I am back in Washington DC fighting for the rights of independent inventors. A lot is happening right now.
The Senate is back from their break and the Judiciary Committee is trying to come up with final language for the patent legislation Thursday. The various factions have come up with what they are calling “compromise” wording, but there is very little difference from what existed before. The bottom line is that not one single thing being proposed helps inventors, and everything being proposed is harmful to us. Altogether, the proposals are fatal to independent invention and innovation in America.
If you are not aware of the details, read the petition. If you haven’t already signed the online petition, I need you to do so (and please verify your signature, or it will not count – several hundred people who have signed have not verified).
One proposal that didn’t even exist at the time of the petition is the issue of bonding. This refers to a patent holder needing to show ability to pay the “Loser Pays” liability of the infringer’s legal costs if the patent holder does not prevail in the patent infringement suit. In other words, if you don’t have a million dollars (or whatever sum they think will be needed), you would not even be able to sue for infringement unless you got bonded for that amount. Considering the risk to the company providing the bond, the cost to an inventor would be very high, and would make the defense of a patent impossible for the average inventor. Without this provision, the legislation is still fatal.
With all this going on, the Supreme Court had a very big decision today regarding fee shifting (loser pays) in patent cases. In patent infringement cases, the judge has had the ability to make the non-prevailing party pay for the other side’s legal costs, but it was only for “exceptional cases,” and was done rarely. Today’s decision defined “exceptional” as a case that “…stands out from the others with respect to the substantive strength of a party’s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated…”
I have some concern that the language is too broad, but if this is interpreted as it should be, frivolous cases should be the only ones where fee reversal applies. And, it apparently applies to plaintiffs as well as defendants, so an infringer who mounts a frivolous defense would apparently be liable for the prevailing patent holder’s legal costs. If the real target of the proponents of the patent legislation is frivolous litigation, this decision should change things. Certainly, there are those behind the legislation who want to eliminate legitimate litigation, so now is the time to push hard to end any further “loser pays” legislation.
Other significant news is the rate that patents going through the “post issuance procedures” created by the America Invents Act are being invalidated. The America Invents Act created new methods to invalidate an issued patent: Post Grant Review, Inter Partes Review, and Covered Business Method (CBM) Review. These are new procedures, but reports are showing that the invalidation rate of patents using these procedures is around 76%! This means that an infringer has a 76% chance of invalidating a patent that he is infringing. This obviously was not the stated intent of these procedures, and this information makes it totally obvious that, right now, rather than expanding these procedures, we should be looking at eliminating them. But the new legislation actually expands Post Grant Review and CBM Review significantly!
With the Supreme Court Decision and the new data on the rate of patent invalidation from the new post issuance procedures, we have a better chance than ever of stopping this terrible legislation. I need you to call and email your Senators again. Tell them that there is no longer any need for “Loser Pays” because of the Supreme Court decision April 29th on fee shifting. Tell them that reports are showing that patents that go through the new “post issuance procedures” from the America Invents Act are being invalidated at a rate of 76%, which is way beyond what anyone thinks is reasonable. Now is the time to hold off on any new patent legislation until a complete study of the effects of the America Invents Act is done – a study which was called for by The America Invents Act itself but has not been done. It is imperative that this be done before our economy is irreversibly damaged.
Thank you in advance for your help. When Paul Morinville and I started going to DC, it looked like we had no chance of stopping this train. Gradually, with your help, we have significantly changed the situation. Now we really have a chance of stopping this terrible legislation, and it can be done this week. Please call and email your Senators with this new information and stand up for your rights.
Randy Landreneau, Founder
Independent Inventors of America