By a vote of 325-91, the U.S. House of Representatives, passed a bill attempting to curb litigation abuses by patent assertion entities (“PAEs”) in federal district court. The Innovation Act (H.R. 3309) would make it harder for PAEs to send vague infringement letters to companies, who frequently choose to settle rather than defend against patent infringement allegations in court. It also would require plaintiffs to identify the products or processes alleged to infringe the asserted patents, among other things. The potentially lengthy and expensive discovery process in a suit would also be postponed until the court has had an opportunity to construe the claims of the patents. Finally, the bill discourages abusive lawsuits by requiring losing PAEs to pay court costs and the prevailing party’s legal fees in some instances. The Senate version of patent litigation reform legislation – the Leahy-Lee bill (S.1720) – is working its way through the Senate Judiciary Committee. The potential effect of the Innovation Act on Section 337 investigations is unclear. Because it is not directly applicable to unfair trade practice actions under Section 337, the Innovation Act, if enacted into law, could steer more patent suits to the ITC. Alternatively, the Innovation Act may encourage Congress to pursue similar patent litigation reform of Section 337 actions at the ITC. Click here for more information about the Innovation Act and other patent reform initiatives in Congress.