Patent Abuse Reduction Act of 2013 (S.1013)

By Dennis Crouch

If it exists, the patent heat in Congress right now is focused on “curbing abusive patent litigation.” A variety of bills have been introduced, including the SHIELD Act that would introduce a one-way fee shifting system that would require losing plaintiffs to pay the attorney fees of successful defendants. H.R. 845. The Bill also requires that the patentee plaintiff (or DJ Defendant) post a bond early in the lawsuit to ensure that the fees will be paid. Under its current structure, the bill is limited to cases where (1) the party asserting the patent is not the original inventor or original assignee; (2) the party asserting the patent is not exploiting the patent “through production or sale of an item covered by the patent” and (3) the party asserting the patent is not a University or the US Government. If the patentee meets any one of those prongs then they escape the fee shifting. At the conclusion of the case if the patentee loses then the court must award the prevailing party “full costs … including reasonable attorney’s fees.”

Senator Cornyn this week introduced another bill – the Patent Abuse Reduction Act of 2013 (S.1013). According to Cornyn’s press release, the bill “would require plaintiffs to disclose the substance of their claim and reveal their identities when they file their lawsuit; allow defendants to hale into court interested parties; bring fairness to the discovery process; and shift responsibility for the cost of litigation to the losing party.”

Transparency In Enforcement: S.1013 proposes that the initial complaint must also “the identity of any person with a direct financial interest in the outcome of the action, including a right to receive proceeds, or any fixed or variable portion thereof; and a description of any agreement or other legal basis for [the] financial interest.”

Presumption of Attorney Fees: As with the SHIELD Act, S.1013 would more readily shift attorney fees. This time, however, the fees would be balanced and awarded to the prevailing parties regardless of whether that be a plaintiff or defendant. However, no attorney fees would be awarded when the non-prevailing party’s “position and conduct … were objectively reasonable and substantially justified” or where the exceptional circumstances make the award unjust. If the patent plaintiff cannot pay the attorney fees, the bill would allow for those fees to be paid by others with an interest in the litigation. Defendants would also be permitted to join interested parties into the litigation.

Heightened Pleading Requirements: S.1013 proposes that a complaint must draw a link between particular asserted patent claims and any accused products if such a link “is known.” In addition, the bill would require a complaint to include “detailed specificity” as to “how the terms in each asserted claim[s] … correspond to the functionality of the accused instrumentality.” The Bill would also require the Supreme Court to review model complaint Form 18 to ensure that it conforms with the law.

Discovery After Claim Construction: S.1013 proposes to limit discovery until after claim construction has been complete.

Additional Major Limits on Discovery: Perhaps the most dramatic changes proposed in the bill would be statutory limits on discovery and a cost-shifting regime.

It will be interesting to see how these develop moving forward.

58 thoughts on “Patent Abuse Reduction Act of 2013 (S.1013)

  1. Let us take this day and remember the thousands who gave their lives or suffered serious injury to protect us from Saddam’s nonexistent nuclear weapons and to allow chickenhawk neocons to play a real-life game of Risk.

  2. A Memorial Day reminder that Freedom of the marketplace isn’t free, and that if left undefended by all of us, we shall soon lose the right to patent our inventions:

    First they came for the business method patents,
    and I didn’t speak out because my practice did not concern them.

    Then they came for the gene patents,
    and I didn’t speak out because I wasn’t in biotech.

    Then they came for the patent trolls,
    and I didn’t speak out because who will miss a troll?

    Then they came for my patents,
    and there was no one left to speak for me.

  3. The ACLU has some good videos up on youtube regarding this issue. Particularly, how to deal with a police officer that comes to you home and asks to come in, or a police officer that asks to search your car or person.

    A friend of mine was once arrested in Arizona for having one seed of pot in his car. The police officer vacuumed his car and said he found the seed in emptying the bag for the vacuum.

  4. NEVER TRUST A POLICE OFFICER.

    Their job is to clear the case, not to solve it. They are, in majority, power-abusing, ego-maniacal assholes with the world’s most stressful job, and government pays them to wear all that black leather. On top of that, the law does not allow them to clear your name. Ever. Anything you say to a cop – if it can possibly be construed or even twisted to incriminate you, that’s “evidence”. If it clears you, That’s “hearsay” and not admissible in court.

