Adios, Patent Trolls: House Passes Bill to Fix Our Patent System & Protect America's Innovators

Last week in the House, we took a necessary step towards ending the abuse that runs rampant in the U.S. patent system. In an overwhelming bipartisan vote of 325-91, we passed H.R. 3309, the "Innovation Act," a measure that will eliminate the abuses of our patent system by discouraging frivolous patent lawsuits.

The patent system is central to the United States’ competitiveness, job creation, and future economic security. Its designed to protect and promote American innovation. However, in recent years, abusive patent litigation—“patent trolling”—has skyrocketed, with companies emerging solely to buy questionable and vaguely-defined patents and assert them against thousands of end users in hopes of extracting licensing fees. It’s one of the reasons there is no Wi-Fi in Whataburger. Abusive patent litigation is a drag on our economy. This problem impacts businesses and industries of all types, as well as the jobs of the people who work for them, from the tech sector to the hospitality industry, even grocery stores. Everyone from inventors, to start-ups, to mid and large sized businesses face this constant threat. The tens of billions of dollars spent on settlements and litigation expenses associated with abusive patent suits represent truly wasted capital – capital that could have been used to create new jobs, fund research and development, and create new innovations and technologies. This system has essentially led to legalized extortion - and is an issue that badly needs to be addressed.

Last weeks passage of the Innovation Act ensures we can significantly curb this problem by improving the U.S. patent litigation system and targeting abusive patent trolls by discouraging frivolous patent lawsuits within our patent system.

Here are the key components of the Innovation Act:

Targets Abusive Patent Litigation: The bill targets abusive patent litigation behavior and not specific entities with the goal of preventing individuals from taking advantage of gaps in the system to engage in litigation extortion. It does not attempt to eliminate valid patent litigation.

Protects the Patent System: The patent system is integral to U.S. competitiveness. This legislation does not diminish or devalue patent rights in any way.

Increases Transparency: This legislation includes heightened pleading standards and transparency provisions. Requiring parties to do a bit of due diligence up front before filing an infringement suit is just plain common sense. It not only reduces litigation expenses, but saves the courts time and resources. Greater transparency and information is a good thing and it makes our patent system stronger.

Modernizes Fee Shifting: The legislation includes a modernized version of Section 285 fee shifting that is fair, clear and will ensure consistent judicial determinations.

Provides Greater Clarity: The legislation provides for more clarity surrounding initial discovery, case management, joinder and the common law doctrine of customer stays. The bill works hand-in-hand with the procedures and practices of the Judicial Conference and the courts.

Small Business Education: The bill provides for small business education and outreach by the U.S. Patent and Trademark Office.

Now that the Innovation Act has passed the House, its my hope that the Senate takes it up soon so this important measure can become one step closer to becoming law. The bottom line: it offers common sense reforms and is good for job growth and innovation.