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ICYMI- Congress to Consider Patent Litigation Reforms This Week

ACM’s Tech Policy Weblog
Congress to Consider Patent Litigation Reforms This Week
Posted: March 4, 2013 17:21

The hearing is expected to focus on potential legislative reforms to enhance and strengthen the American Invents Act and to address issues related to recent patent litigation trends.

One topic will be the recently introduced “Saving High-Tech Innovators from Egregious Legal Disputes Act of 2013″ (SHIELD Act) (H.R. 845), sponsored by Reps. Jason Chaffetz (R-UT) and Peter DeFazio (D-OR). Rep. Chaffetz serves on the Subcommittee. H.R. 845 is a revision of the proposed SHIELD Act of 2012 that died in Committee last session. The proposed SHIELD Act of 2013 contains two major changes. It would extend the “loser pays” regime to all types of patents, not just computer and software-related patents. It also changes the threshold for when the loser must pay the winner’s litigation costs from the “party alleging the infringement of the patent did not have a reasonable likelihood of succeeding” to a categorical approach targeting patent trolls. The loser-pays regime would not apply if the losing party would be able to meet at least one of three conditions: (1) original inventor, (2) an entity making a “substantial investment” in the patent through production or sale, and (3) university or technology transfer organization. Because patent trolls are businesses that mainly purchase patents and then license those patents, they likely would not be able to qualify under these three categories and thus would be subject to the loser-pays regime.