The Innovation Act (HR 3309) – a bill we support and recently blogged about — is headed to markup by the House Judiciary Committee on Wednesday, November 20. The bill is designed to curtail patent troll lawsuits by making a number of changes to how patents are litigated. It is the single most comprehensive patent reform bill to reach a markup since the America Invents Act was passed in 2011. We commend Chairman Bob Goodlatte for his leadership and hard work to get this bill where it is. It is a big step forward.
The most important provisions in The Innovation Act would create heightened pleading standards; impose fee shifting (meaning the loser pays); make expensive discovery more manageable (and hopefully less expensive!); and give end users some relief by allowing upstream manufacturers and distributors to intervene in cases patent trolls bring against their end user customers.
The most concerning provision of the Innovation Act – and one we would like to see removed — is an amendment to the America Invents Act that would effectively take away Inter Partes Review and Post Grant Review proceedings which allow a relatively quick and inexpensive review of a patent’s validity. Section 9(c) of the Innovation Act would require the PTO to perform the same claim construction analysis of the patent as used by district courts. This one is very technical and complicated, but suffice it to say that this would devalue IPRs and PGRs, which many companies are taking advantage of today. Rackspace uses IPRs extensively in cases where the patents are obviously invalid. The PTO is opposed to this change in law, and so is Rackspace. We believe Inter Partes and Post Grant reviews are effective methods of challenging a patent before the matter heads to court, and we hope that the Judiciary Committee will agree.
When it was filed a few weeks ago, the original bill also had an expansion of the Covered Business Method Program (CBM), which allows those accused of infringing a patent to have the US Patent and Trademark Office review its validity in an administrative proceeding in the PTO, rather than in federal court. Rackspace supports CBM expansion. Unfortunately, the Innovation Act’s author is proposing to remove CBM expansion from the bill. We would like to see this kept in, as CBM expansion would help businesses battle patent shakedowns for far less money than defending a lawsuit in federal district court.
On the whole, the Innovation Act is strong medicine that should make patent lawsuits far less expensive and not quite as disruptive. It needs to pass, and we encourage all members of the Judiciary Committee to vote in favor. We also hope that members of the committee will vote for an amendment to remove Section 9(c), and that they will not remove the CBM expansion language that was contained in the original bill.
If you would like to join in that encouragement, the App Developers Alliance has an online tool that allows you to locate and send a customized message to your local Representative and two Senators. Members and their staffs check these messages, and they pay attention to what their constituents are saying. Please weigh in, it will only take a minute, and this issue is very much worth it.