The Innovation Act of the 114th Congress () is a bill that would change the rules and regulations surrounding patent infringement lawsuits in an attempt to reduce enforceability of patents.
This article primarily describes the current version of this bill in the 114th United States Congress, which was sent to the House on June 11, 2015 but has not been voted by the United States House or the United States Senate.
The bill is a reintroduction of the failed bill in the 113th United States Congress by its original sponsor, Rep. Bob Goodlatte (R, VA-6), that had accumulated 16 cosponsors.
Background
Patent litigation has significantly decreased since 2013, when the Innovation Act—the most recent patent bill —was introduced. Patent litigation has since been reported as primarily initiated by manufacturers, reducing support for a new patent law.
Current law allows universities, small tech startup and other patent owners to file complaints that specify what products they think infringe their patents. A letter sent by the Association of American Universities to Rep. Goodlatte asserts that H.R. 9 would:
make it more difficult and expensive for patent holders to defend their rights in good faith.
In addition, the National Venture Capital Association has stated opposition to H.R. 9 as making it:
harder for startups to enforce their patent rights against entrenched competitors or to defend themselves in patent cases brought by those competitors or even by larger Non-Practicing Entities" ... "making it more difficult to invest in patent-reliant startups" "that would pose a threat of the entrepreneurial ecosystem.
Nonetheless, the bill would require "a party alleging infringement in a civil action involving a claim for relief arising under any Act of Congress relating to patents to include in the court pleadings, unless the information is not reasonably accessible, specified details concerning: (1) each claim of each patent allegedly infringed (2) for each claim of indirect infringement, the acts of the alleged indirect infringer that contribute to, or are inducing, a direct infringement (3) the principal business of the party alleging infringement (4) the authority of the party alleging infringement to assert each patent and the grounds for the court's jurisdiction (5) each complaint filed that asserts any of the same patents (6) and whether the patent is essential or has potential to become essential to a standard-setting body, as well as whether the United States or a foreign government has imposed any specific licensing requirements."
The bill would also require plaintiffs that lose their suit to pay the costs incurred by the winning defendant.
Procedural history
The Innovation Act was introduced into the United States House of Representatives on February 5, 2015 by Rep. Goodlatte. It was referred to the United States House Committee on the Judiciary.
Opponents of the bill argued that the law would hurt smaller inventors that are trying to defend their patents from larger companies with more money to spend on legal action. In February 2015 the Association of Public and Land-grant Universities published a press release and an open letter to the senior members of the House and Senate Committees on the Judiciary, documenting their objections: The provisions with the most potential for damaging university technology transfer include fee-shifting and joinder. Most universities, non-profit technology transfer organizations, and their licensees — often small businesses and start-ups— lack extensive resources to enforce their patents. The heightened litigation risks created by the fee-shifting and joinder provisions in the Innovation Act would devalue patents, creating uncertainty that would undermine the incentives of potential licensees and venture capitalists to invest in commercialization of university innovation.
Dissenting views in Congress
6 former supporters of H.R. 9 on the House Judiciary Committee have dropped their support for H.R. 9, four Republican and 2 Democrats. In addition, two other Democrats on the committee who voted for the failed Innovation Act in the 113th Congress who now oppose H.R. 9 sent out a 'dear colleague' letter in early July 2015 urging others to defect. They cited a slew of Supreme Court cases on patents that have changed precedent as well as changes at the U.S. Patent and Trademark Office stating:.
The patent landscape has changed dramatically in the past two years, and the changes (of the America Invents Act of 2011) are working to eliminate the need for the sweeping changes proposed in H.R. 9.