LEGISLATIVE
RECOMMENDATIONS
In that
spirit, the Administration recommends that Congress pursue at least seven
legislative measures that would have immediate effect on some major problems
innovators face. These measures would:
- Require
patentees and applicants to disclose the “Real Party-in-Interest,” by requiring that any party
sending demand letters, filing an infringement suit or seeking PTO review
of a patent to file updated ownership information, and enabling the PTO or
district courts to impose sanctions for non-compliance.
- Permit
more discretion in awarding fees to prevailing parties in patent cases, providing district courts with more
discretion to award attorney’s fees under 35 USC 285 as a sanction for
abusive court filings (similar to the legal standard that applies in
copyright infringement cases).
- Expand
the PTO’s transitional program for covered business method patents to include a broader category of
computer-enabled patents and permit a wider range of challengers to
petition for review of issued patents before the Patent Trial and Appeals
Board (PTAB).
- Protect
off-the-shelf use by consumers and businesses by providing them with better legal
protection against liability for a product being used off-the-shelf and
solely for its intended use. Also, stay judicial proceedings against
such consumers when an infringement suit has also been brought against a
vendor, retailer, or manufacturer.
- Change
the ITC standard for obtaining an injunction to better align it with the traditional
four-factor test in eBay Inc. v. MercExchange, to enhance
consistency in the standards applied at the ITC and district courts.
- Use
demand letter transparency to help curb abusive suits, incentivizing public filing of demand
letters in a way that makes them accessible and searchable to the public.
- Ensure
the ITC has adequate flexibility in hiring qualified Administrative Law Judges.
EXECUTIVE
ACTIONS
Today the
Administration is also announcing a number of steps it is taking to help bring
about greater transparency to the patent system and level the playing field for
innovators. Those steps include:
- Making
“Real Party-in-Interest” the New Default. Patent trolls often set up shell companies to
hide their activities and enable their abusive litigation and extraction
of settlements. This tactic prevents those facing litigation from
knowing the full extent of the patents that their adversaries hold when
negotiating settlements, or even knowing connections between multiple
trolls. Today, the PTO will begin a rulemaking process to require
patent applicants and owners to regularly update ownership information
when they are involved in proceedings before the PTO, specifically
designating the “ultimate parent entity” in control of the patent or
application.
- Tightening
Functional Claiming. The AIA made important improvements to the examination process and
overall patent quality, but stakeholders remain concerned about patents
with overly broad claims — particularly in the context of software.
The PTO will provide new targeted training to its examiners on scrutiny of
functional claims and will, over the next six months develop strategies to
improve claim clarity, such as by use of glossaries in patent
specifications to assist examiners in the software field.
- Empowering
Downstream Users. Patent trolls are increasingly targeting Main Street retailers,
consumers and other end-users of products containing patented technology —
for instance, for using point-of-sale software or a particular business
method. End-users should not be subject to lawsuits for simply using
a product as intended, and need an easier way to know their rights before
entering into costly litigation or settlement. Today, the PTO is
announcing new education and outreach materials, including an accessible,
plain-English web site offering answers to common questions by those
facing demands from a possible troll.
- Expanding
Dedicated Outreach and Study. Challenges to U.S. innovation using tools
available in the patent space are particularly dynamic, and require both
dedicated attention and meaningful data. Engagement with
stakeholders — including patent holders, research institutions, consumer
advocates, public interest groups, and the general public — is also an important
part of our work moving forward. Roundtables and workshops that the
PTO, DOJ, and FTC have held in 2012 have offered invaluable input to this
process. Today, we are announcing an expansion of our outreach
efforts, including six months of high-profile events across the country to
develop new ideas and consensus around updates to patent policies and
laws. We are also announcing an expansion of the PTO Edison Scholars
Program, which will bring distinguished academic experts to the PTO to develop
— and make available to the public — more robust data and research on the
issues bearing on abusive litigation.
- Strengthen
Enforcement Process of Exclusion Orders. Once the U.S. International Trade Commission
(ITC) finds a violation of Section 337 and issues an exclusion order
barring the importation of infringing goods, Customs and Border Protection
(CBP) and the ITC are responsible for determining whether imported
articles fall within the scope of the exclusion order. Implementing these
orders present unique challenges given these shared responsibilities and
the complexity of making this determination, particularly in cases in
which a technologically sophisticated product such as a smartphone has
been successfully redesigned to not fall within the scope of the exclusion
order. To address this concern, the U.S. Intellectual Property Enforcement
Coordinator will launch an interagency review of existing procedures that
CBP and the ITC use to evaluate the scope of exclusion orders and work to
ensure the process and standards utilized during exclusion order
enforcement activities are transparent, effective, and efficient.
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