Everyone knows that Rackspace hates patent trolls, but we can only fight them one at a time. Solving the patent troll problem for everyone requires changing the system that aids and encourages troll behavior.
Yesterday morning, Congress took a big step forward in trying to shut down these financial parasites. House Judiciary Chairman Rep. Bob Goodlatte (R-VA) re-introduced the Innovation Act, the anti-patent-troll legislation that passed the House in a landslide 325-to-91 bipartisan vote in December 2013.
This year, as last, there is strong support for stopping patent trolls that are gaming the litigation system. At introduction, Representative Goodlatte is joined by 19 original cosponsors from both sides of the political aisle, including Representatives Peter DeFazio (D-Ore.), Darrell Issa (R-Calif.), Jerrold Nadler (D-N.Y.), Lamar Smith (R-Texas), Zoe Logren (D-Calif.), and Anna Eshoo (D-Calif.) in co-sponsoring the bill. We applaud these representatives for their leadership.
Even though there were some setbacks in the Senate last year, we anticipate and hope patent reform has an excellent chance of moving forward in 2015 under the bipartisan leadership of Senators John Cornyn (R-Texas), Charles Grassley (R-Iowa), Pat Leahy (D-Vermont), and Chuck Schumer (D-New York).
Rackspace supports the Innovation Act because it has been carefully tailored to help prevent litigation abuses that we ourselves have seen:
- Pleading Standards:The bill requires patent holders to offer basic information when they file a lawsuit, like which specific products infringe and how they infringe.
- Transparency:The bill requires patent trolls, who often hide under the cover of anonymity, to disclose the parties that benefit financially from the litigation.
- Discovery Sequencing:The bill guides the exchange of documents in a lawsuit so that the “core documents” – the documents necessary to decide the merits of the case – are exchanged first and for free. Other documents are put off until later and costs must be borne by the side asking for the non-relevant information.
- Fee Shifting for Unreasonable Cases: The bill directs judges to make patent trolls pay for the legal bills the companies they target incur if the underlying lawsuit was unreasonable.
- Staying Customer Suits:The bill lets customers escape litigation over off-the-shelf purchases when there is parallel litigation against the manufacturer.
Is the Innovation Act perfect? Absolutely not. There are some provisions that can be clearer, and others that would make it more difficult to get bad patents thrown out via Patent Office procedures. But on the whole, the Innovation Act is a genuine step forward and one that we at Rackspace support.