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Busting Myths and Countering Misinformation From the Campaign Against Patent Reform

DEEPLINKS BLOG
July 16, 2015

Busting Myths and Countering Misinformation From the Campaign Against Patent Reform

We’ve seen an all-out assault on the side of the opposition to kill the House’s Innovation Act and the Senate’s PATENT Act. As a result, patent reform stands on shaky ground in Congress.

A common trend has emerged in the anti-reform camp’s rhetoric, though: lies, fabrications, and untruths. We’re frustrated in seeing these myths arise time and again, and we’re going to make an effort to dispel them.

For example, an email sent earlier this week to small businesses in the high-tech space in Connecticut urged owners to oppose the Innovation Act. Much of the email matches the general opposition’s rhetoric, and, well, it’s just plain wrong:

They’re probably going to pass this bill, and you probably will face loser pays and other threatening clauses as a result. The result as of the last time I analyzed this (mid-June) will be that your patent will cost more to win, be susceptible to more post-issuance challenges, and if you want to legally asserted an infringement you better win, because if you lose the presumption will be that you will pay all the winner’s costs. You’ll also have to post a bond to make sure you have the money to pay the winner’s costs.  Your simple message should be that the bill would be bad for small high tech businesses such as yours, and American innovation in general.  They’re attacking trolls by treating all small business innovators as trolls.

Will my patent actually “cost more to win”?

No. Absolutely nothing in the bill addresses the cost of acquiring a patent. The Innovation Act is litigation reform targeted at frivolous suits—it does not affect the process of getting a patent.

Will I be susceptible to more post-issuance challenges?

No. Nothing in the Innovation Act makes it easier to challenge patents. In fact, the most recent version of the bill that passed the House Judiciary Committee included provisions making it more difficult to file certain kinds of post-grant challenges.

If I lose a lawsuit, will I have to pay the winner’s costs?

It depends. But courts would not impose fees simply because a patent owner was unsuccessful. The Innovation Act only shifts fees if a court concludes that the lawsuit was not reasonably justified in law and fact (Sec. 3(b) Fees and Other Expenses). The court also has discretion to make exceptions under special circumstances, such as severe economic hardship to an inventor. The bill targets cases so unreasonable that they should never have been brought. Good-faith actors have no legitimate reason to be concerned.

Do I have to post a bond to make sure I have the money to pay the winner’s costs?

No. There is no language at all in the Innovation Act about posting a bond. Previous drafts of the bill included a bond provision, but these were dropped more than a year ago.

Is the bill bad for small businesses? Does it treat everyone like patent trolls?

No. The reason EFF has supported the Innovation Act over the last couple years is because we think it does a great job of targeting patent trolls and other bad actors without implicating good actors. We’ve said it time and again, but it deserves to be repeated: if you have a quality patent and are asserting it in good faith, the act does not target you.

Will the bill’s customer stay provision leave me without a remedy?

Absolutely not. The Innovation Act includes a sensible provision that allows customers to have patent cases against them stayed when there is parallel litigation against the manufacturer of the accused product. Mass troll lawsuits against customers and end users have become a big problem. The Innovation Act would allow manufacturers to step in and defend their customers. Opponents of reform have claimed that this would sometimes leave patent owners “without a remedy.” But that is simply false. The bill only requires courts to stay customer suits when there is already another lawsuit where the manufacturer or supplier of the accused product is a party (Sec. 5(b)(1) Customer Suit Exception). And the customer must agree to be bound by the results of that suit (Sec. 5(b)(2)). It’s plainly not true, as some have asserted, that patent owners could be forced to seek relief against overseas corporations that might not be subject to jurisdiction.

While we appreciate our opponent’s optimism that “they’re probably going to pass the bill,” the rest of the message is poor form. It’s easy to foment negativity toward reform when you simply lie about what’s in the proposed legislation. Startups, small businesses, and inventors should take pause when they receive such missives. Take some time to read the bills in question, and you’ll discover the criticism crumbles away, leaving language that can only help.

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