New Anti-Patent Trolling Bill Released

from the a-good-start dept

Wed, Oct 23rd 2013 7:52pm — Mike Masnick

Earlier this year, about half a dozen different bills were introduced in Congress trying to tame the patent troll problem. Now, Rep. Bob Goodlatte has basically strung together a bunch of the different ideas from those earlier proposed bills to create The Innovation Act of 2013, which includes a bunch of ideas to limit patent trolls. It's a good bill that will definitely do plenty to stop some of the most egregious forms of patent trolling, though it doesn't go nearly far enough in terms of stopping bad patents from being issued in the first place, or allowing all kinds of companies (trolls or not) to attack other innovators. The bill is definitely a step in the right direction -- and it's impressive that Congress really did realize that patent trolling was such a problem, after pretending that it had solved all of the patent system ills a couple years ago with the America Invents Act, which was close to useless.

Among the good things in this bill: (1) in cases of really egregious behavior, the bill will allow for awarding attorneys' fees to the prevailing party. So in cases where a patent troll files a bogus lawsuit as part of the shakedown, the defendant can get attorneys' fees. That's helpful, but it will still require years of fighting and expenses to get to that point. (2) In the lawsuit, suing companies actually have to explain what was infringed and how. I know, it seems crazy that this wasn't a requirement before, but welcome to the insanity that is our patent system. (3) Limiting the discovery process. Discovery can be incredibly expensive, and trolls have leveraged that to burden innovative companies that they're suing. This bill tries to limit the power to abuse discovery, though there are always loopholes. (4) "Transparency of ownership." Basically, patent trolls won't be able to hide behind shell companies as easily as before. (5) It tries to (somewhat) limit the ability of patent trolls to go after end consumers of products (such as the troll claiming it could sue all WiFi users) or the troll going after anyone using a networked printer/scanner. All it really does here is allow the consumers to continue using the products while other stuff gets resolved if the troll has also sued the manufacturer. This means, if it's more lucrative, trolls will just avoid suing the manufacturer and go after the users. Again, this protection is not complete, but it's a step forward.

All of these are useful and positive steps, but won't stop trolling. It will, hopefully, limit the most egregious cases, but we've certainly seen that trolls can get creative in how they troll, so I imagine that, if this becomes law, we'll start to see new methods pop up quickly. That said, it's still a long way from actually passing. The fact that the bill is being introduced with a wide variety of powerful backers -- Reps. Bob Goodlatte, Pete DeFazio, Zoe Lofgren, Jason Chaffetz, Howard Coble, Anna Eshoo, Lamar Smith, Tom Marino and George Holding -- means that the bill actually has a better chance than most of actually getting to the floor and passing. But there will be others fighting against it, and a similar bill needs to get through the Senate as well, though that seems likely. If it can get through Congress, it seems like that the administration will support it, but that's not definite.

Honestly, the best thing about this is that, contrary to our expectations after the America Invents Act passed, patent trolling behavior became so egregious that Congress was actually willing to step back into this issue. That suggests that if the activity does continue, Congress will actually address it at some point. That's a good thing, and as EFF notes, we have the patent trolls to thank for that.

Innovation Act (PDF)Innovation Act (Text)

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Filed Under: bob goodlatte, discovery, fee shifting, patent reform, patent trolls, patents, shell companies

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out_of_the_blue, 23 Oct 2013 @ 8:00pm

Ever notice results always contrary to stated intent?
So I expect that even if this were passed, it'd actually result in far more and far worse.

What's really needed to stop this and other re-distribution schemes is to again tax the hell out of unearned income.
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That One Guy (profile), 23 Oct 2013 @ 8:10pm

Re: Ever notice results always contrary to stated intent?
Define, 'unearned income'.

Do that and then a discussion can take place, because without a solid definition that both sides are aware of, any discussion is meaningless at best.
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Anonymous Anonymous Coward, 23 Oct 2013 @ 8:10pm

Challenge Clause
I agree, there should be some clause to allow the easy challenge of an existing patent, say:

Allow anyone to challenge existing patents, with evidence, for prior art or other relevant challenges for '$0.00' and with complete anonymity. Existence of evidence for challenge supersedes any standing challenges. Submit documents to 'fixbadpatents.gov' via TOR and a VPN.

That would go a long way to cleaning up the system, and the initial flood will only last so long, as many patents are so easily debunked.

Of course, for my mind, eliminating IP in almost all its forms would be a great thing for the economy, at least right after all the rights holders get over their conniptions.
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That One Guy (profile), 23 Oct 2013 @ 8:36pm

Maybe it's my cynical nature popping up but, if the 'rough draft' is this weak, the final draft, assuming it makes it through the absolute storm of objections and 'suggestions' the parasites are sure to throw up, is likely to be another useless bit of window dressing, that sounds good but doesn't actually do anything.

The problems I can see:

A) For #1, unless there is specific wording defining just what behavior is enough to qualify a defendant for attorney's fees, this seems far too weak, and would depend on a judge not buying the 'honest, we were sure they were violating our patent your honor' any parasites on the losing side of a case would pull.

