On Thursday, December 5, 2013, the United States House of Representatives passed the Innovation Act by a vote of 325-91.
Surprisingly, the Innovation Act (HR 3309) had only been introduced on October 23, 2013, and was marked-up on November 20, 2013. So what was the rush? This break-neck pace, which took place in a Congress that has been noted for its extraordinary inaction, is curious to say the least. Indeed, one Member of Congress went much further than raising a curious eyebrow. “This schedule suggests the fix was in,” said Congressman Dana Rohrabacher (R-CA) on December 3, 2013, “The clear message to little inventors: give thanks for your intellectual property rights, because you may not have them by this time next year.”
There is no doubt that Congressman Rohrabacher is correct, even if his criticism seems at first glance to be a bit over the top. There can be no serious disagreement over the undeniable truth that over the last 7 or 8 years there has been a steady erosion of patent rights both in the Courts and thanks to laws passed by Congress. There can also be little serious disagreement that the speedy process afforded the Innovation Act prevented those who favor strong patent rights from mounting a credible opposition to the bill. Unfortunately, the forces that seek to weaken patent rights are well funded and fight the battle each and every day. Even before the America Invents Act (AIA) was passed in 2011 there were efforts underway to plant the seeds of what will be the next “industry ask” of Congress, which is stripping the ITC of its patent jurisdiction or at the least preventing the ITC from issuing exclusion orders. See Follow the Moneyand Weakening the ITC Will Harm the US Economyand Are Some Patent Holders More Equal Than Others?
The Truth is that while innovators spend their time inventing and doing business, not focusing on what has been taken for granted in the United States since the days of Thomas Edison, which is a strong patent system. Indeed, in this round of patent reform Universities, small businesses, technology based start-ups and independent inventors were given no meaningful opportunity to express their views. At the one hearing on the bill David Kappos, former Director of the USPTO and now a partner at Cravath, Swaine & Moore, cautioned Congress about going to fast and pointed out that no independent inventors were even invited to testify. But there is no rest for those who seek patent reforms that make patents less valuable, they are hard at work on whatever the current attempt is to chip away at patent rights, but also working to lay the foundation for further erosion of patent rights.
Louis Foreman (left) and Dr. Gary Michelson (right), taken May 4, 2011, after Michelson was inducted into the Inventors Hall of Fame.
Prominent inventors have now joined the growing chorus of those opposed to the Innovation Act (HR 3309). Specifically, the letter and recommendations below were sent by Louis J. Foreman (Chief Executive Officer, Edison Nation), Dr. Gary K. Michelson. (Inductee, National Inventors Hall of Fame) and Gregory G. Raleigh, Ph.D. (Chief Executive Officer and Chairman, ItsOn). The letter and recommendations were sent to Congressman Bob Goodlatte (R-VA), who is the Chairman of the House Judiciary Committee, Congressman John Conyers (D-MI), who is the Ranking Member on the House Judiciary Committee, Senator Patrick Leahy (D-VT), who is Char of the Senate Judiciary Committee, and Senator Chuck Grassley (R-IA), who is Ranking Member of the Senate Judiciary Committee.
Despite the problems with the Innovation Act and the mounting calls to slow down, Senator Leahy has introduced a companion bill in the Senate, which suggests that this legislation will move extraordinarily quick. See Leahy Bill Released and Leahy. Those who are unhappy with the legislation really need to speak now.
Congressman Goodlatte (R-VA), Chair of the House Judiciary Committee
UPDATED: Monday, Nov. 18, 2013 at 1:13pm
Last week CQ Roll Call reported that House Judiciary Chairman, Congressman Bob Goodlatte (R-VA), is continuing to fast track the Innovation Act (HR 3309) despite growing concerns from both Republican and Democrat members of the House Judiciary Committee. CQ Roll Call reports that there are 8 members of the Judiciary Committee who are asking for more time to study the legislative proposal. Two of those 8 are Congressman John Conyers (D-MI), who is currently Ranking Member on the Committee and himself a former Chair of the House Judiciary Committee, and Congressman James Sensenbrenner (R-WI), also a former House Judiciary Chair.
It is hard to understand the rush to move on the Innovation Act, which was only introduced a little more than three weeks ago on October 23, 2013. Yet, despite bipartisan misgivings within the House Judiciary Committee and a growing concern among innovators and Universities, Goodlatte is planning a markup of the legislation for Wednesday, November 20, 2013.
By e-mail sent late this morning House Judiciary Committee Members were advised that if they wanted Amendments to be considered they needed to be pre-filed no later than 11:15am on Tuesday, November 19, 2013. Accompanying this e-mail were the current version of HR 3309 as well as the Manager’s Amendment.
Of course, action in Committee does not guarantee passage by the full House of Representatives, but a bill supported by a senior member of Republican leadership like Goodlatte should certainly get its day on the floor in the House if it makes it out of Committee, which I suspect it will. Even then it would have to go across the Capitol to the Senate before it would ever wind up on the President’s desk.
