Congressman Peter Defazio recently introduced H.R. 6245. The working title of the bill is the “Saving High-Tech Innovators from Egregious Legal Disputes Act of 2012” also known as SHIELD. The Bill would permit the award of attorney fees to successful defendants accused of infringing a computer hardware or software patent if the action “did not have a reasonable likelihood of succeeding.” Currently attorney fees are only awarded in “exceptional cases” under 35 U.S.C. 285 or as a sanction for violation of Fed. R. Civ. Pro. R. 11.
The statute would read:
(a) In General- Notwithstanding section 285, in an action disputing the validity or alleging the infringement of a computer hardware or software patent, upon making a determination that the party alleging the infringement of the patent did not have a reasonable likelihood of succeeding, the court may award the recovery of full costs to the prevailing party, including reasonable attorney’s fees, other than the United States.
The computer hardware and software would both be broadly defined by the new statutory provision.
Most jurisdictions around the world follow a loser-pays rule in civil litigation. In theory (and with certain assumptions) a loser pays rule results in more meritorious claims and fewer non-meritorious claims. The system (again in theory) allows a legally vindicated party to walk away without direct financial loss due to the litigation. A major difference between those systems and that proposed here is that the normal loser-pays system is two-way while this bill proposes a one-way system that only injures patentees. The stated purpose of the bill is to reduce the amount of patent litigation brought by “patent trolls.” For several reasons, I think that it is unclear whether the bill would achieve that result in any respect.