At Conversant, we believe patent owners should act knowledgeably, responsibly, rigorously and with integrity. Our patent licensing practices adhere to these values, and we are proud to be known for our industrious, comprehensive, fair, and detail-oriented approach. While patent stakeholders may disagree about the true scope of the litigation-abuse problem, if the public starts to believe that frivolous patent litigation and associated behavior is a major problem, then that itself is a serious problem that needs to be dealt with by all of us who are invested in maintaining and improving a healthy patent system.
To that end, we have issued an open letter to The Honorable Bob Goodlatte, Chairman of the Committee on the Judiciary for the U.S. House of Representatives, in response to the proposed bipartisan Innovation Act (H.R. 3309). We indicated to Chairman Goodlatte that we appreciate his key principle that any patent-reform legislation should focus on abusive behavior, not specific business models or companies. Conversant also agrees entirely with the other key principles in the bill, which Goodlatte recently restated during the Judiciary Committee’s October 29 hearing:
The Innovation Act contains needed reforms . . . , while keeping in mind several key principles, including targeting abusive behavior rather than specific entities, preserving valid patent enforcement tools, preserving patent property rights, promoting invention by independents and small businesses, and strengthening the overall patent system.
Consistent with these principles and our own practices, there are provisions in the bill that Conversant is prepared to support. For example, we can support a bill that includes provisions for heightened pleading standards, because a patentee should be prepared to document evidence of use of its patents. We support greater transparency concerning the real parties in interest to litigation, because a patent’s true, direct ownership should always be disclosed. And we welcome the consideration of balanced fee shifting in patent cases to encourage parties – both plaintiffs and defendants – to pursue only meritorious claims, because both parties should act ethically and responsibly, and obstructionist, irresponsible, or unreasonable behavior by either party should have consequences for that party. But those provisions should be crafted in such a way that preserves an independent judiciary and are not overly burdensome to all patent owners.
On the other hand, there are other provisions that we ask be reconsidered as they exist in the bill. For example, reducing the cost and increasing the efficiency of patent litigation is a laudable goal for all stakeholders, but we are concerned that the bill’s provisions to always stay certain discovery pending claim construction and to direct specific case-management procedures would encroach on an independent judiciary and lead to unjust results in many cases. In practice, these provisions, as well as the broad mandatory “covered customer” stay provision and the proposed expansion of the covered-business-method program, each could make patent litigation more protracted, expensive, and burdensome regardless of the patentee’s identity and business model.
What are your opinions of Chairman Goodlatte’s proposed bill? Share them in the comments below.