Before the ink has dried on the America Invents Act, a new patent bill was recently introduced in Congress. The bill, dubbed the SHIELD Act (Saving High-Tech Innovators from Egregious Legal Disputes Act) or HR 6245, is sponsored by Congressmen Peter DeFazio, D-Ore., and cosponsored by Representative Jason Chaffetz, R-Utah. This act appears to be a major assault on patentee (patent holder) rights.
The bill introduces new Section, 35 U.S.C. 285A, which reads in part as follows:
“(a) In General- Notwithstanding section 285, in an action disputing the validity or alleging the infringement of a computer hardware or software patent, upon making a determination that the party alleging the infringement of the patent did not have a reasonable likelihood of succeeding, the court may award the recovery of full costs to the prevailing party, including reasonable attorney’s fees, other than the United States.”
The bill has been promoted as a “balanced” bill, addressing plaintiffs’ and defendants’ issues alike. However, it is no such thing – it is designed to shut off patentees, and only patentees.
In my first article, I posed the question whether the “Smart Phone Patent Wars” were giving IP rights – and more specifically, patents – a bad rap? My conclusion was an unfortunate “yes,” with the villains being a handful of companies that willingly contributed patented technologies to various standard setting organizations (SSOs), encouraged their use in a host of consumer electronics, and years later charge the very producers they encouraged to implement these standards with patent infringement. In my second article, I examined the so-called “Fair, Reasonable and Non-Discriminatory” (FRAND) licensing terms that SSOs require of their participants and concluded the phrase has no clear, widely-accepted definition or standards for determining compliance. In my third article, I examined the patent policies of four major SSOs and concluded that none offered any clear guidance on what constitutes a FRAND license leading to unnecessary and counterproductive litigation. In my fourth article, I made a few observations among the flurry of activity as to the market effects of these patent wars. Now, I report on potential congressional action on the horizon and the increasing focus on the U.S. International Trade Commission (ITC).
Pew Research recently reported that 46.0% of Americans now own a smartphone device, making them more commonly owned than regular, basic mobile telephones. This ownership figure rises to 66% for the sought-after consumers population aged between 18-29. Thus, there is no surprise that the smart phone patent wars rage on, and members of Congress have noticed.
Editor’s Note: What appears below are the prepared remarks of Bernard J. Cassidy. Mr. Cassidy testified earlier today before the House Committee on the Judiciary’s Subcommittee on Intellectual Property, Competition and the Internet. The Hearing was on “The International Trade Commission and Patent Disputes.” Mr. Cassidy’s remarks are published here with his permission.
Chairman Goodlatte, Ranking Member Watt, and Members of the Subcommittee,
My name is Bernard J. Cassidy, and I am Executive Vice President and General Counsel at Tessera Technologies, Inc., which is headquartered in the heart of Silicon Valley, in San Jose, California. We have facilities in Charlotte, North Carolina, Rochester, New York, and Arcadia, California as well as in Europe and Asia. I deeply appreciate this opportunity to speak before you regarding the importance of the International Trade Commission to my company and our innovation economy.
“Man controlling trade” outside ITC in Washington, DC, by New York sculptor Michael Lantz (1942).
On Wednesday, July 18, 2012, the Committee on the Judiciary in the United States House of Representatives will hold a hearing titled “The International Trade Commission and Patent Disputes.” The hearing will take place at 10:00 AM in the Rayburn House Office Building, and will take up recommendations by those in the infringer lobby who feel the International Trade Commission must be reigned in and stripped of much of its patent authority. Yes, those who no longer innovate but find it easier to copy want to make it much more difficult to prevent infringing products from entering the United States. Hopefully their efforts will not succeed.
The proposal is modestly (and misleadingly) titled “Modernizing the ITC Patent Process to Ensure Consistent Application of US Patent Law.” Those who seek to weaken the U.S. patent system so that it is easier for them to infringe without consequence are making the argument that the ITC does not apply patent laws the same way as other courts do and are a haven for non-practicing entities seeking to prevent infringing products from entering the United States. Imagine that? A patent owner who wants to prevent infringing products from entering the United States.
Washington, D.C. (June 21, 2012) – BIO commends the House of Representatives for its unanimous approval of S. 3187, the Food and Drug Administration Safety and Innovation Act (FDASIA), which includes a reauthorization of the Prescription Drug User Fee Act (PDUFA).
We appreciate the leadership of Senate Health, Education, Labor and Pensions Committee Chair Tom Harkin (D-IA) and Ranking Member Mike Enzi (R-WY) as well as of House Energy and Commerce Committee Chair Fred Upton (R-MI) and Ranking Member Henry Waxman (D-CA) in reconciling the differences between the user fee packages adopted by the two Chambers and for securing unanimous approval in the House.
Washington, D.C. (May 24, 2012) – BIO commends the bipartisan Senate approval of FDASIA, which includes a reauthorization of the Prescription Drug User Fee Act (PDUFA).
In particular, we appreciate the leadership shown by Chairman Tom Harkin (D-IA) and Ranking Member Mike Enzi (R-WY) to craft a bipartisan measure which will continue to ensure patient safety, access to the newest cures and therapies, and job growth in America. FDASIA reflects the enhancements to PDUFA agreed upon by industry and the U.S. Food and Drug Administration (FDA). It will enhance the development and review of innovative new therapies through increased transparency and scientific dialogue, advancements in regulatory science and strengthened post-market review.
The statement of Senator Patrick Leahy in the Congressional Record sums it all up nicely: “After dozens of congressional hearings, markup sessions, and briefings, and countless hours of Member and staff meetings, through two Presidential administrations, and three Congresses, patent reform is finally a reality.”
On September 16, 2011 President Barack Obama signed into law the America Invents Act, which constituted the most significant overhaul to the U.S. patent system since the Patent Act of 1952. Some of the most pronounced amendments to Title 35 of the United States Code include replacing interference proceedings with derivative proceedings, initiation of inter partes review, eliminating failure to disclose the best mode as a challenge to a claim, the addition of post grant review process and various changes to the fee setting authority by the USPTO. But that was just the beginning.
A frenzy of protest activity was recently unleashed and directed at two bills that sought to prevent online piracy of copyrighted materials. These two bills being considered by Congress would have assisted intellectual property owners who so frequently have their rights infringed online. The PROTECT-IP Act (PIPA) was the Senate version of the bill; The Stop Online Piracy ACT (SOPA) was its counterpart in the House of Representatives. Protests led to many leaders withdrawing support and the bills were scrapped. Further consideration of the issues is, however, ongoing in alternative forms so it is likely useful to substantively address some of the key criticisms of PIPA and SOPA, which are virtually certain to resurface.
The essence of the bills was to enable U.S. law enforcement or a private party to shut down websites that are “dedicated to infringing activities.” Such websites are defined in the bills as those whose primary purpose is infringement.The accuser must show that the website has “no significant use” other than engaging in, facilitating, or enabling any of the following:
Copyright infringement; or
Infringement or violation of any of the protections contained in the DMCA (Digital Millennium Copyright Act) including its anti-circumvention provisions; or
How to Write a Patent Application is a must own for patent attorneys, patent agents and law students alike. A crucial hands-on resource that walks you through every aspect of preparing and filing a patent application, from working with an inventor to patent searches, preparing the patent application, drafting claims and more.
Without hesitation I recommend One Simple Idea and think it should be required reading for any motivated inventor. There is so much to like about the book and so much that I think author Stephen Key nails dead on accurate. The book is educational, information and inspirational. For the $14 cover price it is essential reading.
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