Also, it should very much include language that makes awarding attorney's fees possible even if the case never fully develops, to deal the the parasites suing, jacking up the fees through discovery and whatnot, and then dropping it when it becomes clear the other side is willing to fight back.

B) For #2, like you said, the fact that that even needs to be mentioned is insane, it should be completely impossible already to file, or even threaten to file, a lawsuit without clearly and exactly explaining what is being sued over, and the fact that this even needs to be added makes it abundantly clear how screwed up the system is. Hopefully this part at least makes it through intact.

C) The wording on #4 needs to be tightened up, extremely, so that it's impossible to sue over a patent without showing exactly who owns the patent. Not who's licensing it to sue over, not who it's been temporarily assigned to, but the core owner.

D) And finally #5, that one needs a complete overhaul. If a product is found in violation of a patent, or even claimed to be in violation, the only one who should be able to be sued is the company who produced it.

The customers should be incapable of being held accountable for the seller's products, as they'd have no way of knowing what's violating a patent, and in any case they didn't create the item, just purchased it.

Now that out of the way, I hope the bill makes it through, without being weakened too much, but I worry that if it does, the congresscritters and senators will assume that's it, that's all they need to do, until a few years down the road when they try and add another minor patch to the system, rather than overhaul it as it needs.
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Anonymous Coward, 23 Oct 2013 @ 8:50pm

Re: Re: Ever notice results always contrary to stated intent?
actually this already sort of has a definition.

Unearned REVENUE is money received without a service or anything being provided. This is a liability, but is still taxable.

Of course, blue is conflating price and value in his argument and hes just waiting for someone to agree so he can use that to fuel his arguments.

Not that his argument fails, since a redistribution scheme doesn't necessarily earn money. No revenuesearned = no income = no taxes to pay.
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John Nagle (profile), 23 Oct 2013 @ 10:20pm

This is an anti-inventor bill
This is a bill that makes it very risky to be an independent inventor. It imposes a "loser pays" system on patent lawsuits, something no other kind of US lawsuit has. Now you can end up paying the big company's attorney fees if you lose, which happens about half the time even if you have a good case. That's bankruptcy for most inventors. Invent something, lose your house.

The last proposed bill in this area, the "SHIELD act", exempted original inventors, inventors who practiced the invention, and universities from "loser pays". This one doesn't.

Look at who's behind this. Bob Goodlatte, the right-wing Congressman from Roanoke, VA. The American Association of Advertising Agencies, because some tricks in online advertising are patented. It's not coming out of Silicon Valley.
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arleenzank (profile), 24 Oct 2013 @ 2:38am

Patent Troll Likes It Too
Acacia Research, owner of 275 patent portfolios it uses to assist the "patent-disenfranchised" in enforcing their patent rights (trolling) talked about this bill at their Q3 conference call October 18th.

Rep. Goodlatte must be on to something because Acacia Research talked about the bill positively as well. Their goal was to cut out the unscrupulous stick up patent trolls.

Now it's getting interesting.
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Anonymous, 24 Oct 2013 @ 3:55am

Did I Just Read What I Think I Read?
Lamar Smith - the author of SOPA - is supporting this bill? That man should have a restraining order against him to keep him away from anything IP-related.
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Anonymous Coward, 24 Oct 2013 @ 4:47am

Patents are great for two things.

1. Using them to sue people for income.

2. Companies with products they're scared someone else can or would do better.
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Anonymous Coward, 24 Oct 2013 @ 5:24am

End result of many bills is the opposite of what their name and PR antics imply. This is an intentional attempt to garner support for that which you, if fully informed, would not want.

Rather than construct complex bandages out of baling wire and duck tape, why not simply amputate the gangrene and get on with it.
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That One Guy (profile), 24 Oct 2013 @ 5:41am

Re: Re: Re: Ever notice results always contrary to stated intent?
That may be your definition, but blue has on multiple occasions claimed that services like iTunes and other sites that sell music/movies aren't actually providing any service at all, hence it's quite obviously not what blue considers the term to mean.
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Anonymous Coward, 24 Oct 2013 @ 5:53am

Pool old Reps
They try so hard to be relevant, but the harder they try to less popular they become. But once you've dug yourself into such a deep hole, your only option really is to either keep diggings or "dig up stupid".

What also funny, is you think they will be able to get anything through congress or the senate. They cant even agree with policy amongst themselves.
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Anonymous Coward, 24 Oct 2013 @ 5:57am

Re: Ever notice results always contrary to stated intent?
why was this tagged ?? let me guess your censoring the person, even if he is making real sense!!!

At least you make it easy to see what posts are worth reading, the censored ones !!!
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Anonymous Coward, 24 Oct 2013 @ 6:00am

Re: Re: Ever notice results always contrary to stated intent?
I am sure "unearned income" would have a specific and details definition that is also the legal (and binding) definition.

You only find the redefining of words at places like right here at TechDirt.

