Tuesday, April 28, 2015

Among the powerful voices in Washington to weigh in against the proposed Innovation Act in recent months is the Federal Circuit Bar Association, the umbrella group for lawyers who practice law in federal courts.

In a letter to House Judiciary Committee Chairman Bob Goodlatte, Virginia Republican, the group this year said the efforts to reform patent law were “well intentioned” but no longer needed now that the courts have created their own solutions for abusive lawsuit behavior. “No need now exists,” the group wrote.

The proposed law, known as HR 9, as currently constructed is both “unnecessary and problematic,” the group’s executive director, James E. Brookshire, told Congress, citing recent Supreme Court rulings clarifying fees recovery standards, recent district court enforcement of the standards and proposed Judicial Conference Federal Rules amendments.

Mr. Brookshire argued that patent law issues where some abuses have occurred are complicated and best left to the courts to address, rather than an overarching legislative solution that can overlook the nuances of complex law.

“Abusive behavior, whether by so-called ‘patent trolls’ or anyone else, is unacceptable. It unfairly challenges America’s most successful economic engine — innovation and the patent system which supports innovation,” he wrote. “Our dedicated judicial officers best understand nuances, motives, tactics, and merits of the cases which come before them every day. The tool available to them — the justice of the given case — is not available with a legislative vehicle.”

The group noted that the Supreme Court unanimously ruled in the last few years that concerns about patent trolls and abusive lawsuits could be effectively addressed by district judges through:

•The matter of whether fee shifting will apply is at the discretion of the federal district judge overseeing the case.

•The prevailing party may establish its entitlement to fees by a standard of “a preponderance of evidence” rather than the stronger “clear and convincing evidence” previously used.

•District judges have the discretion to award fees that simply “stand out” from other cases in terms of substantive strength.

•The District judge’s decision is reviewable at the federal circuit only for abuse of discretion, not the de novo review the federal circuit previously used. Such a solution addresses all forms of abusive lawsuits, whereas the Innovation Act addresses “only one specie of complex litigation — patent cases,” the group noted.

Since the court system took matters into its own hands, the number of patent lawsuits has dropped, further indicating there is little need for Congress to intervene now that federal judges are being proactive.

“We support the Judiciary’s increased emphasis on early case management,” the lawyers group wrote. “Finally, new case filings have dropped, by one count, from 6238 in 2013 to 5036 in 2014. At the same time, the post-AIA PTAB administrative docket increased (1677 in 2014). This shows a significant process shift making HR 9’s proposed terms premature.”

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