The bipartisan Innovation Act is the best bill yet when it comes to fighting patent trolls. This post is the fourth of a series explaining the bill’s various provisions. While the Innovation Act won't fix every problem with the patent system, it includes a powerful set of proposed reforms that—taken together—will significantly reduce the threat of abusive patent trolls.
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The Innovation Act sets out to solve what Professor Colleen Chien refers to as the "Who Owns What" problem: we currently don't have an effective way of confirming who owns a particular patent, nor do we know what patents a particular person or company owns. A combination of poor record-keeping infrastructure and practices, as well as scheming businesses that transfer patent ownership to shell companies, has resulted in a hazy patent system where the lack of transparency has become a competitive tool.
The Innovation Act would fix this problem by requiring those who claim patent infringement to actually make their cases at the outset—we're talking about simple things like listing the patent(s) they own and which specific parts of those patents they claim the defendant infringes and what the defendant does that allegedly infringes. (The bill also combats this problem with its heightened pleading provision.)
It's not just the details of the case. It's also the real party behind the case. Under the bill, any party with a "direct financial interest" in a patent could publicly become part of the litigation. Many trolls hide behind shell companies and effectively secretly collect their resulting payday. The Innovation Act would effectively put an end to this practice.
Posts in this series:
Part Three: Ending Discovery Abuse
Part Five: Customer Suit Excpetion