Proposed Legislation Aims to Make Patent Owners "STRONGER"

By Yasser M. El-Gamal, Partner, Intellectual Property | Ehab Samuel, Counsel, Intellectual Property

Why it matters: In late June 2017, proposed legislation titled the “STRONGER Patents Act of 2017” was introduced in the Senate with the goal of amending the existing patent laws to “protect the property rights of the inventors that grow the country’s economy.” The stated intent of the legislation is to combat, among other things, patent owners experiencing “unintended consequences” arising out of the new post-grant proceedings instituted by the Leahy-Smith America Invents Act of 2011, which the bill’s proponents argue serve to cause a chilling effect on inventors and innovation.

Detailed discussion: In late June 2017, Sen. Chris Coons (together with Sens. Tom Cotton, Dick Durbin and Mazie Hirono) introduced proposed legislation in the Senate titled the “STRONGER Patents Act of 2017” (STRONGER Act) with the goal of amending the existing patent laws to “protect the property rights of the inventors that grow the country’s economy.” The term “STRONGER” is an acronym for Support Technology and Research for Our Nation’s Growth and Economic Resilience. The stated intent of the legislation is, among other things, to combat the perceived negative—and chilling—effects on patent owners and innovators arising out of the new post-grant review system.

Notably, the proposed legislation recognizes that “unintended consequences of the comprehensive 2011 reform of patent laws are continuing to become evident, including the strategic filing of post-grant review proceedings to depress stock prices and extort settlements, the filing of repetitive petitions for inter partes and post-grant reviews that have the effect of harassing patent owners, and the unnecessary duplication of work by the district courts of the United States and the Patent Trial and Appeal Board.”

Among the proposed legislation, the STRONGER Act would change the claim construction standard currently used at the Patent Trial and Appeal Board proceedings from “broadest reasonable interpretation” to “ordinary meaning” and raise the burden of proof, in both cases to better reflect the standards used by federal district courts in patent cases. The STRONGER Act would also allow for interlocutory appeal of PTAB decisions relating to whether or not inter partes review proceedings should be instituted in the first instance (which decisions are currently not subject to review under the AIA). In addition, the STRONGER Act would limit those who can challenge a patent to parties with a business or financial connection to the patent owner in an attempt to curb so-called patent trolls (i.e., nonpracticing entities, or NPEs).

Interestingly, the STRONGER Act appears to overrule at least five Supreme Court decisions from the past 12 years on such issues as permanent injunctions, induced infringement and divided infringement. Indeed, another of the congressional “findings” at the beginning of the legislation addresses the deleterious effects on patent owners of the Supreme Court’s 2014 decisions in Octane Fitness, LLC v. Icon Health & Fitness, Inc. and Highmark Inc. v. Allcare Health Management System, Inc. that “significantly reduced the burden on an alleged infringer to recover attorney fees from the patent owner, and increased the incidence of fees shifted to the losing party.”

It remains unclear whether this proposed legislation will make any headway in Congress, particularly in view of the current political climate. We will continue to follow the STRONGER Act’s progress as it makes its way through Congress, and will provide updates on further developments.



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