    It sucks, but that’s how it works.

    NEVER – EVER – TRUST A POLICE OFFICER.

  5. Now, use your brain, and imagine Lemley, Posner, Lourie, and the ghost of Stevens (soot-in-my ears of Kagan), writing an opinion on patent eligibility for information processing.

    That is where we are headed. I don’t see anything stopping that. We lose by the numbers and the fact that the pro’s tend to be decent people and the anti’s tend to amoral people and tend to either ignorant or well educated and amoral.

  6. The reason I can predict the outcome of these cases is that I understand patent law and can see right through the intellectual dishonest deluded pandering set, e.g. Posner, Lemley, Stern, and Lourie.

    Lourie was that voice in the oral arguments of the cranky old man that just knows better than anyone else that you haven’t done anything worth while. The old filth that doesn’t care about applying the law, but getting what it wants before his desiccated old brain is no longer capable of forming coherent thought (some will say that happened 10 years ago.)

    J. Lourie the destroyer of law. You see anon, I know people like this. I know there is no arguing with them. These are the same people that commit felonies and feel no sorry. They lack moral direction and yet have ended up on courts. I know when you run into someone like this that they will do what they want. Maybe the moral part of the brain has dried up and died. Hard to say why, but it is clear that they no longer care about applying the law.

  7. And, all these wiper comments disappeared after the CLS decision and my posts being less dire than Judges Moore and Rader.

    They see what is coming too. How do you fight a monster like J. Lourie or Posner? You can’t. There is no argument that will win with them and no line they will not cross to get the outcome they want.

    We live with: applied mathematics being held as a law of nature. I think most people don’t even understand Benson. Benson basically says that a method of converting BCD to binary is a law of nature and that since it can only be applied in computers that it is abstract.

  8. I hear you anon. You think I am too pessimistic. And, yet I tend to be almost always right about the outcome of these cases. Could it be that I can see a year or two down the road and you can’t?

    1) Benson is an example of outrageously ignorant findings of fact being used to remove information processing methods from eligibility;

    2) Stevens dissent in Bilski illustrates very well the world we may have soon;

    3) There are these titans of corruption and graft Lemley, Posner, Stern, that want to remove information processing;

    4) Obama is stacking the Fed. Cir. with people that are ignorant of science and patent law, or they are voraciously anti patent; and

    5) Just one more appointment by Obama and we will have the Stevens dissent being what the majority want.

    Sorry to say anon, but if anything my posts tend to downplay the dire situation we are in. And, I will add just this general zeitgeist we are in of the end justify the means being the dominant mode of thought.

  9. You see you anti-intellectual, anti-patent, dishonest, grubby pigs, concrete examples illustrate very well why you positions are wrong.

    I watched a very old clip of Noan Chomsky on the Buckley show. It was about Vietnam. Chomsky said sure I agree it makes sense to wage a war if it will stop a much greater harm. But, he said, abstract principles devoid of the concrete example are not very meaningful. He said in the case of Vietnam the facts don’t apply to the abstract concept.

    And, anti’s, your abstract principles don’t apply to the real world of innovation.

  10. Well, let’s see if an inventor wanted to spend some time figuring out how to cheaply detect small pets so this wouldn’t happen again, according to the anti’s, it wouldn’t be patent eligible.

    Now, the anti’s will say there is a motive to improve the product. OK. Sure. But, not a motive for a third party to improve the product if they have no material gain (despite the communist Posner’s remarks). And, not much of motive by the product developers if another company can just take the product of their work. (Unless the company exist due to the interest of the founders not acquiring material gain–according to the communist Posner.)

  11. Reminds me of the Jane Fonda speech (paraphrasing): If you only realized what communism means, you would get down on your knees and pray that we all would be communists.

  12. He is too enamored with his view of how brilliant he is.

    He has lost all objectivity of ‘what is’ and only sees ‘what (he feels) should be.’

  13. It actually kind of makes me wonder about Posner. He must be a communist or fascist for his proposed finding of fact not to have set off alarm bells in his head.

  14. Maybe anon, but imagine living in a world where a finding of fact has been made that your work is done with no expectation of material gain by you. That is treason.

