House Approves NSBA-Opposed Innovation Act

June 16, 2015

pic-court-gavelOn Thursday, June 11, the House Judiciary Committee approved the NSBA-opposed Innovation Act (H.R. 9) 24-8. Although Chairman Bob Goodlatte (R-Va.) offered up a manager’s amendment which tweaked some of the language in H.R. 9 to make it more closely resemble the Senate’s Protecting American Talent and Entrepreneurship (PATENT) Act (S. 1137), the approved legislation didn’t ultimately include enough protections for small inventors and remains very problematic.

Of the five out of 19 offered amendments which passed, one would require a study of discovery in patent litigation in order to better curtail abusive lawsuits. Those voting against the final bill were: Republican Rep. Louie Gohmert (Texas), Ranking Member John Conyers (D-Mich.) and Democratic Reps. Sheila Jackson Lee (Texas), Hank Johnson (Georgia), Ted Deutch (Fla.), Karen Bass (Calif.), David Cicilline (R.I.), and Scott Peters (Calif.).

This most recent markup follows on the heels of the June 4 markup and subsequent approval in the Senate Judiciary Committee of the Protecting American Talent and Entrepreneurship (PATENT) Act (S. 1137). The sponsors appear to be open to additional changes as both bills make their way to their respective floors, but no specific timeline has yet been identified in either the Senate or House.

Both H.R. 9 and S. 1137 stem from good-intentioned efforts to address some of the problems with the 2011-passed, NSBA-opposed America Invents Act, including the goal of stopping the practice of fraudulent and abusive patent demand letters from so-called “patent trolls”. Unfortunately, these bills go too far in their efforts to reform the patent system and will greatly weaken the ability of patent holders to legitimately protect their intellectual property.

Earlier this week, the U.S. Small Business Administration Office of Advocacy unveiled a statutorily-mandated report on the impacts of the America Invents Act on small businesses. Unfortunately, the report found that there simply is not enough data available yet “… to make a call, but the signs aren’t positive for small businesses.”

NSBA has weighed in with letters of opposition to both the PATENT Act and the Innovation Act, and is instead urging lawmakers to support the Support Technology and Research for Our Nation’s Growth (STRONG) Patents Act of 2015 (S. 632) in the Senate, and the Targeting Rogue and Opaque Letters (TROL) Act of 2015 (H.R. 2045) in the House. Both the STRONG Patents Act and the TROL Act would improve the current patenting system by addressing patent trolls and avoid many of the burdens associated with S. 1137 and H.R. 9.

The TROL Act focuses on abusive patent demand letters and would provide the Federal Trade Commission authority to levy fines on patent trolls, while ensuring small patent holders aren’t inadvertently punished. It includes the following protections for small patentees: the “pattern or practice” requirement that would target mass mailing of these demand letters; a “bad faith” requirement to focus on purposefully deceptive demand letters; and the establishment of a uniform federal standard for enforcement of patents.

The STRONG Patents Act also addresses abusive demand letters as well as a number of other problems under the current patenting system, including: providing the Federal Trade Commission greater authority in going after patent trolls; ensuring that pleading standards for patent-infringement cases match the standards used for all other forms of civil actions; creating balance in post-grant reviews to ensure a quick and fair process; and conducting a study on how small businesses are impacted by the U.S. patent system.

NSBA is urging all small-business owners to weigh in on the patent reform debate, and contact your lawmakers TODAY.

Click here to view NSBA’s letter of opposition to the Innovation Act (H.R. 9)

Click here to view NSBA’s letter of opposition to the PATENT Act (S. 1137)

Click here to view NSBA’s letter of support to the TROL Act of 2015 (H.R. 2045)

Click here to view NSBA’s letter of support to the STRONG Patents Act of 2015 (S. 632)