Tuesday, February 09, 2016

Timothy Lee's post in The Hill wrong on the facts

In a post on the Hill on 8 Feb., Timothy Lee wrote of those opposing Goodlatte's Innovation Act: And conspicuously, opponents never seem to cite actual legislative text or verifiable data in support of their cursory allegations.

This simply is not true. As one example, opponents of the Innovation Act have repeatedly attacked the fee-shifting provision.

PLI talked about fee-shifting:

The philosophy behind fee-shifting is that a “loser pays” system will cause a plaintiff to think twice before filing a lawsuit and possibly chill any potential litigation that may be unnecessary. Potentially open-ended liability influences behavior, and that is the specific desire of the fee-shifting provisions. In the United States, however, we historically do not want the fear of seeking redress to influence behavior. While a fee-shifting rule may make those with weak cases think twice, it will also make those with very strong cases think twice, which has not been acceptable from a philosophical standpoint in the U.S.

The ‘loser pays” provisions of the Innovation Act set up more than a possibility of fee-shifting. The Innovation Act sets up a presumption that the loser of a patent infringement litigation would have to pay the attorney’s fees of the winner unless the loser’s positions were objectively reasonable. This is a deviation in the burden of paying for litigation that is extraordinarily rare within the U.S. legal system. The most alarming thing about this fee-shifting provision is that there has been little or no discussion about whether it is a good idea. It was decided entering into this rushed process that fee-shifting was a good idea and the only relevant question for discussion was how it was going to be implemented.

link: http://patentlawcenter.pli.edu/2015/03/06/fee-shifting-provisions-front-and-center-in-innovation-act/

As one example of an opponent, the NVCA explicitly identified fee-shifting as problematic:

The National Venture Capital Association (NVCA) today issued the following statement concerning H.R. 9, The Innovation Act of 2015, ahead of a House Judiciary Committee hearing today on the legislation.

“As the old adage goes, the devil is in the detail. The more our membership digs into the details of H.R. 9, the more concerned they become with the unintended consequences that will impact entrepreneurship and dry up innovation,” said Bobby Franklin, President and CEO of NVCA. “In particular, our membership is growing increasingly concerned that the fee shifting provision will have a devastating impact on startup companies trying to enforce their patents against incumbents and on small companies facing legal challenges by their larger, well-financed competitors. This blunt instrument gives a tremendous advantage to large, incumbent companies and will have a far greater impact on the ability of entrepreneurs to defend their intellectual property than it will on curbing patent troll behavior.”

link: http://nvca.org/pressreleases/nvca-reiterates-concerns-with-innovation-act-ahead-of-house-judiciary-committee-hearing/

See also: http://legalnewsline.com/stories/510555015-groups-continue-to-rail-against-innovation-act-which-could-be-considered-by-house-next-week



Link to post by Timothy Lee: http://thehill.com/blogs/congress-blog/technology/268435-opponents-of-patent-litigation-reform-never-offer-specifics


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