    We see these anti’s constantly trying to use the law to kill patents. As another example, in Benson, we still live with a holding that an information processing method is a law of nature. That math is a law of nature.

  15. Treason may be a bit of the blue sky falling. Abuse of power is probably more accurate.

    He still should be removed from office for placing his viewpoint above interpreting what the law is and moving fully to what he wants the law to be.

  16. Not only more expensive (and more complicated and more gamesmanship available for infringers instead of focusing on better examination in the first place), but also far more uncertain.

    For example, Prior User Rights – basically shrouded in Trade Secrets, will only come into play for valid patent holders after running the gauntlet and obtaining a patent when that patent holder goes to enforce their right. The stick of patent law has been neutered. “Exclusive” may in fact no longer mean “exclusive.”

  17. Before any knee jerk reactions–think about it. A finding of fact that what motivates you is not material gain. Think of the wide ranging affects that would have on many aspects of our law. Your labor is done with no expectations of material gain.

    Now, think about how that is counter to our Constitutional rights.

  18. It is quite a curiosity why people have become so anti-patent. I think there are many reasons for this few of which have anything to do with a real desire for reform. I think J. Posner is a good case example. Here we have a well-known respected judge making wild findings of fact that go to a level of telling us what motivates humans. According to Posner engineers are just naturally curious and will just invent on their own. That proposed finding of fact by Posner crosses the line into a realm of treason.

    Just think about that. A finding of fact is what he wants to make that someone works for no material benefit. Apparently the engineer is a eunuch that has no family or material needs and just likes to tinker. Like Elon just created paypal for kicks. Material gain wasn’t on his mind. Not even part of it. I think a finding of fact such as Posner would like does rise to a level of treason– a violation of someone’s constitutional rights by subversive use of our legal system. If Posner makes such a finding of fact, he should be impeached by the Congress.

    What I think is that J. Posner wants desperately to be on the SCOTUS. He figures that one of the old ones will kick off soon and Obama will have to pick a replacement. He being a Republican appointment would be a good compromise. So, J. Posner sees Obama thinks there is a problem with patents and here is J. Posner to come up with some legal way to fix the problem and get himself on the SCOTUS.

    Just one case study of how people are using a perceived problem with the patent system to get what they want.

    J. Posner has turned from a respected judge to a panderer that is willing to commit acts that come close to treason.

  19. I read the Epstein Hoover article. Not much there. The big picture: the AIA just made patents more expensive and more complicated. Each time they add another tool to try and fix the system they make it more complicated and more expensive, and more likely to be gamed.

    The other big picture is that people complain about software patents, but we are the biggest innovator of software in the world. And, people copy software. In China they will just put up a site that copies another site overnight.

  20. That, however, would require judges and magistrates to know the discovery rules and actually get involved in addressing discovery abuses – not likely.

  21. The big companies don’t give their grants to people who don’t toe the line. It’s the best advocacy money can buy to pass the best laws money can buy.

  22. the answer to curing a sick patient is NOT: ki11 the patient.

    you have to figure out first whether the abuse is systemic or particularly related to patent law (hint: it’s systemic).

  23. No one who’s spent any significant time litigating patents (on either side) could seriously dispute that abusive patent litigation exists. Even the med mal and personal injury lawyers admit there is rot in their ranks.

  24. Do you want to talk about the taste of blood?

    Hal Wegner’s morning email has this ‘treasure’:

      The historic right to a trial de novo against an adverse patentability determination from the Patent Office has been a fundamental aspect of the patent system since the nineteenth century. The right to a civil action provides a check against abusive practices within the Office which has stood the test of time.

      The current statutory right to a civil action is found in 35 USC § 145. Now, as per the discussion draft of the current legislation proposed by Rep. Goodlatte and Senator Leahy, this historic right would be wiped away through ten words in Sec. 9(1): “Section 145 of title 35, United States Code, is repealed

    (emphasis added).

    It definitely appears that the ability to enforce your patent right is the “worst thing evah

  25. They would DEFINITELY oppose that. It would be possible for under-capitalized startups to get a good decision in a reasonable amount of time.

