September 23, 2013 | By Daniel Nazer

Troll-Killing Patent Reform One Step Closer

Patent reform is heating up in Congress. Today House Judiciary Committee Chairman Bob Goodlatte released a second discussion draft aimed at preventing abusive patent troll litigation. Chairman Goodlatte has suggested he will move quickly to hold a hearing and committee vote on this legislation.

Today’s draft incorporates many reforms that EFF has long been pushing for. These include:

  • Heightened Pleading: Requiring a patent holder to provide basic details (such as which patents and claims are at issue, as well as exactly what products allegedly infringe and how) when it files a lawsuit.
  • Fee shifting: Requiring the loser in a patent case to pay attorney’s fees and costs. This would make it harder for trolls to use the extraordinary expense of patent litigation to force a settlement.
  • Transparency: The draft includes strong language requiring patent trolls to reveal the parties that would actually benefit from the litigation (called the real party in interest).
  • Joinder: If the plaintiff is a shell-company patent troll, the defendant could require the real party in interest to join the litigation. Even better, a prevailing defendant could collect attorney’s fees from the real party in interest if the patent troll can’t or won’t pay.   
  • Staying customer suits: Requiring courts to stay patent litigation against customers when there is parallel litigation against the manufacturer.
  • Discovery reform: Shutting down expensive and often harassing discovery until the court has interpreted the patent. This should make it easier for defendants to dispose of frivolous cases early before the legal fees and court costs really add up.
  • Post-grant review: The bill expands an important avenue to challenge a patent's validity at the Patent Office (known as the transitional program for covered business method patents). While this procedure is still too expensive for many of the trolls’ smaller targets, we support efforts to make it easier to knock out bad patents.

Taken together, these reforms would make life much harder for patent trolls and make the world safer for true innovators.

Of course, today’s discussion draft is not perfect. Compared to the Shield Act, the attorney’s fees provision is watered down. (It does not include a bond requirement, for example.) And the customer suit provision is too weak. We need stronger reform to stop the disturbing trend of patent trolls picking on customers and end users. Finally, today’s discussion draft focuses on litigation system, rather than targeting the root cause of the problem: the flood of low-quality, over-broad software patents. Despite these reservations, we are encouraged to see so many good reforms in a single package.

With so many patent bills currently before Congress, we have launched a new page reviewing all the proposals. This fall is shaping up to be a key time in the battle against bad patents and trolls. But with many other issues—like the budget—on Congress' agenda, we need to make sure patent reform remains a priority.

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