Academic journal article Boston University Law Review

Patent Litigation Reform: The Courts, Congress, and the Federal Rules of Civil Procedure

Academic journal article Boston University Law Review

Patent Litigation Reform: The Courts, Congress, and the Federal Rules of Civil Procedure

Article excerpt

Introduction

Many observers believe the American patent system is in crisis.1 Complaints are often aimed at the U.S. Patent and Trademark Office ("PTO"), which, by many accounts, issues too many "bad patents,"2 that is, patents on inventions that represent only marginal improvements in the state of the art and that therefore do not warrant the exclusive rights a patent confers.3 Moreover, many patents, particularly in the information technology sector, do not clearly articulate their exclusionary scope4 and can be read very broadly.5 The availability of these broad patents has contributed to the rise of so-called patent trolls-patent owners whose primary business is not manufacturing a product or providing a service but instead collecting money from alleged infringers.6 Because patent litigation is expensive,7 it often makes more sense for a defendant to purchase a license than to fight an infringement claim. When a troll owns patents that are sufficiently broad to be asserted against hundreds or thousands of alleged infringers, asserting those patents to elicit cost-of-defense settlements can be a feasible business model.8

In the past few years, patent trolls (or, less pejoratively, non-practicing entities or NPEs) have begun to assert their patents against not only manufacturers of allegedly infringing technology but also against the businesses, organizations, and individuals who are the end users of that technology.9 For instance, rather than suing the manufacturers of allegedly infringing wireless Internet routers, patent trolls have sent demand letters to thousands of hotels and restaurants, claiming that those businesses have committed patent infringement by using wireless technology to make Internet service available to their customers.10 Another troll sued several popular podcasters, claiming to own a patent that covers, simply, the act of podcasting.11

Complaints about trolls targeting end users have renewed political interest in reforming patent law, barely three years after Congress passed the landmark America Invents Act.12 At least fourteen patent reform bills were introduced in the recently concluded 113th Congress.13 Several of those bills focused specifically on patent litigation, proposing, among other things, to impose heightened pleading requirements on plaintiffs, to limit discovery, and to create a presumption that the losing party should pay the winner's attorneys' fees.14 None of the proposals became law, mostly due to objections from trial lawyers, who opposed the defendant-friendly nature of the bills; from companies in the biotechnology and pharmaceutical industries, who, unlike companies in the information technology industry, are rarely targeted by patent trolls; and from universities, who are almost always plaintiffs in patent cases.15 Still, one of the bills passed the House of Representatives in December 2013,16 President Obama mentioned patent litigation reform in his 2014 State of the Union address,17 scholars continue to call for reform,18 and Republican https://www.techdirt.com/articles/20130206/07215421891/patent-troll-says-itpodcasting-sues-adam-carolla-howstuffworks.shtml, members of Congress have said that, with their party now holding a majority in both houses, patent reform will be on the agenda in 2015.19 As was the case in the six-year process that led to the America Invents Act, the early proposals that failed in Congress will undoubtedly inform future bills.20

With an eye toward future reform efforts, this Essay argues that legislative reform is unnecessary because the courts and the Judicial Conference of the United States are already in the process of fixing several problematic areas of patent litigation. Moreover, the changes being made by the courts and the Judicial Conference are more nuanced and sensible than the proposals Congress has considered, which would mandate defendant-friendly changes in all types of patent cases-not just the weak cases often filed by trolls. …

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