Rep. Goodlatte Introduces "Innovation Act" to Combat Patent Trolls

by McDonnell Boehnen Hulbert & Berghoff LLP

Goodlatte, BobAfter releasing two "discussion drafts," Rep. Bob Goodlatte (R-VA) (at right), the Chairman of the House Committee on the Judiciary, finally introduced a bill in the House on October 23, 2013, with the non-descript title of "Innovation Act."  Rep. Goodlatte had released his first discussion draft on May 23, 2013, and a substantially revised draft dated September 6, 2013.  Many of the provisions of the second draft were met with skepticism in the patent community, and unfortunately, the currently introduced bill differs only on minor respects.  At the time of release of the second discussion draft, we highlighted some of the major provisions (see "Rep. Goodlatte Introduces Second 'Discussion Draft' of Legislation Aimed at Curbing 'Abusive Patent Litigation'").  In an effort to minimize repetition, we will point out some of the changes that were made to the bill in the intervening month, and we highlight some of the issues or concerns that the bill presents.

We will also only focus on the section dealing with patent infringement actions here, considering the motivation behind the present bill was to combat the perceived "patent troll" problem.  Rep. Goodlatte explained when he release the first discussion draft:  "This bill helps to address the issues that businesses of all sizes and industries face from patent troll-type behavior and aims to correct the current asymmetries surrounding abusive patent litigation."  Of course, as whenever the derogative term is invoked, this bill does not attempt to define what a "patent troll" is.  As such, the bill does not adequately differentiate between practicing and non-practicing entities.  In other words, the bill is not narrowly tailored to address the problem that it was introduced to solve.  Therefore, even if the goal is to take down the trolls, this bill could have the unintended consequence of taking down the entire patent system with it.

One of the most significant problems with the present bill is the move from "notice" pleading to initiate a patent infringement lawsuit towards something that much more resembles the detail required by infringement contentions not normally required until much later in the litigation.  Therefore, the type of information that the bill will require any party asserting a patent (whether in the complaint, counter-claim, or cross-claim) to plead includes an identification of each patent and each claim allegedly infringed, an explanation as to where each element of each claim is found in each "accused instrumentality," whether each element is infringed literally or under the doctrine of equivalents, and how the terms of each claim correspond to the functionality of the accused instrument.  It is unclear with this level of detail whether claim charts will be required to satisfy this pleading requirement.  The pleadings will also require a description of the direct infringement, the acts of any alleged indirect infringement, and the right of the party to assert the patent, a list of complaints already filed which identify the same patent, and whether the patent is subject to any licensing terms or pricing commitments.  Of course, a similar requirement is not imposed on an alleged infringer pleading invalidity of the patent, which may by understandable considering the time constraints involved in answering a complaint.  However, this is not true when a potential infringer brings a declaratory judgment action including a count of invalidity, but the bill does not address this situation.

One of the problems with such heightened pleading standard is that accused infringers might be able to successfully challenge a patent infringement lawsuit on the sufficiency of the pleadings without ever having to address the merits of the case.  Even though the bill provides what type of information must be included in the complaint, it does not specify the level of detail required.  It is also unclear what the penalty will be for patent holder failing such a sufficiency challenge.  Parties normally have the right to amend the complaint once without seeking leave of the Court, but will the courts freely grant leave if more than one complaint is needed?  More importantly, if the patent holder's infringement contentions are modified during discovery, will an amended complaint need to be filed?  Will information contained in the complaint lead to any estoppel issues down the road?  And, if the alleged infringer challenges the sufficiency of the Complaint, can the patent holder seek limited discovery for the purposes satisfying the pleading requirements?  Unfortunately, none of these issues are addressed by the bill.

On the bright-side, one of the changes included in the bill since the second discussion draft is that it now includes a provision for situations in which the information is not readily accessible to a party.  However, to invoke this provision, the patent holder will still need to include in the pleadings why the undisclosed information was not available and the efforts undertaken to access this information.  Of course, as with the issues raised above, it is unclear what the standard will be to determine if information is, in fact, unavailable, and what that standard will be to determine whether research efforts were satisfactory.  The newly introduced bill also includes a provision for filing such a complaint under seal if it contains confidential information.

Another controversial provision of the bill relates to significant proposed changes to 35 U.S.C. § 285.  This section currently provides for the possibility of awarding attorney's fees to the prevailing party in "exceptional circumstances."  However, the newly introduced bill flips the default, so instead of attorney's fees being a possibility in certain cases, the bill requires courts to award reasonable fees to the prevailing party unless they "find that the position of the nonprevailing party or parties was substantially justified or that special circumstances make an award unjust."  It is clear that the purpose of this provision is to provide the courts with the ability to "punish" non-practicing entities that are considered to assert their patents abusively.  However, this provision will likely to have the consequence of stifling legitimate patent infringement lawsuits, regardless of whether the patent holder is a practicing entity or not.  If the goal is to enable the courts to curb patent abuse, 35 U.S.C. § 285 as it currently stands can be amended to remove the "exceptional circumstances" requirement, as many commenters have suggested and as introduced in other bills currently pending in Congress.

Rep. Goodlatte and others were motivated to introduce this bill to curb the perceived patent assertion abuses that have been so frequently reported in the mainstream media (usually without much factually support for the proposition).  Instead, the bill that was introduced is not narrowly tailored, but rather is a blunt instrument that will impact all patent infringement actions (outside of Hatch-Waxman actions brought pursuant to 35 U.S.C. § 271(e)(2)).  It is important to note, however, that this bill has yet to be discussed by the Committee on the Judiciary, so the chance of it passing the House in its current state, much less passing the Senate, is highly unlikely.  We will, of course, continue to follow and report on the progress of this bill, as well any comparable bills that are introduced in either the House or the Senate.


Written by:

McDonnell Boehnen Hulbert & Berghoff LLP

McDonnell Boehnen Hulbert & Berghoff LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.