CQ Roll Call reported last week that House Judiciary Chairman, Congressman Bob Goodlatte (R-VA), is fast tracking the Innovation Act (HR 3309) despite growing bi-partisan concerns of those on the House Judiciary Committee. Reportedly, a markup of the legislation will be held at some time during the week of November 18, 2013.
But calling the Innovation Act fast-tracked doesn’t do justice to what is really happening. The Innovation Act was only officially introduced on October 23, 2013, and the Committee has not heard from any independent inventors or small businesses. Even the innovator community that stands to lose big is just warming up, this past week with a substantial coalition of University groups and the Biotechnology Industry Organization (BIO) weighing in for the first time, with BIO concluding that the “proposals are not supportable without significant amendment.” The University groups weighing in against the Innovation Act are the Association of American Universities, American Council on Education, Association for American Medical Colleges, Association of Public and Land-grant Universities, Association of University Technology Managers and Council on Government Relations, collectively referred to in their position statement as “the Higher Education Community.”
If Goodlatte is already planning a markup in days and at the same time Universities and BIO are weighing in it almost seems as if the handwriting is on the wall, which it may well be in the House. Still, there are important reasons to want to stop the Innovation Act at least until significant, legitimate concerns are addressed and the bill is amended.
In testimony presented to a U.S. House of Representatives Judiciary subcommittee the Federal Trade Commission described its ongoing efforts to protect competition and consumers in many important sectors of the economy, including health care, pharmaceuticals, and technology.
Testifying on behalf of the FTC before the Subcommittee on Regulatory Reform, Commercial and Antitrust Laws, Chairwoman Edith Ramirez said that, “In an effort to be most effective with limited resources, we pay particular attention to sectors where our action will provide the greatest benefit to the largest number of consumers. Chief among those are health care and the technology sector.”
The testimony outlines the FTC’s critical work promoting competition in health care markets, noting that health care consolidation can threaten to undermine efforts to control rising health care costs. Examples of FTC actions to prevent anticompetitive health care mergers include litigation involving proposed hospital mergers that threaten higher prices and lower quality of care, as well as divestitures in pharmaceutical mergers to preserve competition and maintain competitive pricing for needed medications.
Yesterday, the House Judiciary Committee held a hearing on the “Innovation Act,” HR 3309, a bill sponsored by the Chairman of the House Judiciary Committee and co-sponsored by 10 other Members from both sides of the aisle, including the Chairman of the IP Subcommittee.
The hearing focused on the effect the Innovation Act would have on the problem of abusive litigation practices and on the patent system as a whole. Three central themes emerged from the hearing: 1) there is an urgent need to fully fund the PTO; 2) significant skepticism remains about expansion of the Covered Business Method (“CBM”) program; and 3) some of the more technical aspects of the Innovation Act would help rid the patent system of expensive and wasteful lawsuits. Divergence of opinion remained among the Members, however, about whether Congress should address fee shifting at this time or wait for the Supreme Court to hear the two fee shifting cases before it, although the witnesses agreed that legislation on fee shifting would be helpful, and Congress should proceed with legislation on this front.
Note when reading the report below that the “Innovation Act,” HR 3309, is different than the “Innovation Protection Act,” HR 3349. The Innovation Act is the patent litigation reform measure introduced by House Judiciary Committee Goodlatte and others. The Innovation Protection Act is the PTO funding bill introduced by House Judiciary Committee Ranking Member Conyers and others.
EDITOR’S NOTE: What follows is a summary of the Goodlatte patent bill created by American Continental Group, which is a government affairs and strategic consulting firm in Washington, DC. Manus Cooney, a former Chief Counsel of the Senate Judiciary Committee is one of the partners at ACG, and is also frequent guest contributor on IPWatchdog.com. Cooney and his partners and associates worked to prepare this summary, which was described as a team effort. It is republished here with permission.
Manus Cooney, ACG
Sec. 3. Patent Infringement Actions
Pleading Requirements (p.2)
Amends Title 35 to establish heightened pleading requirements for patent infringement actions. A party alleging infringement must include in the pleading, unless the information is not reasonably accessible, the following:
Each patent allegedly infringed and each claim of each patent that is allegedly infringed
For each claim, which product, feature, method or process are allegedly infringed, including the name or model number; where each element of the claim is fount within the accused product/method; and how the terms of the asserted claim correspond to the functionality of the accused product/method.
Whether each element is infringed literally or under the doctrine of equivalents
A description of the direct infringement, the acts of the alleged indirect infringement that contribute to or are inducing direct infringement
A description of the right of the party alleging infringement to assert each patent identified and patent claim identified
A description of the principal business of the party alleging infringement
A list of each complaint filed, of which the party alleging infringement has knowledge, that asserts or asserted any of the patents identified
Whether each patent is subject to any licensing term or pricing commitments through any agency or standard-setting body
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