The Innovation Act

H.R. 9, THE INNOVATION ACT

On February 5, 2015, House Judiciary Committee Chairman Bob Goodlatte was joined by Representative Peter DeFazio (D-Ore.), Subcommittee on Courts, Intellectual Property, and the Internet Chairman Darrell Issa (R-Calif.), Subcommittee on Courts, Intellectual Property, and the Internet Ranking Member Jerrold Nadler (D-N.Y.), Science, Space and Technology Committee Chairman Lamar Smith (R-Texas), Representative Zoe Logren (D-Calif.), and Energy and Commerce Subcommittee on Communications and Technology Ranking Member Anna Eshoo (D-Calif.) in introducing a bill to address the ever increasing problem of abusive patent litigation.  The bipartisan Innovation Act (H.R. 9), which is the same legislation that passed the House in 2013, builds on the reforms that were made in the America Invents Act and addresses certain abusive practices taking place in our courts.

Background on the Innovation Act

• Requires plaintiffs to disclose who the owner of a patent is before litigation, so that it is clear who the real parties behind the litigation are. This will ensure that Patent Trolls cannot hide behind a web of shell companies to avoid accountability for bringing frivolous litigation.

• Requires plaintiffs to actually explain why they are suing a company in their court pleadings.

• Requires courts to make decisions about whether a patent is valid or invalid early in the litigation process so that Patent Trolls cannot drag patent cases on for years based on invalid claims. This prevents invalid patents from being used to extort money from retailers and end users.

• When parties bring lawsuits or claims that have no reasonable basis in law and fact, the Innovation Act requires judges to award attorneys' fees to the victims of the frivolous lawsuit. The bill allows judges to waive the award of attorneys' fees in special circumstances. This provision applies to both plaintiffs and defendants who file frivolous claims.

• Requires the Judicial Conference to make rules to reduce the costs of discovery in patent litigation, so that Patent Trolls cannot use the high costs of discovery to extort money from small businesses and entrepreneurs.

• Creates a voluntary process for small businesses to postpone expensive patent lawsuits while their larger sellers complete similar patent lawsuits against the same plaintiffs, to protect customers who simply bought the product off-the-shelf.

• Requires PTO to provide educational resources for those facing abusive patent litigation claims.

The Innovation Act previously passed the House of Representatives in the 113th Congress by an overwhelming bipartisan vote of 325-91.  That legislation was supported by a wide range of groups that include stakeholders from all areas of our economy representing businesses of all kinds from every corner of our country including independent inventors and innovators. 

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