The year 2013 saw a steady and increasing drum beat for legislation addressing perceived problems with patent litigations started by nonpracticing entities. While none of these legislative efforts has yet become law, progress is being made and 2014 is likely to be a year of legislative action on this issue.
Throughout 2013, there were at least 10 bills introduced in Congress that target issues directly related to NPE patent litigation. Each of the bills discussed below address one or more of the perceived issues with NPE patent litigation, including: shifting of costs and fees; heightening pleading standards; modifying discovery costs and timing, allowing manufacturers to protect end-users, expanding the covered business method review program, and increasing transparency related to the real parties at interest.
In the House of Representatives, most of the bills introduced in early 2013 were rolled up into the Innovation Act, which recently passed the House of Representatives on a bipartisan 325-91 vote. This bill addresses the vast majority of the perceived issues with NPE litigation. In the Senate, instead of an omnibus type bill, there are several smaller bills making their way through committee, each addressing only a small handful of the perceived issues with NPE litigation.
While midterm elections are next year and this Congress has been noted for the markedly small number of bills passed in this partisan era, legislation aimed at addressing perceived problems with NPE patent litigation appears to enjoy a consistent and growing block of bipartisan support.
The Saving High-Tech Innovators from Egregious Legal Disputes (SHIELD) Act
The Saving High-Tech Innovators from Egregious Legal Disputes (SHIELD) Act (H.R. 845) was introduced in the House of Representatives on Feb. 26, 2013, and is not currently being considered by the House Judiciary Committee in light of the recently passed Innovation Act. The bill attempted to put more risk on an NPE by requiring the NPE to post a bond to cover a defendant's legal fees and costs in defending the case.
The Patent Quality Improvement Act
The Patent Quality Improvement Act (S.866) was introduced in the Senate on May 5, 2013, and is currently referred to the Committee on the Judiciary. This bill would maintain the covered business method review program and expand it to all industries instead of just the financial industry.
The End Anonymous Patents Act
The End Anonymous Patents Act (H.R. 2024) was...