  26. ‘the bill is limited to cases where (1) the party asserting the patent is not the original inventor or original assignee; (2) the party asserting the patent is not exploiting the patent “through production or sale of an item covered by the patent” and (3) the party asserting the patent is not a University or the US Government’

    In other words, it applies to everyone except the feds and their huge multinational campaign contributors.

    Just because they call it “reform” doesn’t mean it is.

    “patent reform”…America Invents Act, vers 1.0, 2.0, 3.0…

    “This is not a patent reform bill” Senator Maria Cantwell (D-WA) complained, despite other democrats praising the overhaul. “This is a big corporation patent giveaway that tramples on the right of small inventors.”

    Senator Cantwell is right. All these bills do is legalize theft. Just because they call it “reform” doesn’t mean it is. The paid puppets of banks, huge multinationals, and China continue to brain wash and bankrupt America.

    They should have called these bills the America STOPS Inventing Act or ASIA, because that’s where they’re sending all our jobs.

    The patent bill (vers 1, 2, 3, etc) is nothing less than another monumental federal giveaway for banks, huge multinationals, and China and an off shoring job killing nightmare for America. Even the leading patent expert in China has stated the bill will help them steal our inventions. Congress passed it and Obama signed it. Who are they working for??

    Patent reform is a fraud on America. Congress and Obama are both to blame. This bill will not do what they claim it will. What it will do is help large multinational corporations maintain their monopolies by robbing and destroying their small entity and startup competitors (so it will do exactly what the large multinationals paid for) and with them the jobs they would have created. They have already damaged the US patent system so that property rights are teetering on lawlessness. This bill will only make it harder and more expensive for small firms to get and enforce their patents. Without patents we cant get funded. In this way large firms are able to play king of the hill and keep their small competitors from reaching the top as they have. Yet small entities create the lion’s share of new jobs. According to recent studies by the Kauffman Foundation and economists at the U.S. Census Bureau, “startups aren’t everything when it comes to job growth. They’re the only thing.” This bill is a wholesale destroyer of US jobs. Those wishing to help fight this bill should contact us as below.

    Small entities and inventors have been given far too little voice on this bill when one considers that they rely far more heavily on the patent system than do large firms who can control their markets by their size alone. The smaller the firm, the more they rely on patents -especially startups and individual inventors. Congress and Obama tinkering with patent law while gagging inventors is like a surgeon operating before examining the patient.

    Those wishing to help fight big business giveaways and set America on a course for sustainable prosperity, not large corporation lobbied poverty, should contact us as below and join the fight as we are building a network of inventors and other stakeholders to lobby Congress to restore property rights for all patent owners -large and small.

    Please see link to truereform.piausa.org for a different/opposing view on patent reform.
    link to facebook.com
    link to piausa.wordpress.com
    link to washingtonexaminer.com
    link to hoover.org

  27. Hmmm, Big Corp on the Right and anti-property ‘intellectual’ university types on the Left – both attacking the patent system.

    I seem to recall this thought being posted some time together by a very sage individual (and begin agreed to by a certain renowned doctor who also runs a patent blog and whose first name begins with Kevin and his last name ends with Noonan.

    Let’s check the archives to see who made this insightful point so long ago…

  28. Maybe you can get one of the academics who love to write about patents to help you.

    (good luck with that)

  29. Agree.

    I also think that we need to do a better job of educating people about the “PR games” that big companies are playing to try to justify stacking the deck against entrepreneurs.

  30. M, I recommend you see the movie Lincoln. There he was battling weasels in his own party, and a hostile Democrat party, both who wanted to end the war just as victory was nigh.

    Sounds familiar, very.

  31. Yes.

    Focus the issues, limit time, simplify trial.

    The infringer bar hates it because they want to delay and pile up costs on the patent owner.

  32. Of course, what we really need (but are never going to get) is a CARA:

    Congressional Abuse Reduction Act of 2013.

  33. Why limit these fee shifting bills to patent suits? I say go after the slip and fall crowd as well.

  34. BTW guys in case you didn’t hear:

    link to gizmodo.com

    Stem cells cured blindness for this man.

    There is a rumor going around that his first words after being cured were: I’d like to thank G.W. Bush for slowing down the developement process!

