To paraphrase Mark Twain, reports of the end of CLS Bank v. Alice Corporation may be greatly exaggerated.
After a greatly–muddled en banc Federal Circuit opinion added only confusion, rather than clarity, to the contentious issue of software patentability, the Supreme Court has granted a writ of certiorari to address the following issue:
“Whether claims to computer–implemented inventions – including claims to systems and machines, processes, and items of manufacture – are directed to patent–eligible subject matter within the meaning of 35 U.S.C. § 101 as interpreted by this Court.”
Having filed an amicus on this issue before the Federal Circuit on behalf of leading Internet retailers, we look forward to providing our two cents on this topic.
Who knew members of Congress could rally around patent reform (again) as a bipartisan issue? But Rep. Bob Goodlatte’s Innovation Act passed the House of Representatives yesterday by an overwhelming vote of 325–91. Provisions of interest include:
A requirement that a patent infringement complaint identify what claims are allegedly infringed and how.
- Early disclosure of who owns the patent and who has rights to license or sublicense it.
- A loser–pays system in which a losing patent–owner must be the accused infringer’s fees if its claims were not reasonably justified under the law.
- A provision that a party that an affiliate of a losing patent–owner may be on the hook for fees if the official owner cannot afford fees. This is designed to avoid shell games in which patent trolls hold the patent in one company and their money in another.
- A provision authorizing courts to limit discovery until after claim construction. This is inherent power that courts already have, but may encourage more courts to follow this path.
- A stronger provision allowing manufacturers to intervene in suits against customers. If a manufacturer intervenes and the customer agrees to be bound by the result; the suit against the customer will be stayed.
- A directive to the judicial conference to promulgate rules and procedures to improve the effectiveness and trim the costs of discovery.
- A number of studies into issues ranging from patent quality to a patent small claims court to the effect of bad faith demand letters.
The ball is now in the Senate’s court, but the prospects of another round of reform seem promising. Of course, the promise of the last round of patent reform exceeded the results. Here’s hoping the same idea yields different results this time.
We’ve documented the rise of Delaware as a patent litigation venue—joining the Eastern District of Texas as the go–to jurisdictions for the majority of all patent cases filed in the country. Unlike the Eastern District of Texas, however, the District of Delaware has not adopted formal patent rules or otherwise taken steps to differentiate how patent cases are handled in the district. In a sign that times may be changing, and in light of the court’s patent–heavy docket, the district has announced the formation of a Patent Study Group to identify potential best practices for managing complex patent litigation. The Group will solicit input from Delaware lawyers, out–of–state patent practitioners, and other parties interested in “understanding and improving the practice of patent litigation.” This will be a group effort worth watching, and possibly worth waiting for.
If you haven’t watched it already, “Henry Ford, Patent Trolling & The Innovation Act: A Patent Reform Primer” is an entertaining and well-done vignette from Congressman Bob Goodlatte’s office.
(Although we could only wish it was preceded by the ‘Picture Pages’ theme song from the Bill Cosby educational show that ran during the 1980s).
As we head off to our respective holiday gatherings, we at IPWise will leave you with some patents to accompany your pumpkin pies. Not to worry that it will interfere with your digestion, as we simply direct you to some of the best past compilations of wild and wacky Thanksgiving-related patents.
On the eve of Black Friday and Cyber Monday, we write to discuss shopping of a different sort – forum shopping, and, more specifically, the practice of concentrating patent lawsuits in a few districts (Delaware, Eastern Texas, Central California, and, increasingly, Northern Illinois).
Northern Illinois, it would seem, may be less than pleased at the holiday traffic. In a sua sponte order, Judge Milton Shadur recently ordered a plaintiff to file a statement as to why its infringement action should not be transferred, since the complaint “has the appearance of a potential poster child for the cottage industry of forum shopping.”
The three-page order is worth a read over bites of turkey this week, if for no other reason than the corny pun on the word “patent.”
We’ve written numerous times about the topic of patent reform lately, because there are numerous bills vying for Congressional attention this term.
But the latest approach, which comes to us courtesy of Patently-O, is a proposal that would focus aim on a new target: the “demand letters” frequently sent by patent assertion entities prior to, or in lieu of, litigation.
The most egregious offenders may launch hundreds of such letters to targets all over. The proposal requires every demand letter to meet certain minimum requirements and, upon reaching a threshold of 20 or more demand letters, complying with certain PTO reporting requirements. Failure to comply may, among other things, trigger action by the FTC.
While the proposal could no doubt use a little tinkering, it is an interesting approach – but one wonders whether, if passed, the result would be even more patent owners filing suit first, and asking questions second.