An Innovation Ecosystem Drives the American Economy.
The Innovation Alliance stands with consumers and retailers targeted by litigation abuse and supports balanced reforms to a patent system that has produced the strongest innovation economy in the world. America’s inventors and entrepreneurs and the patent system they depend on are the reasons why our country continues to lead the world when it comes to innovation. Any reforms that would alter that system must be approached with caution and forethought with an eye towards improving the system for all stakeholders.
Where we stand on the issues:
- Permanent End to Fee Diversion: The single most important step Congress can take to improve the patent system is to end the diversion of fees and fully fund the USPTO.
- Customer Stay: The “covered customer” definition in any legislation should be narrowly tailored for retailers and end users accused of infringement for selling or using an end user product that is not materially modified by the retailer/end user. The definition of “covered product” should be narrowed in a consistent manner.
- Demand Letters: Language in any legislation should draw a clear line between high volume form demand letters and legitimate licensing communications. Safe harbor provisions should also be included to protect good faith communications notifying others of one’s patent rights.
- Limits on Discovery with Regard to Sequencing and Cost Shifting: Language in any legislation should give the Judicial Conference discretion to develop discovery limits. The Judicial Conference has a robust rulemaking process capable of adopting rules that limit the cost and scope of discovery while not jeopardizing any party’s ability to obtain critical discovery.
- Joinder of Qualified Parties: Language in any legislation should address sham litigation scenarios, including shell companies backed by litigation funders but while supporting legitimate inventors and licensing businesses. Any legislation dealing with the Joinder issue should target abusive litigation actions and NOT certain business models.
- Fee Shifting: Standards should reflect a regime that is similar to the legal standard that applies to copyright infringement. This would give courts discretion to award attorney’s fees without privileging one litigant over the other.
- Enhanced Real-Party-in-Interest Disclosures: Any proposed legislation on this issue should be limited to require disclosure of assignees, entities with the right to sublicense, and ultimate parent entities. Language in legislation should avoid being overbroad since it could be interpreted to include legitimate shareholders and investors.
- Heightened Pleading Requirements: We support a more robust, narrowed pleading standard. The disclosure should be limited to identification of the patent claim(s) infringed, a short and plain statement of the grounds for infringement, and identification of at least one product accused to infringe.
- Could Have Raised Estoppel: Patent holders will be unfairly discriminated against and the complexity of litigation will increase if the America Invents Act is amended to delete the provision barring a post-grant review (PGR) petitioner from asserting in a later civil action that a claim is invalid on any ground petitioner “reasonably could have raised” during PGR.
- Broadest Reasonable Interpretation: The USPTO post-grant and inter parties review standard should utilize the standard used in a civil action.