  35. Ken, the Shield Act is a fraud on the American People. Anyone who backs it needs to be ostracized, and preferably, expelled from respectable organizations like the AIPLA.

    But, given the lay of the land, I think the parties expelled will be champions of the truth.

  36. Yeah. And the AIPLA gives that organization some credibility by being a member. The AIPLA’s membership is like MIT honoring Lemelson. A mistake.

  37. Perhaps we ought to limit automatic attorneys fees to cases where the sexually abused prevails. That would include, I think, a lot of Al Gore’s masseuses who mistakenly thought the good VP was on the up and up.

  38. I am not so sure I completely understand this too. For example, what is the functionality of a claim element that has no functional relationship to the other claims elements.

    I give you a list of parts.

    Part A.

    Part B.

    Part C.

    Now, what is the functionality of C?

  39. Ken, the big boys have a taste for blood in their mouths after crushing Silicon Valley with the AIA (both Boxer and Feinstein opposed FTF, and they have my grateful vote.) Now we have more of the same from these harmonizers.

    Who brings new products and technology to the world? Startups. But they are the targets of the entrenched, not the Lemelson’s of the world who MIT honors to its dishonor. Startups can cause real damage either by replacing the entrenched products with new, think Google Android, or by interfering with the big boys adoption the of startup’s innovations. Think i4i.

    It is amazing to me that a leading advocate against Silicon Valley is that good professor who haunts Santa Clara U. She never saw a startup that she liked. Her interest are aligned 100% with the adjudged monopolists and would-be adjudge monopolists.

  40. More malarkey about alleged “patent abuse” from Congress that has the large paw prints of the so-called Coalition of Patent Fairness all over it. Money speaks in our Nation’s capital and the large multinational computer hardware and software houses have spoken again.

  41. What we really need is

    a set of time limits on patent cases, e.g., 3 months from service to a claim construction hearing; discovery on validity and infringement to begin after the claim construct order is “final”; time limits on discovery, e.g., 6 months; time limits on interlocutory motions like summary judgment and the like; trial by witness statements with cross; and a separate trial on damages, if necessary.

    The above may require a specialist patent court. I daresay, the infringer bar will oppose all this.

  42. “In addition, the bill would require a complaint to include “detailed specificity” as to “how the terms in each asserted claim[s] … correspond to the functionality of the accused instrumentality.”

    Huh? What if the claims specify physical hardware. Why would functionality enter into it?

    What if its a method claim and there is no “instrumentality”?

  43. children, it’s about time to learn the difference between facts and spin

    Thanks, Humpty. Are you going to tell the children about how mailroom staff can be used to screen prior art sent to attorneys using registered mail?

  44. *Also, the “original assignee” aspect of the SHIELD act doesn’t necessarily help, since it’s not clear that it applies to a case where a person starts his company and assigns the patent to it *after* applying for the patent in his own name (i.e., it seems to require that the person *already* be an employee of the company at the time of invention/application – yet another stacking of the deck toward mature companies). And it also may hamstring them for matters of entity changes, joint ventures, etc.

  45. At least this one is balanced about the fee-shifting.

    The SHIELD act seems to in effect define all start-ups as patent trolls (if they’re still raising the funds to be able to make and sell the invention…), and then they alone are given the consequence of having their patent be in effect unenforceable (since they’re not likely to be able to afford the bond requirement). Neither of those will be such a problem for large companies – so it’s essentially a veiled effort to crush entrepreneurs.

    This still presents some of those problems, which I hope get worked out if it goes anywhere, but at least *this* one appears to be proposed in good faith.

  46. They’re already charged with responsibility for the FRCP, per the Rules Enabling Act. This apparently would simply tell them to specifically look at Form 18. Sounds good to me – it’s inconsistent with the more stringent pleading requirements in other types of cases.

  47. “If it exists”

    translation: If enough noise can be made to make it appear that it exists. You know, like enforcing a patent (which may require litigation) is the “worst thing evah

    (children, it’s about time to learn the difference between facts and spin)

  48. “The Bill would also require the Supreme Court to review model complaint Form 18 to ensure that it conforms with the law.”

    And here I thought they didn’t issue advisory opinions. Or do they just do that when congress asks them to?

Comments are closed.