On April 3, 2018, Representatives Steve Stivers and Bill Foster introduced H.R. 5340, entitled Support Technology and Research for Our Nation’s Growth and Economic Resilience (STRONGER) Patents Act implementation. This legislation parallels legislation introduced by Senators Chris Coons and Tom Cotton last year. This bill was introduced because its sponsors believe that the U.S. has driven innovation away with issues that particularly relate to the America Invents Act (AIA).
The bill has the following portions in Section 102:
Section A – Requires the Patent Trial and Appeal Board (PTAB) to use the same standard as District Courts when deciding what inventions the patent covers – claim construction. Currently, the PTAB uses the broadest reasonable interpretation standard and does not consider all of the evidence of a valid patent claim.
Section B – Requires the PTAB to use the same burden of proof – clear and convincing evidence – that is used by District Courts. Right now, the PTAB uses the preponderance of the evidence standard.
Section C – Ensures that a petitioner has a business or financial reason to bring the case before the PTAB. This is in direct response to the stockholder suits that have been brought in the PTAB against certain companies.
Section D – Authorizes the United States Patent and Trademark Office (USPTO) Director to bring only one attack per claim of a patent. Currently, patent owners face repetitive challenges, thereby increasing the cost of patent litigation and the timing needed to obtain decisions.
Section E – This section provides for immediate appeals in defined circumstances to address errors and allow appellate court guidance on IPR or PGR proceedings. This is another attempt to cut down on the timing and cost that patent owners face when involved in these proceedings.
Section F – As with Section D, this new provision is being provided to reduce repetitive attacks on patents by requiring a challenger to bring its challenge to all parts of the patent it intends to attack in the first petition rather than through serial petitions. Should the patent owner subsequently assert later challenges, there is an exemption to this provision.
Section G – This section clarifies that a challenger is a real party in interest to a patent that includes an entity making financial contributions to the challenge. Furthermore, discovery is allowed in this situation to make sure that shell companies or subcontracting legal challengers are not involved.
Section H –In the event a District Court reviewed the validity of a patent prior to the PTAB, the PTAB proceeding should not start or should be paused pending appeal.
Additionally, the following sections also form part of the STRONGER Patents Act proposed legislation:
Section 105 – Imposes a one-year limitation for an entity that has been sued for infringement to bring a reexamination request – like IPRs.
Section 106 – Restores the use of injunctive relief for patents that are valid and infringed.
Section 107 – Provides for the USPTO to establish a revolving fund in the U.S. Treasury to better control its funding.
Section 108 – Certain issues of infringement are reviewed. Induced infringement only would require a showing that the alleged infringer intended to cause the acts that constitute infringement. If outsourcing is undertaken to avoid infringement in the U.S., that will no longer hold. And the single entity rule for defendants who have intentionally caused the infringement of a patent is clarified. This section clarifies that, even if multiple entities take steps to infringe a patented process, there is still infringement.
Section 109 – Clarifies that universities are micro entities under the AIA.
Section 110 – There are certain requirements to assist small businesses. In particular, the Small Business Administration is to draft two reports to report how small businesses rely on patents. There is a provision to allow more training and law clerks to aid small business defendants, and the act provides greater access to patent searching databases that are only in person searched now.
This proposed legislation has not made it out of committee, but we will follow its progress and update this blog.