Patent Reform Update: Leahy Introduces Senate Bill, Goodlatte Circulates House Manager's Amendment

Significant congressional activity took place on November 18, 2013, bringing patent reform several steps closer to enactment. While final passage remains too early to predict (and no single bill has yet been voted out of Committee), yesterday’s actions in both the House and Senate suggest that momentum is building for more patent reform in the United States.

On the same day, two important steps were taken in both chambers of Congress. First, Chairman Goodlatte of the House Judiciary Committee, who last month introduced H.R. 3309 “Innovation Act,” released a “Manager’s Amendment” to his bill and announced that his committee will be holding a markup of the bill on Wednesday, November 20, 2013. The most significant change in the Manager’s Amendment was the removal of the contentious Section 18 Covered Business Method (CBM) amendments that were opposed by certain software and manufacturing companies. This change may increase the likelihood of the bill’s passage, at least in the House.

Second, Chairman Leahy of the Senate Judiciary Committee introduced his much-awaited bill in the Senate. The bill, S.1720 “Patent Transparency and Improvements Act of 2013,” contains many of the same provisions as the House version, but with some notable differences. Key differences between the Senate and House bills include:

• No heightened pleading standard for patent complaints in S.1720. (By contrast, H.R. 3309 would require every infringement complaint to identify the specific claims infringed, the name and serial number of the accused product, where each claim element is found in the accused product, and how the claim terms correspond to the functionality of the accused product.)
• No loser-pays fees-shifting in S.1720. (By contrast, H.R. 3309 would award attorneys’ fees to the prevailing party as the default rule in patent cases.)
• No joinder of “interested parties” in S.1720. (By contrast, H.R. 3309 would require joinder, upon a defendant’s motion, of any (1) assignee of the patent, (2) person with a right to enforce or sublicense the patent, and (3) person having a financial interest in the patent, including the right to receive damages or licensing revenue.)
• No discovery limits in S.1720. (By contrast, H.R. 3309 would limit most discovery until after a claim construction ruling.)
• NEW: Federal Trade Commission policing of demand letters in S.1720, thus making the “widespread sending” of false or misleading demand letters punishable by the FTC. (By contrast, H.R. 3309 has no FTC provision.)
• NEW: Duty to disclose assignee’s “ultimate parent entity” during prosecution and throughout life of patent in S.1720. (By contrast, H.R. 3309 would require such disclosure only after an infringement complaint was filed, not during prosecution.)

Foley IP attorneys will continue to monitor significant legal and legislative developments and provide timely updates to our clients.

Legal News Alert is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our clients and our colleagues. If you have any questions about this update or would like to discuss this topic further, please contact your Foley attorney or the following:

Andrew S. Baluch
Special Counsel
Washington, D.C.
202.672.5520
abaluch@foley.com