By Dennis Crouch
The text of the proposed SHIELD ACT legislation adds one new section, 35 U.S.C. § 285A as follows:
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Sec. 285A. Recovery of litigation costs
(a) In General- In an action involving the validity or infringement of a patent–
(1) a party asserting invalidity or noninfringement may move for judgment that the adverse party does not meet at least one of the conditions described in subsection (d);
(2) not later than 90 days after a party has moved for the judgment described in paragraph (1), the adverse party shall be provided an opportunity to prove such party meets at least one of the conditions described in subsection (d);
(3) as soon as practicable after the adverse party has been provided an opportunity to respond under paragraph (2), but not later than 120 days after a party has moved for the judgment described in paragraph (1), the court shall make a determination whether the adverse party meets at least one of the conditions described in subsection (d); and
(4) notwithstanding section 285, the Court shall award the recovery of full costs to any prevailing party asserting invalidity or noninfringement, including reasonable attorney’s fees, other than the United States, upon the entry of a final judgment if the court determines that the adverse party did not meet at least one of the conditions described in subsection (d), unless the court finds that exceptional circumstances make an award unjust.
(b) Bond Required- Any party that fails to meet a condition under subsection (a)(3) shall be required to post a bond in an amount determined by the court to cover the recovery of full costs described in subsection (a)(4).
(c) Timing and Effect of Pending Motion- With respect to any motion made pursuant to subsection (a)(1) the following applies:
(1) In the case of a motion that is filed before the moving party’s initial disclosure are due–
(A) the court shall limit any discovery to discovery that is necessary for the disposition of the motion; and
(B) the court may delay issuing any scheduling order until after ruling on the motion.
(2) In the case of a motion that is filed after the moving party’s initial disclosures are due the court may delay ruling on the motion until after the entry of final judgment.
(3) In the case of a motion that is filed after the entry of final judgment, any such motion must be combined with a motion for fees to the prevailing party.
(d) Condition Defined- For purposes of this section, a `condition’ means, with respect to the party alleging infringement, any of the following:
(1) ORIGINAL INVENTOR- Such party is the inventor, a joint inventor, or in the case of a patent filed by and awarded to an assignee of the original inventor or joint inventor, the original assignee of the patent.
(2) EXPLOITATION OF THE PATENT- Such party can provide documentation to the court of substantial investment made by such party in the exploitation of the patent through production or sale of an item covered by the patent.
(3) UNIVERSITY OR TECHNOLOGY TRANSFER ORGANIZATION- Such party is–
(A) an institution of higher education (as that term is defined in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001); or
(B) a technology transfer organization whose primary purpose is to facilitate the commercialization of technology developed by one or more institutions of higher education.