Lawmakers try again to curb abusive patent lawsuits

The Innovation Act, introduced in the House of Representatives Thursday, is the same bill that passed the chamber by a 325-91 vote in December 2013. The Senate then failed to act on the legislation, killing the bill during the last session of Congress.

A bipartisan group of seven lawmakers, including Representative Bob Goodlatte, a Virginia Republican and chairman of the House Judiciary Committee, earned praise from several tech trade groups for reintroducing the bill.

The Innovation Action is aimed at businesses that use patent licensing and lawsuits as their primary source of revenue. Critics blame these patent assertion entities [PAEs], often called patent trolls, for an explosion of patent infringement lawsuits in U.S. courts and a flood of settlement demand letters. Many of the demand letters have targeted small businesses that are users of the technologies that PAEs claim to hold patents on.

"Patent trolls don't contribute to the American economy," Representative Peter DeFazio, an Oregon Democrat and bill co-sponsor, said in a statement. "They don't build things, provide services or keep our country moving -- rather, they prey on our small businesses and innovators by manipulating patent laws and extorting billions of dollars each year from them. It's time for Congress to drive these bottom-feeding patent trolls to extinction."

The legislation would require plaintiffs in patent infringement lawsuits to identify the patents and claims infringed in initial court filings, in an effort to reduce the number of lawsuits filed with vague patent claims. The bill would also require judges to award attorneys' fees to defendants of patent lawsuits determined to be frivolous.

The bill would allow manufacturers and suppliers to intervene in patent litigation against their customers, and it creates a voluntary process for small businesses to postpone expensive patent lawsuits while larger defendants resolve similar patent lawsuits involving the same plaintiffs.

The Innovation Act would also require courts to decide early in a case whether a patent is valid, in an effort to limit the length of patent court cases based on invalid claims.

The bill would help to build a healthy U.S. patent system, said Julie Samuels, executive director of Engine, a trade group representing tech startup companies. "This smart legislation would make great strides toward fixing our broken patent system and putting patent trolls out of business," she said by email. "Despite some recent progress in the courts and in the states, trolls continue to cost our economy tens of billions of dollars a year -- and high-tech startups are hurt the most."

Also voicing support for the bill were Yahoo, Verizon Communications, digital rights group Public Knowledge and trade groups BSA, the Computer and Communications Industry Association, the National Cable and Telecommunications Association and the Software and Information Industry Association, among others.

Some groups and lawmakers have questioned the legislation, however. During the December 2013 vote on the last version of the bill, some lawmakers said the legislation would be a victory for large companies at the expense of small inventors.

This past December, members of the conservative lawyer group the Federalist Society for Law and Public Policy Studies questioned the need for the legislation, saying problems with abusive patent lawsuits seem to be exaggerated.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's email address is grant_gross@idg.com.