H.R. 9 (The Innovation Act) is an attempt by the US Congress to fix some of the issues that remain in the US Patent Law.
This bill seeks to address many of the problems associated with how our judicial system handles patent law. For starters, one area the judicial system has failed to adequately handle is cost recovery. In the current law, defendants are forced to spend excessive amounts of money defending against frivolous lawsuits, a problem that often results in paid settlements to avoid the costly legal battle. Currently, a defendant must prove the plaintiff made frivolous claims that are “exceptional” in order to force the plaintiff to pay for defense fees, but this subjective term has been ruled on in a multitude of ways, and rarely ends in the defendant recovering any costs. Often, patent-trolls only pay their lawyers if they win money, which allows the plaintiffs to use considerably more effort to pursue their case than a business that is defending does.
Another major area that has not been addressed adequately by the judicial system is in the clarity of patent pleadings. Currently, plaintiffs only need to claim the defendant infringed the patent without specifying how the infringement occurred. This makes it much easier for plaintiff to file vague, meritless infringement suites that are more challenging to throw out.
Finally, our current patent system also involves a significant amount of discovery abuse, where the plaintiff can demand vast amounts of documents. This process can result in millions of dollars in expenses for the company defending, and needs to be addressed so companies don’t opt to settle rather than use the judicial system to resolve the problem.
Problems like this are causing the cost of patent litigation to increase resulting in a chilling effect on innovation. This article is a must read if you want to understand the current problems with the legal landscape around patents.
