WASHINGTON- Today, Congressmen Hakeem Jeffries (D-NY) and Blake Farenthold (R-TX) introduced the H.R. 2639, the “Patent Litigation and Innovation Act of 2013”. The bill represents a bipartisan effort to promote American innovation and job creation in the technology ecosystem by addressing the growing problem of abusive patent litigation.
CONGRESSMAN JEFFRIES: “The legislation is designed to provide a constructive framework for patent infringement cases to proceed while minimizing the problem of abusive litigation. The explosion of patent troll activity diverts resources away from research and development, hinders innovation and stifles entrepreneurship. The civil litigation system is critical to our democracy. In this instance, Congress must prevent it from being abused.”
The Patent Litigation and Innovation Act will require a heightened pleading standard in patent infringement actions, provide end users with the opportunity to stay litigation and limit unnecessarily burdensome discovery until matters related to dismissal motions, transfer of venue issues and claim construction are decided. Additionally, the bill will increase Rule 11 judicial scrutiny for abusive litigation in order to discourage frivolous matters from being commenced.
CONGRESSMAN FARENTHOLD: “Americans need to know they are safe from abusive litigation when they buy a product off the shelf and use it for its intended purpose. The solutions proposed in this bill will deter patent trolls without impeding the rights of responsible intellectual property holders.”
In June 2013, the Executive Office of the President released a report on patent litigation and the innovation economy which cited an exponential increase in litigation activity brought by patent assertion entities (PAEs), commonly known as patent trolls. The Software & Information Industry Association has said that lawsuits brought by PAEs resulted in the loss of more than $29 billion annually and over $500 billion over the last two decades.
PAEs are increasingly concentrating their efforts on small and medium sized businesses, including start-up technology companies in New York City’s growing innovation economy. Last year, 55% of patent litigation cases targeted businesses that make under $10 million annually. The expense involved in frivolous patent litigation is often crippling, thereby justifying reform. This bill seeks to redirect such costs away from frivolous litigation and back into innovation.
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Click HERE to read H.R. 2639, “Patent Litigation and Innovation Act of 2013.”