Big news in patent reform: the Innovation Act, our favorite troll-killing bill, has cleared its first major political hurdle. Yesterday, the House Judiciary Committee resoundingly voted 33-5 to send the bill to the floor. Better yet, the amendment process added back in two pieces we worried were missing—demand letter reform and covered businessed method patent (CBM) review.
First, the good news: this bill is the best shot we've had at meaningful patent reform yet. Specifically, the Innovation Act is designed to target the patent troll problem, something Congress chose to entirely ignore the last time it addressed patents. It includes a provision that would, in certain circumstances, shift fees away to winning parties from the troll who brought the suit and lost. It would also require that trolls present the basic facts about their case the outset, such as who owns the patent and what products allegedly infringe it. It would allow consumers facing trolls to put litigation on hold while the suppliers and manufacturers of products and services at issue fight the fight at hand.
We believe simple common-sense reforms like these would go a long way toward restoring fairness in the system by giving defendants access to information and the tools they need to fight back against trolls.
Second, the news is not all good: in the negotiations leading up to yesterday's vote, the important fee-shifting provision got watered down. And while demand letters and CBM were included at the last minute, those provisions have been so weakened as to barely do anything (indeed, in the case of CBM, the Innovation Act now merely includes a study to investigate that procedure instead of including the necessary expansion to keep it alive). That said, the fact that these provisions remain in the bill at all is important, particularly as we look to the Senate where more bills that squarely address these issues are pendng (more on demand letters here and CBM here).
Stay tuned. Things are moving quickly and we remain cautiously optimistic that we are getting closer to meaningful patent reform.