This year, just as he did last year, Rep. Bob Goodlatte (R-Va), introduced his Innovation Act legislation aimed at stopping abusive patent troll litigation.
‘Second verse, same as the first’
Goodlatte’s 2015 act is identical to the act he sponsored and which was overwhelmingly passed by the House last year before it died in the Senate. In that regard, the latest version of the Innovation Act includes all of the same reform measures from last year, including:
- Requiring patent plaintiffs to identify the patent owner, preventing patent trolls from hiding behind a web of shell corporations to avoid responsibility for frivolous lawsuits (or at least that’s what Rep. Goodlatte says on the matter).
- A heightened pleading standard for patent cases, requiring patent plaintiffs to explain why they are suing a company in the pleadings.
- Requiring courts to determine the validity of the patents in suit early in litigation to prevent patent trolls from running up litigation costs in connection with invalid patents.
- The award of attorneys’ fees to victorious parties (plaintiff or defendant) where frivolous claims were made.
- Requiring the Judicial Conference to make rules lowering the costs of discovery in patent litigation to allow defendants to better defend themselves and avoid extortive litigation.
- A provision allowing small businesses to stay litigation in favor of litigation against upstream suppliers or sellers to protect buyers who simply purchase products off the shelf.
While these goals may be noble, the devil is, as always in the details. For example, the heightened pleading standard may be beneficial — depending on how it differs from the already heightened standard applied to pleadings since the Supreme Court’s Iqbaland Twombly decisions — but if the language used in the legislation is not specific enough, courts will be left with little guidance as to whether that standard is met. The award of attorneys’ fees is certainly a strong deterrent, but again, if the language of the statute does not specify what constitutes frivolous litigation, it may add nothing to the new attorneys’ fees standards that were recently eased by the Supreme Court last summer.
In an increasingly fractured and contentious legislature, patent reform appears to be a uniquely popular cause. This same legislation was easily passed in the House last year. And while Sen. Reid (D-Utah) and other Democrats eventually derailed what was thought to be an easily passed bill in the Senate last year after trial lawyers voiced concern with the bill, with the Democrats losing the majority in the Senate, Reid’s role this time around is likely to be much less influential. And with mounting pressure from business groups representing small and large business alike, this legislation is likely to pass both houses of Congress this time around.
No veto bait
Once again, unlike just about every other issue conceivable, patent reform does not carry with it the partisan politics and rancor common in today’s Congress. Similarly, it appears to defy convention in that it enjoys support both in Congress and with the President. So, unlike many other priority pieces of legislation for the Republican Congress, patent reform is legislation that the President is likely to sign into law.
This optimism, however, for those of you familiar with the process last year, must be tempered by experience. As you’ll recall, the 2014 Goodlatte Innovation Act was thought to enjoy almost uniform support and was rumored to have been set to pass several times before it quickly faltered and was dropped from legislative calendars. But, this Congress is different from the last Congress. And that difference, according to all of the tea leaves, seems to suggest the 2015 Goodlatte Innovation Act is likely to pass into law.