House Committee Holds Third Patent Reform Hearing in Two Weeks

Committee examines potential fixes from NACS-supported H.R. 9, the Innovation Act.

March 26, 2015

WASHINGTON – Yesterday, the House Judiciary Subcommittee on Courts, Intellectual Property and the Internet held a hearing titled, “Patent Reform: Protecting American Innovators and Job Creators From Abusive Patent Litigation.” The hearing addressed the inability of the current patent litigation system to deter patent trolls and also examined a possible legislative fix to this problem: H.R. 9, the Innovation Act, sponsored by House Judiciary Committee Chairman Bob Goodlatte (R-VA).

NACS, an executive committee member of the United for Patent Reform Coalition, has been actively involved with efforts to reign in abusive tactics by patent trolls and supports the Innovation Act, which would work to protect NACS members from being victims of frivolous lawsuits and demand letters initiated by patent trolls. As end-user customers of everyday technology products, such as WiFi or bar code scanning technology, NACS members are often targeted by patent trolls and pressured into settlements to avoid the lengthy and expensive patent litigation process.

Most of the Subcommittee members were supportive of the Innovation Act, which passed the House of Representatives in the last Congress by a vote of 325-91. The bill would, among other things, require plaintiffs to disclose who the owner of a patent is prior to litigation and explain in their court pleadings why they are filing suit. Additionally, the bill would require courts to decide whether a patent is valid or invalid early in the litigation process, in an effort to ensure that patent trolls do not string out a case for a lengthy period of time on claims that are ultimately found to be invalid. The Innovation Act would also require judges to award attorneys’ fees to the victims of frivolous lawsuits when parties that file suit do so without a reasonable basis in law. And of particular significance to NACS members, one provision would allow small businesses that have been sued for patent infringement (end users) to postpone lawsuits if the manufacturer of the litigated product is engaged in a similar patent lawsuit against the same plaintiff.  

Subcommittee members heard testimony from four witnesses: Mark Griffin, general counsel for Overstock.com Inc.; Kathryn Underwood, president and CEO of Ledyard National Bank; Todd Moore, founder and CEO of TMSOFT LLC; and Bryan Pate, CEO of ElliptiGo Inc.

This is the third hearing on patent reform in the last two weeks. Last week, the Senate Judiciary Committee and the Senate Small Business Committee both held hearings on patent reform. 

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