Generally most other (normal) people know the definition of words, and don't need to re-define them to suit their own slant on reality.
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terry, 24 Oct 2013 @ 6:00am

'just' filter out the undeserving patent claims
The patent troll problem is really only enabled by the patent office (PTO) falling down on its job of filtering out undeserving patent claims after giving them proper and judicious assessment.

So the PTO doesn't see its job that way, and talks of the 'productivity' of issuing patents?

There you have a big part of the problem, with patents that never should have been granted at all. Many of those patent claims are just wider in breadth than anything new for which the (nominal) inventor has made a practically useful contribution. That's how the patents undeservingly get to cover trivialities, enabling patent trolls to oppress honest businesses. It used to be well recognized as the job of the PTO to filter out patent claims of this kind before they were ever granted. The PTO needs to focus on properly training its examiners (and the examiners' bosses), give them enough time to do their jobs properly, and measure their performance on the quality of their assessments, not on the numbers game.

Easier said than done, though, to reach that state. There's a zillion excuses that both government and private lobby groups will use, to point attention to just anything else rather than make sure that undeserving patents are properly filtered out and aren't granted.
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Anonymous Coward, 24 Oct 2013 @ 6:03am

Re: Re: Ever notice results always contrary to stated intent?
"According to certain conceptions of the Labor Theory of Value, it may refer to all income that is not a direct result of labor. "

"Unearned income is a term in economics that has different meanings and implications depending on the theoretical frame. To classical economists, with their emphasis on dynamic competition, income not subject to competition are �rents� or unearned income, such as incomes attributable to monopolization or land ownership."

"As defined by the social security administration in the U.S., unearned income is all income that is not earned from your job or from your business. Some common types of unearned income are:[1]"
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That One Guy (profile), 24 Oct 2013 @ 6:06am

Re: Re: Ever notice results always contrary to stated intent?
It's called 'consequences of past actions and reputation', if someone acts like a child enough eventually people won't even be willing to give any of their posts a chance before hitting report, as they simply assume it will be more of the same.
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That One Guy (profile), 24 Oct 2013 @ 6:08am

Re: Re: Re: Ever notice results always contrary to stated intent?
Brilliant, your own example points out that there are several definitions it could be, which just reinforces why I wanted blue to give me the one he/she was using, to form a basis for any future discussions on the subject.
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That One Guy (profile), 24 Oct 2013 @ 6:17am

Re: 'just' filter out the undeserving patent claims
While I agree that that's certainly a big part of the problem, I'd say a larger part, and one that doesn't only deal with patents, is how insanely expensive court costs can be, making it very much a system where the one who has the most money, not necessarily the one who's actually right, will win most of the time.

This makes for a system where a patent troll can, even with a clearly bogus patent, shake down smaller companies, as the costs to fight would destroy them, while paying out, despite being distasteful in the extreme, at least allows them to continue to remain in business.

Solve that problem, and you'd bring a world of hurt to these parasites, as well as making the legal field more even, as it should be.
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Anonymous Coward, 24 Oct 2013 @ 6:33am

can someone explain
paragraph 6 sub 3? To me it looks like the ability to charge pretty much anyone
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That One Guy (profile), 24 Oct 2013 @ 6:43am

Re: can someone explain
I believe 6(C) is talking about the customers of a company, the ones who are using a product that is claimed to be infringing, though given it's in legalese, I'm not sure.
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limbodog (profile), 24 Oct 2013 @ 7:37am

Question for the room....
Why do we call these guys "Patent Trolls" but nobody uses the term "Copyright Trolls" for abusing copyright as a form of censorship or to stifle legal competition?
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Alien Rebel (profile), 24 Oct 2013 @ 8:34am

Digging Required
As Reps. Goodlatte and Coble are consistent supporters of the Copyright Alliance, a.k.a. Nickles Group lobbyists representing Intellectual Ventures LLC at their real day jobs, I'm thinking there's stuff under the surface that needs careful examination.
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Mike Masnick (profile), 24 Oct 2013 @ 10:17am

Re: Digging Required
Fwiw, even the reps who are awful on copyright can be good on patent stuff...
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Alien Rebel (profile), 24 Oct 2013 @ 10:59am

Re: Re: Digging Required
It's possible that Rep. Goodlatte is really willing to harm Nickles' #1 client. It is after all a matter of that crazy dance politicians do with a multitude of competing interests.
I'm starting to suspect politicians are not entirely consistent across the board in whom they support.
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Anonymous Coward, 24 Oct 2013 @ 4:28pm

Re: Re: Ever notice results always contrary to stated intent?
No, she is not making real sense. Her comment is without merit, and her ideas are appalling. 'Unearned Income' is any income that is not earned through investments or employment. Of course, investments is a loose enough term, but you need to stop and think about this. Social Security Disability? Unearned income. Cash Assistance? Unearned income. Basically, you'd be punishing the poor and disabled for being poor and disabled. So, this isn't the term she wanted, but she's going to push it as if it means what she thinks it means.
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