Allow me to tick off some of the provisions Representative Goodlatte and Senator Lee did not share with NRO readers:
The “Innovation Act” (really, the Anti-Innovation Act) will create more paperwork when an inventor files an infringement claim, increasing both the costs of defending his rights and the potential for dismissal of a case on a technicality.
H.R. 3309 will convert us to a “loser pays” system, so the potential downside for a patent holder increases dramatically for filing an infringement lawsuit, especially against a large corporation that will spend big.
Expanding the meaning of “loser pays,” it allows the court to bring others into the case involuntarily, as plaintiffs, if they have an “interest” in the patent, thus making those parties liable for significant costs, too.
The bill would create a new requirement that a patent-holder must, once filing a claim for infringement, provide information about all parties with an interest in the patent to the patent office, the court, and the accused infringer. This seriously violates the privacy of business dealings, exposing small inventors, their friends, their suppliers, and anyone else vaguely attached to the inventor’s enterprise. Imagine forcing a patent-holder to provide a list of potential bank accounts (now liable to be raided) to the accused infringers.
Wait, there’s more. Once that requirement has been invoked, the patent-holder must maintain a current record of the information on file at the patent office or forfeit his or her rights. In other words, inventors and investors have a new bureaucratic reporting requirement, dramatically increasing their costs and vulnerability.
Almost forgot: The patent-holder is slapped with a new bureaucratic fee. He’s forced to pay recordkeeping fees to maintain current records at the patent office.
The legislation enables large multinational corporations to create nested “shell companies,” with few assets, that can infringe on patents while the inventor is unable to sue the firms because they are technically “customers.” The firms are free to keep infringing while the original case moves through the system. This process could protect an infringing process for a decade or more while an inventor, if he has the resources, tries to stop it.
The bill limits discovery in a court case unless the judge determines it is necessary and appropriate to expand the process. Infringers, especially big ones like large, multinational corporations, may make an infringement paper trail so broad and diverse that the plaintiff will have to ask repeatedly to expand the scope of discovery. You can guess who will have to pay, proportionately, the higher out-of-pocket expense to obtain the information needed for defense.
Then there’s the Orwellian (think Obamacare) authorization for the patent-office director to create a “patent troll” database and a strategic program to teach small businesses how to defend themselves against those who otherwise would exploit them, those fearsome “patent trolls”! Enemies list, anyone?
Finally, the “Innovation Act” removes Section 145 of Title 35 of the Federal Register, thereby eliminating the independent judicial review of patent applications, which has been the law of the land since 1836. This will leave a patent applicant with no independent recourse outside the patent office.
This bill is not reform. It is an anti-patent, anti-inventor bill. Read it.
— Dana Rohrabacher represents California’s 48th congressional district. He is vice chairman of the House Science, Space, and Technology Committee.