The U.S. House of Representatives today overwhelmingly (325 to 91) passed the Innovation Act (HR 3309), a major blow to non-practicing entities (NPEs), more commonly known as patent trolls, and their ability to stifle innovation and leverage the legal system to extort money from businesses, developers and individuals.
The bipartisan Innovation Act represents the single most comprehensive patent reform bill since the America Invents Act that passed two years go. It increases transparency within patent litigation processes and offers education and outreach to small businesses and others who are typically the targets of patent trolls’ lawsuits.
The Innovation Act creates heightened pleading standards; imposes fee shifting (meaning the loser pays); makes expensive discovery more manageable and less expensive; and gives end users some relief by allowing upstream manufacturers and distributors to intervene in cases patent trolls bring against their end user customers.
While there is still work to do, the Innovation Act is an important and necessary step to reduce abusive litigation from patent trolls. It also goes a long way in rebuilding trust in the U.S. patent system, which, through litigation, patent trolls have manipulated.
We at Rackspace, along with our customers and partners, deal with the patent troll epidemic on a daily basis. We praise Reps. Bob Goodlatte, Howard Coble, Zoe Lofgren and Peter DeFazio, and the Internet Association, the Coalition for Patent Fairness and the Internet Infrastructure Coalition for working to push this bill forward. We are excited and eager to work with the Senate to hammer patent trolls back into hiding and empower our nation’s innovators to build great things free from fear of litigation.