This week in Washington, D.C., several efforts were advanced to address excessive patent litigation, an issue which is widely viewed to have negative impacts on the national economy, American jobs and innovation. President Obama issued five executive actions and seven legislative recommendations aimed at limiting the impacts of frivolous lawsuits and ensuring the U.S. patent system promotes the highest-quality patents. The administration, via the Patent and Trademark Office (PTO), is also launching a public education campaign for consumers to inform them of their rights as they are increasingly targeted by patent firms with threats of litigation. Additionally, the National Economic Council and the Council on Economic Advisors this week released a report, Patent Assertion and U.S. Innovation, that outlines the recent rise in Patent Assertion Entities (PAEs) or “patent trolls” contributing to the nearly 250 percent increase in patent lawsuits in the last two years. The report calls for necessary legislative action by Congress.
These actions on the part of the Obama Administration will likely raise the profile of a number of bills on this same topic that have already been introduced in Congress this year: S.866, the Patent Quality Improvement Act of 2013 sponsored by Senator Charles Schumer (D-NY); S. 1013, the Patent Abuse Reduction Act of 2013 sponsored by Senator John Cornyn (R-TX); H.R. 845, the Saving High-Tech Innovators from Egregious Legal Disputes (SHIELD) Act of 2013 sponsored by Representatives Jason Chaffetz (R-UT) and Peter DeFazio (D-OR); and H.R. 2024, the End Anonymous Patents Act sponsored by Representative Ted Deutch (R-FL). Additionally, both Chairmen Patrick Leahy (D-VT) and Bob Goodlatte (R-VA) plan to move the patent issue forward in their respective Judiciary Committees. The House Judiciary Committee held a hearing on the topic in March 2013, and also this week Chairman Goodlatte released discussion legislation. Chairman Leahy has announced his intentions to introduce separate legislation soon.
The executive actions and legislative proposals, to varying degrees, employ similar provisions aimed at curbing abusive and aggressive patent litigation. Included among the provisions proposed are:
- giving patent examiners additional training;
- stipulating that entities who file patent lawsuits, send letters or seek PTO review disclose their real identity or face penalties;
- improving legal protections for “off-the-shelf” users and consumers;
- giving district courts greater discretion to award attorney’s fees in abusive suits;
- implementing a legal standard for court fees; and others.
While there is significant agreement on the need to address aggressive patent litigation via the legislative process and the issue is likely to be one of the few to receive action during the 113th Congress, there are several key lawmakers not yet convinced additional measures need to be enacted on top of existing law, including the America Invents Act of 2011. Additionally, rather than falling under traditional partisan lines, patent legislation tends to be influenced most by the differing opinions advanced by companies in established industries (e.g. manufacturing firms) versus emerging enterprises (e.g. high-tech businesses).