The Innovation Act, a bill in the U.S. House that aims to reform patent litigation in the United States, has gotten a lot of bipartisan support, but has faced some fired-up opposition recently in public-policy circles. We at R Street still hope to see a strong version of the bill pass. To help you follow along, here are some legislative buzzwords for tomorrow’s “markup ” of the legislation.
The MARKUP (a kind of committee hearing) will center on House Judiciary Chairman Bob Goodlatte’s “‘MANAGER’S AMENDMENT ,” more formally known as an “AMENDMENT IN THE NATURE OF A SUBSTITUTE .” You can find the text of Chairman Goodlatte’s latest version of the Innovation Act here .
Among the other buzzwords you may hear:
CUSTOMER STAY — Whether a downstream customer who uses a patent-infringing product should be held liable for infringement. That’s been limited quite a bit in the manager’s amendment.
FEE SHIFTING — Whether attorney fees can be awarded to the party that wins the patent-infringement case. In the United States, fee shifting is the exception rather than the rule. Most people have to pay out of pocket for their own lawyers.
MARKMAN HEARING — A process in which the presiding judge focuses on and decides how to understand the patent claim or claims. Based on the 1996 Supreme Court decision in Markman v. Westview Instruments Inc .
MOTION TO DISMISS — A legal motion in which the defendant argues that, based on Markman hearing conclusions or other reasons, the plaintiff has no winnable legal claim  under the law. [See MARKMAN HEARING, above]
PATENT TROLLS — Entities that hold patent rights primarily to use them advantageously in litigation .
STAY OF DISCOVERY — Sometimes known as “Stay of Discovery Pending Decision in Certain Initial Motions,” a stay of discovery means a stage in the case at which point opposing parties can’t impose expensive requirements on each other to produce evidence. In the Senate’s counterpart legislation, the PATENT Act, such stays may be granted in connection with motions about venue, motions to dismiss the case entirely and motions to sever (remove) accused infringers from the case. The version of the Innovation Act set for markup tomorrow provides for stays of discovery for venue issues, but this is offered as a replacement for stays of discovery under current patent-law options, such as Markman hearings and motions to dismiss. [See MARKMAN HEARING, MOTION TO DISMISS, above]
VENUE — The place where a patent-infringement case is conducted. There’s a widespread perception that a few jurisdictions, notably the Eastern District of Texas, are too plaintiff-friendly, which means too friendly to patent trolls. [See PATENT TROLLS, above.]
We’re watching this markup closely at R Street. We hope the final version of the Innovation Act achieves meaningful reform of venue provisions and preserves stays of discovery on more substantive matters that would decide the infringement case on the merits. Such turning points in a case could be the result of Markman hearings or motions to dismiss. The fact that the discovery process can be hugely expensive for all parties, but particularly for less economically well-off inventors and businesses, means that stays of discovery can be hugely useful in containing the costs of patent litigation.
- “markup”: https://en.wikipedia.org/wiki/Markup_%28legislation%29
- “‘MANAGER’S AMENDMENT”: https://books.google.com/books?id=ZTYcQ2SHSLoC&pg=PA65&lpg=PA65&dq=manager%27s+amendment+markup&source=bl&ots=gLjW1pvbhI&sig=dhX07pHKUegGd-BUB2x9orSNQ84&hl=en&sa=X&ved=0CDMQ6AEwA2oVChMIifbm0_aFxgIVwmOMCh3bOgAS#v=onepage&q=manager%27s%20amendment%20markup&f=false
- “AMENDMENT IN THE NATURE OF A SUBSTITUTE”: https://books.google.com/books?id=ZTYcQ2SHSLoC&pg=PA66&dq=manager%27s+amendment+markup+nature+of+a+substitute&hl=en&sa=X&ved=0CB4Q6AEwAGoVChMIlY_anviFxgIVyBysCh3iIgCK#v=onepage&q=manager%27s%20amendment%20markup%20nature%20of%20a%20substitute&f=false
- “here”: http://judiciary.house.gov/_cache/files/4723a430-8a79-4569-b3c8-68e7d828e2a3/goodla-028-xml---managers-substitute---june-9-2015.pdf.
- “Markman v. Westview Instruments Inc”: https://en.wikipedia.org/wiki/Markman_v._Westview_Instruments,_Inc
- “winnable legal claim”: https://en.wikipedia.org/wiki/Motion_in_United_States_law#Motion_to_dismiss
- “advantageously in litigation”: https://en.wikipedia.org/wiki/Patent_troll