Friday, February 13, 2015

Forbes piece by Richard Epstein trashes Goodlatte's Innovation Act concerning patent reform


Patent Law Gone Awry: How Bob Goodlatte's Bill Combines Useless Rigidity With Dangerous Discretion


Richard Epstein observes

The bipartisan support for the legislation regrettably offers no evidence of the bill’s soundness.  It only offers evidence that strong populist pressures from small businesses, some of whom may well have been subject to abusive litigation, continue to exert powerful influence over the political process. So strong, in fact, that a strongly worded letter of January 20, 2015 from the various heads of the Big Ten universities expressing their immediate concerns with the impact of this legislation on the technology transfer process continues to go unheeded.  It is indeed a sad commentary on the political process that there have been no modifications in the basis text of Goodlatte’s patent litigation bill in the over one-year hiatus between the first and second iterations.

The situation is dangerous because Goodlatte’s bill violates three fundamental rules of legislative reform.  It moves too quickly.  It develops a set of unneeded ad hoc rules for patent litigation.  And it has a multitude of costly but unnecessary procedural innovations.


As to pleading, Epstein notes:

The first of these difficulties comes with the heightened pleading requirements that are contained in section 3, which cut against the grain of the traditional requirements of the Federal Rules of Civil Procedure, which took the basic position that the complaint was only a way to get the litigation started, not a place to set out a detailed road map.  The two basic arguments behind this position were as follows.  First, in many cases it is not possible at the outset to know the particulars of the defendant’s misconduct, even if there is some general awareness that something has seriously gone wrong.  Normally most parties will make some pre-filing investigation of the basic situation to see whether it makes sense to file costly litigation.  But in many cases, that initial investigation will lead to uncertain results that can only be cured by taking discovery of the defendant to find out which of its processes or products are in violation of the plaintiff’s patents. 


Epstein concludes

But generally, when situations come to the point where litigation has begun, the fact patterns are often sufficiently complex that strict rules have to yield to sound discretion of the trier of fact in how these matters are handled.  In the Goodlatte bill there are a lot of per se requirements, but these are often mindless.  Lurching to the other extreme, there are also a lot of ad hoc reasonableness requirements that leave all too much to the judicial imagination.  It is a sad commentary to say that the Goodlatte bill manages to combine the worst of both worlds: false precision where it is not needed and open-ended discretion where it serves no useful purpose.  The entire bill should be scrapped and sent back to the drawing board.


Epstein acknowledges he did not cover all aspects of the bill.  He did not cover matters relating to section 9, of some interest in view of the Cuozzo decision.

link to page 3:


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