Patent Reform is back in Congress and this time it is House Judiciary Bob Goodlatte, who will be reintroducing the legislation dedicated to reduce “patent trolling.” Patent trolling, as it is colloquially known, is a strategy typically employed to enforce patent rights owned by non-practicing (emphasis added) entities against accused infringers in attempts to collect lost royalties and/or licensing fees.
A classic example of the Patent Trolling strategy is illustrated in Smartfish LLC v. Apple, Inc. case decided in the Eastern District of Texas (Civil Action No. 6:15-cv-145) earlier this year. In Smartfish, the Defendant, Apple, Inc. lost $533 million to an 8th-grade dropout patent troll Plaintiff for patent infringement.
Accordingly, the Innovation Act as it is dubbed, is being presented to Congress, in efforts to build on the reforms that were proposed in the America Invents Act. As such, the Innovation Act is proposing for a transformation in patent litigation by incorporating a requirement that the Plaintiffs be more specific in their complaints. Additionally, the Innovation Act is mandating to increase transparency in terms of patent ownership, to minimize litigation costs, and to provide immunity to end-users from infringement suits.
More specifically, the Innovation Act will address raising the pleading requirements in the complaint for patent infringement, particularly identifying the patent claims asserted, and the real parties in interest. Accordingly, any real party in interest can be added to the litigation, such as another limited liability company or corporation that generates income from the Plaintiff Patent Troll. Additionally, the Act will also address litigation costs. Expensive discovery costs that are typically in the millions of dollars will be paid by the party requesting it. Finally, the Act proposes protecting end users, who are the buyers of infringing products, by bringing in the manufacturer of the infringing product first, before the end user is involved.