- The PATENT Act in Its Infancy
- May 29, 2015 | Authors: Jacob R. Graham; Jura Christine Zibas
- Law Firms: Wilson Elser Moskowitz Edelman & Dicker LLP - Chicago Office ; Wilson Elser Moskowitz Edelman & Dicker LLP - New York Office
- The Senate Judiciary Committee members introduced the bipartisan Protecting American Talent and Entrepreneurship Act of 2015 (the PATENT Act) on April 29, 2015, aimed at curbing abusive patent practices and litigation. The Committee held a full-committee hearing on “S. 1137, the PATENT ACT - Finding Effective Solutions to Address Abusive Patent Practices” the following week on May 7, 2015. The Committee and stakeholders discussed the provisions of the legislation at length and took into account comments, including comments on the concerns with the inter partes review (IPR) and post-grant review (PGR) proceedings that are purportedly being abused.
The PATENT Act as introduced consists of 16 sections, a few of which are briefly discussed herein. The PATENT Act aims to curb abusive patent practices and litigation, though the debate in the Senate will continue on whether the Act actually accomplishes this goal.
Section 3 of the PATENT Act requires certain pleading requirements for patent infringement cases and early disclosure of information, such as the assignee, licensee or entity with a financial interest, and a list of each claim or lawsuit filed by the patentee during the past three years that asserts or asserted the at-issue patent. The pleading requirements are intended to track Rule 8, and the early disclosure of information should assist accused infringers (and the Court) with assessing the strength of the claim.
Section 7 allows for reasonable attorney fees if the non-prevailing party’s litigation position is not objectively reasonable, unless special circumstances would make an award unjust. Fee-shifting has been a main target of patent reform ever since the Supreme Court relaxed the "exceptional" attorney fees standard under section 285 in the 2014 Octane Fitness decision. Section 7 appears to relax the standard even further by setting forth an “objectively reasonable” standard. If fee-shifting is widely applied by the courts, plaintiffs will evaluate cases carefully before asserting patent infringement claims.
Section 8 requires pre-suit notice and demand letters to contain certain specific information, including each patent and at least one claim that is believed to be infringed, each infringing article or process, a clear and detailed description as to why each patent is infringed, and the identity of any person with a right to enforce each patent. By requiring these specific details, this section would resolve the issue of whether a judicial controversy exists, which is often raised by defendants in patent declaratory judgment actions. And much like Section 3, Section 8 will assist in allowing the alleged infringer to evaluate the accuser’s claim. Currently, letters sent by patent owners list only a patent number(s) and a threat of litigation with nothing further to assist the alleged infringer with evaluation of the claims. If passed, Section 8 would provide the alleged infringer an opportunity to evaluate a case internally and determine a strategy of resolution or litigation removing the current “guessing game.”
The Committee published a Short Section-by-Section of the PATENT Act and the entire S.1137, which can be found on the Senate Judiciary Committee’s website.