In December of 2013, a bill intended to reform the patent process in the United States passed overwhelmingly in the bipartisan House by a vote of 395 to 95, only to fail in the Democratic-lead Senate 5 months later. The Innovation Act, as it was referred, would have reformed the current patent industry, reshaping the way inventors were able to protect their original designs and ideas.
The legislation was created to address the influx of “patent trolls,” companies who do not sell or provide any services, and instead make money from threatening other companies with patent lawsuits stemming from vaguely-worded patents. Although Congress passed the America Invents Act in 2011 (AIA), this bill was intended as a technical change which transformed the patent filing process from a “first to invent” to a “first to file” rule. It did nothing to address poorly-written patents or vague filings, and lead to the rapid inflation of patent-driven litigation.
Future Legislation Worries
With the 2014 installation of a Republican-led Senate, it is likely that Congress will see a renewed version of the Innovation Act in the upcoming sessions. One of the most prominent (and controversial) feature in the previous bill was the clause which addressed attorney-fee shifting. This allowed attorney’s fees to be awarded by a district court to the winning party if it was found that the patent claims were not “substantially justified.” The controversy is partially due to the concern over Non-Practicing Entity (NPE) litigation, and what affect this clause may have had on current and future NPE cases.
The clause also places small-businesses and individual inventors at a serious disadvantage when it comes to patent litigation, should their claims be determined to be false. The potential for significant penalties (in the form of being required to pay the defendants attorney’s fees) may mean that patent litigation is out of reach due to the massive risks involved. If the court finds that an individual inventor’s claims are frivolous or not “substantially justified,” they could face a disastrous financial penalty. This clause has the potential to cause huge legal disparities for the individual inventor, who may not have the same access to resources as the big industry giants do. This could lead to the legislation causing more harm to the same inventors it was designed to protect.
The Impact on Individual Inventors
For many small-businesses and the individual inventor, hiring a patent attorney can already come at a serious financial cost. Patent litigations can often cost companies hundreds of thousands, if not millions of dollars, once everything is said and done. For an inventor creating out of his home office or garage, the patenting process requires a significant investment of time and funds. Using an attorney to draft a patent can cost an average of $5000 for each patent. This does not include the cost of a patent search, or other various legal “red-tape.”
With the possibility of new legislation dictating patent reform, small-businesses and sole proprietors must know how to protect their ideas and products by filing the proper paperwork in order to avoid future litigation. There are lower cost routes available for patent filing which better suit the needs of an individual inventor. Inventors looking to protect themselves and their ideas, should seek more information on filing a patent and consider contacting a product design business to assist them in streamlining the process.