Innovation Act commentary

Margaret Hosteler on the Innovation Act:

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On February 5, 2015, the House Judiciary Chairman, Rep. Bob Goodlatte (R-VA), flanked by a bipartisan group of his peers, reintroduced his “Innovation Act” (H.R. 9). The bill is the second time in as many years that the Republican-controlled House has introduced legislation aimed at curtailing the excesses of patent protection litigation. In mid-2014, the first incarnation of the “Innovation Act” (H.R. 3309) passed the House but died in the Democratic-controlled Senate. This time, however, the Republican majority extends into the Senate.

In his statement, Rep. Goodlatte pitched the bill as “commonsense reform” aimed at “curb[ing] abusive patent litigation.”[1] The Act’s major provisions include significantly heightened pleading and demand letter requirements, an attorney’s fee shift to the non-prevailing party, discovery limits, plaintiff patent ownership transparency, and stays of litigation against end users. These reforms are aimed ostensibly at protecting emerging and innovative market enterprises. Rep. Darrell Issa (R-CA), another of the bill’s supporters, explained that “increasingly, Americans find innovation obstructed, with attempts to enter the marketplace frequently shut down by well-funded patent trolls who exploit loopholes in the patent system.”[2] But if this is really the Act’s intent, something may have gone awry. The companies lining up in support of the Innovation Act include Apple, Google, and Broadcom – not exactly average garage start-ups. Meanwhile, those who should be cheering legislation aimed at making it easier for start-ups to enter the marketplace are urging caution.

Six higher education associations, including the American Council on Education and the Association of American Universities, criticize the Act for debilitating the U.S. patent system and “discouraging the private sector from turning a university’s research discoveries into the innovations that improve our nation’s economy, health, and quality of life.”[3] Also, in a January 21 letter to the House Judiciary Committee, a host of 250 companies, start-ups, and known innovators — including Qualcomm Inc., Merck & Co., and Monsanto Co. — objected to the bill, claiming congressional action was unnecessary in the wake of legal measures that have reined in the worst patent litigation abuses.[4]

Whether a GOP Senate will spell a different fate for the Innovation Act remains to be seen, but it is worth revisiting the major provisions in the proposed legislation.

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