Reps. Lofgren, Goodlatte, Coble and DeFazio Introduce Bipartisan Patent Litigation Reform Bill

Press Release

Congresswoman Zoe Lofgren (D-CA) today joined House Judiciary Committee Chairman Bob Goodlatte (R-VA), Subcommittee on Courts, Intellectual Property and the Internet Chairman Howard Coble (R-NC) and Rep. Peter DeFazio (D-OR) in introducing a bill to address the ever increasing problem of abusive patent litigation. The bipartisan Innovation Act (H.R. 3309) builds on the reforms that were made last Congress in the America Invents Act and addresses certain abusive practices taking place in our Courts.

Rep. Lofgren, Chairman Goodlatte, Subcommittee Chairman Coble, and Rep. DeFazio released the statements below on the bill's introduction.

Representative Lofgren: "Introducing this legislation provides an opportunity to curb patent trolls for their drain on U.S. innovation and our economic growth. America's innovation economy is dependent on a functional patent system that promotes invention and competition. This bill is a starting point with additional refinement necessary. I look forward to working with Chairman Goodlatte and my colleagues on the Judiciary Committee in an open and constructive process to move forward the best bill possible to halt abusive practices and protect independent inventors with legitimate patent claims."

Chairman Goodlatte: "Abusive patent litigation is a drag on our economy. Everyone from independent 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 -- wasted capital that could have been used to create new jobs, fund R&D, and create new innovations and technologies.

"The bipartisan Innovation Act is designed to eliminate the abuses of our patent system, discourage frivolous patent litigation and keep U.S. patent laws up to date. These important actions will help fuel the engine of American innovation and creativity, creating new jobs and growing our economy."

Subcommittee Chairman Coble: "This system is not working. Patent owners, even if they successfully win bogus lawsuits, spend millions in resources to litigate. The result has been an enormous drain on American innovation and must be addressed if we intend to remain the world's leader when it comes to new ideas and inventions. Chairman Goodlatte has made patent litigation reform a top priority for the 113th Congress, and while patent litigation is extremely complex, this legislation addresses many of the concerns that have been raised by patent owners."

Representative DeFazio: "Patent trolls drain tens of billions of dollars a year from the productive economy simply by threatening American innovators. In 2011 alone they extracted an estimated $29 billion. Small companies cannot afford drawn out legal proceedings so they are forced to expend precious capital on settling with trolls even if they do not infringe on their patent.

"Patent trolls pad their pockets by buying patents on products they didn't create and then suing companies from every industry for infringement. The bipartisan Innovation Act is a targeted reform that will force patent trolls to take responsibility for their abusive lawsuits without getting in the way of inventors and others that need to go to court to defend themselves."

Additional original cosponsors of the bill include Reps. Lamar Smith (R-Texas), Anna Eshoo (D- Calif.), Jason Chaffetz (R-Utah), Spencer Bachus (R-Ala.), Tom Marino (R-Pa.), Blake Farenthold (R-Texas), and George Holding (R-N.C.).

Key Components of the Innovation Act:

Target 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 court's 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.