understood productsdiscovery.<ref name="innovationactsummary" />

===Current Patent System [http://knobbe.com/pdf/2010-December-The-US-Patent-Litigation-Process.pdf]Venue=== American Intellectual Property Law Association reported in 2009 that the median cost of a patent infringement suit was 650,000 if less than 1 mil was at risk; 2.5 million if 1 mil to 25 mil at risk; 5.5 million if more than 25 mil at risk.*More than 95% of patent cases resolved before trial

“Typical patent infringement lawsuit begins with complaint filed by patent owner in a US district court. Complaint identified alleged infringers, and the US patent or patents alleged to be infringed.”*Usually includes a brief statement ===Disclosure 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 monthsOwnership===

Some districts (northern district An initial complaint must disclose specifics about the patent including the parent company of CA, Eastern district of TX) have local the patent and any party with a financial interest in the patent. <ref name="sectionsummary" /> Any change in patent rules that require plaintiffs ownership must be provided to identify the specific claims being assertedUPSTO. If the information is not provided or updated when changes occur, and specify where each limitation of each asserted claim is found in each accused productthen the court will make the patentee cover the defendant's attorney fees. <ref name="patentlyoIA" />

Issues/cricism of Within the Innovation Act, several reforms are suggested to the innovation act [http://wwwLeahy-Smith America Invents Act.ipwatchdogOne of these reforms concerns codifying double patenting.com<ref name="govtracksummary" /2015/05/20/study> Double patenting is when two patents are awarded for the same invention to one patent holder. The first-should-pauseto-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-reformhas priority in protecting the idea. <ref name="entrepreneur" /id> 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=57946/]:*Apparent automatic fee-shifting in lawsuits*Heightened pleading standard*Discovery stay*Broad ‘customer stay’ provision could shield retailers"govtracksummary" /importers from infringement claims*Pierce corporate veil with “ownership transparency”>

To protect manufacturing investments and patent owners, the act prohibits foreign courts from eliminating a company's US IP licenses in bankruptcy, in accordance with US law. <ref name="sectionsummary" /> On the other hand, the act pushes for plaintiffs to deal with manufacturers instead of the retailers or end users that have purchased the manufacturer's products. <ref name==Detailed Summary "patentlyoIA" /> Courts may stay customer suits while litigation with manufacturers accused of infringing the Bill==same patent is ongoing. <ref name="govtracksummary" />

====Pleading Requirements====The party alleging In addition to reducing costs and curbing patent infringement must include in troll abuses, the initial complaint (unless act requires the information is not reasonably accessible USPTO to such party):*Identification of each create and distribute educational materials for small businesses involved in aggressive patent allegedly infringed*All claims (heart of the litigation. Working outreach programs would be modified to include information on patent, defines litigation practices that are threatening the limits success of exactly what small businesses. This information would also be disseminated through the patent does) necessary to produce Small Business Administration and the identification of each process, machine, manufacture, or composition of matter (accused instrumentalities) that infringe Minority Business Development Agency. The act directs the USPTO to have public records online about when a patent*The name, model number, description of each AI*How each limitation of each claim is met by brought to court along with other specifics regarding the AI*For indiret infringement, the acts of the infringer that are inducing a direct infringement*Authority of the party patent's ownership to assert each patentincrease transparency. <ref name="govtracksummary" />

<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==Fees "patentlyo18"> [http://patentlyo.com/patent/2016/04/elimination-pleading-infringement.html] L. Morad and Other ExpensesA.J. Bramhall, 'An Early Review of the Impact of Form 18's Elimination on Pleading Direct Infringement',''PatentlyO''.</ref><ref name==== "Requires courts nationallawreview">[http://www.natlawreview.com/article/supreme-court-adopts-amendments-to award prevailing parties reasonable fees -federal-rules-may-deter-patent-infringement] Jura Zibas and other expenses incurred in connection with such actionsGregory Brescia, 'Supreme Court Adopts Amendments to Federal Rules', ''The National Law Review'', (Western Springs, unlessIL). </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'', (1Washington, D.C.) the position . </ref><ref name="NYU"> [http://lsr.nellco.org/cgi/viewcontent.cgi?article=1245&context=nyu_lewp] Theodore Eisenberg and conduct of Geoffrey P. Miller, 'The English vs. the nonprevailing party was reasonably justified in law American Rule on Attorneys Fees', ''New York University Law and fact; orEconomics 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", (2Munich, Germany) special circumstances. </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, such as severe economic hardship to New York). </ref><ref name="claimconstruction"> [http://patentlyo.com/patent/2009/09/claim-construction-a named inventor-structured-framework-1.html] Peter S. Menell, make an award unjustMatthew Powers, and Steven Carlson, 'Claim Construction: A Structured Framework', "PatentlyO".</ref>Directs courts<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, upon a motion of a partyThe "Innovation Act": Section-by-Section Summary", 'Judiciary Committee', (July 2015). </ref><ref name="entrepreneur"> [https://www.entrepreneur.com/article/231884] Kirby Drake, 'How to require another party to certify whether it will be able to pay any award Take Advantage of such fees and expenses. Allows the courtFirst-to-File Patent System', if a nonprevailing party is unable to pay such a feeEntrepreneur Media, to make a joined party liable for the unsatisfied portionInc.</ref>

Subjects a party claiming a patent in a civil action who subsequently unilaterally seeks dismissal of the action without consent of the other party, 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. Removes a provision that prohibits a patent from being deemed invalid based on novelty, prior art, or nonobvious subject matter solely because a defense is raised or established based on prior commercial use."[https[Category://www.govtrack.us/congress/bills/114/hr9/summaryPublic]] TL;DR Encourages courts to make the losers pay for the winner’s court fees/associated fees ====Joinder of Interested Parties==== *If the prevailing party is the side defending against an allegation of infringement, and the nonprevailing party can’t pay the award of fees and expenses, then the prevailing party can signal a motion to have a joinder of interested parties, if they show that the nonprevailing party has no substantial interest in the subject matter**Substantial interest is defined as interest if the party invented the subject matter or commercially practices, made substantial preparations directed particularly to commercially practicing, or is engaged in R&D in the subject matter ====Discovery Stay==== "Establishes procedures to stay discovery pending a preliminary motion, subject to exceptions for[[Public Classification: (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/summaryLegislation| ]]