Posts Tagged: "Innovation Act"

A brake-down of the major provisions, the Amendments that passed and some key Amendments that failed… 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. “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.”

Dean Kamen: “I have a lot of concerns [that H.R. 3309] will serve to dramatically increase the barriers – especially for small inventors – to be able to get and protect their intellectual property, which as a consequence will prevent the public from getting access to what should become the next generation of great technology that will deal with all issues – health care, environment and education…If anything this country should be finding ways to strengthen the patent system in the global competitive environment, not make it harder to get and protect intellectual property. We need to add incentives, not add barriers.”

“Notably, the concerns of key inventor stakeholders like us – principally small companies that create the fundamental inventions that drive our innovation economy – have not yet been evaluated in depth. Historically, the vast majority of legitimate patent holders have honorably sought the fruits of their labor through patent rights promoted by the Constitution and secured by Congress, by licensing when possible and litigating when necessary. Our nation and, indeed, our planet have benefitted enormously as a result of the identification and disclosure of these discoveries through the U.S. patent system. Legitimate inventors and patent holders should not be confused with, or punished as a result of, a small minority of bad actors who create shell entities that send mass demand letters for the purpose of seeking money under the threat of unjustifiable litigation.”

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… One major question is whether we really want to go to a loser pay system with respect to patent infringement litigation? That sounds nice, but it will no doubt have a chilling effect, perhaps most chilling on the entities that are not abusers of the litigation system. It will undoubtedly make it harder for small businesses and start-ups to obtain the critical funding they need because investors will rightfully worry about whether the company may ultimately become embroiled in patent litigation, lose and then have to foot the bill for the entirety of the litigation. Even more problematic is the loser pay provisions coupled with the joinder provisions, which the University community believes could lead to entities being pulled into patent litigation against their will. If that happens and they lose they would be on the hook for paying the fees of the other side despite not willingly participating in the litigation. How is that fair? That would have a significant chilling effect without a doubt.

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.”

Tech sector giants have been crying and moaning about how the patent system has run amok and needs to be scaled back, and continually beg for patent reform that would gut the patent system and weaken patent rights… Even mighty Microsoft couldn’t maintain their monopoly, and only the foolish would anticipate Google, Facebook and other tech giants to be on top indefinitely. That isn’t how the tech sector works, or is intended to work. But if a vibrant, robust and strong patent system is not there for start-ups today they will never become the giant, innovation shifting, growth companies of the future. That would be terrible for the economy, lead to stagnant innovation and guarantee that slothful, giant companies that have lost the ability to innovate would remain dominant rather than going the way of the dinosaur.

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.