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April 25, 2017 New York | Washington DC | London | Paris | Frankfurt

April 25, 2017 - friedfrank.com Frank IP Litigation Quarterly Call... · Test for determining infringement under §271(f)(1) is “quantitative” Patent Act does not define “a

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April 25, 2017

New York | Washington DC | London | Paris | Frankfurt

2

Overview of today’s program

Our quarterly round-up of significant IP decisions

A discussion of developments at the International Trade Commission

A review of potential and pending legislation impacting intellectual property rights

QUARTERLY ROUND-UP OF DECISIONS

3

Cases we will discuss today

Star Athletica LLC v. Varsity Brands, Inc. (Supreme Court)

Life Technologies v. Promega (Supreme Court)

Zenimax v. Oculus VR (Northern District of Texas jury award)

4

Star Athletica, LLC v. Varsity Brands, Inc.

Supreme Court: artistic elements (e.g., stripes) on a cheerleading outfit are eligible for

protection under the copyright law

5

Overview of Star Athletica case

Varsity Brands sued Star Athletica for infringing copyrighted designs

Star Athletica argued that the designs were not eligible for copyright protection under 17 U.S.C. §101

a “useful article, such as a piece of furniture or clothing, is ineligible for copyright protection”

But, artistic elements reproduced on a useful article can be copyrighted if they “can be identified

separately from, and are capable of existing independently of, the utilitarian aspects of the article”

The District Court held: uniform designs are not eligible for copyright protection

Artistic elements could not be separated from functional purpose: identifying the wearer as a

cheerleader

The Sixth Circuit reversed: designs on uniforms are eligible for copyright

Artistic elements can be separated from the functional purpose: “cover[ing] the body, wick[ing] away

moisture, and withstand[ing] the rigors of athletic movement”

Star Athletica asked the Supreme Court to clarify the test for what makes design elements separable

6

SCOTUS Star Athletica test

March 22, 2017: the designs are copyright eligible (6-2 opinion)

Two-part separability test:

1. Whether it is possible to “look at the useful article and spot some two- or three-dimensional element that appears

to have pictorial, graphic, or sculptural qualities”; and

2. Whether “the feature for which copyright protection is claimed would have been eligible for copyright protection as

a pictorial, graphic, or sculptural work had it originally been fixed in some tangible medium other than a useful

article”

Focus of the test is on the design features, not the underlying useful article

As such, it is not relevant that the useful article would no longer be useful or marketable without the

design element

7

Stripes on cheerleader uniforms are copyright eligible

Applying the test, the Court held that designs on a cheerleader uniform may be copyrighted

8

Step One: “separate identification”

“one can identify the decorations as features having pictorial,

graphic, or sculptural qualities”

“if the arrangement of colors, shapes, stripes, and chevrons on the

surface of the cheerleading uniforms were separated from the

uniform and applied in another medium – for example, on a

painter’s canvas – they would qualify as ‘two-dimensional . . .

works of . . . art’”

Step Two: “independent existence”

Dissent: designs are not separable from the uniforms

9

Varsity’s designs cannot be identified separately or exist independently because a picture

of the designs is a picture of the uniforms themselves, like Van Gogh’s picture of shoes

“Varsity cannot obtain copyright

protection that would give them the

power to prevent others from making

those useful uniforms, any more than

Van Gogh can copyright comfortable old

shoes by painting their likeness”

Life Technologies v. Promega

Supreme Court: a company is not liable for infringement under §271(f)(1) when it exports

a single component from the United States that is later incorporated into a patented

invention in a foreign country and sold abroad

10

Life Technologies v. Promega

Section 271(f)(1) of the Patent Act

11

Whoever without authority supplies or causes to be supplied in or

from the United States all or a substantial portion of the

components of a patented invention, where such components

are uncombined in whole or in part, in such manner as to actively

induce the combination of such components outside of the United

States in a manner that would infringe the patent if such

combination occurred within the United States, shall be liable as

an infringer.

Overview of the Life Technologies case

Promega sued Life Technologies for infringing patent on genetic testing kits; the patented invention had

five components:

1) a mixture of primers that mark the part of a DNA strand to be copied

2) nucleotides for forming replicated strands of DNA

3) an enzyme known as Taq polymerase

4) a buffer solution for the amplification of the DNA

5) control DNA

Life Technologies manufactured four of the components in the United Kingdom, assembled the testing kits

in the U.K., and sold the vast majority of the kits outside of the U.S.

One component – the Taq polymerase – was shipped to the U.K. from the United States

Promega sought worldwide royalty, arguing that testing kits sold abroad infringed under §271(f)(1)

The District Court granted Life Technologies judgment as a matter of law, finding that a single component

cannot constitute a “substantial portion” of the components of a patented invention

The Federal Circuit reversed, reasoning that “substantial” in §271(f)(1) can mean “important” or

“essential,” and that Taq polymerase is “substantial” because it is required for the invention to work

12

SCOTUS Life Technologies test

February 22, 2017: Life Technologies did not infringe Promega’s patent under §271(f)(1) (7-0 opinion)

Test for determining infringement under §271(f)(1) is “quantitative”

Patent Act does not define “a substantial portion of the components”

Ordinary meaning can be both quantitative and qualitative

Statutory context “points to a quantitative meaning”

Neighboring terms in the statute – “all” and “portion” – are quantitative

Modifying the phrase “of the components” would be unnatural if “substantial portion” were qualitative

Under the “quantitative” test, a single component can never be “a substantial portion” under

§271(f)(1); there must be multiple components to constitute “a substantial portion”

13

Open questions following Life Technologies

What is a “component”?

Should courts look at the invention itself or the claims of the patent?

If the invention, what counts as one component?

If the patent, is each limitation of the claim one component?

What if a limitation has multiple elements?

What if multiple limitations address the same element?

How much more than one component is required under the quantitative test?

What happens if a patented invention only has two components?

14

Zenimax Media Inc. v. Oculus VR, LLC (N.D. Tex)

15

N.D. Texas Jury: Oculus VR (a Facebook subsidiary), the founder of Oculus (Palmer

Luckey), and the CEO of Oculus (Brendan Iribe) must pay Zenimax Media and id Software

$500 million for the use of Zenimax/id Software IP

Overview of the Zenimax case

Early collaboration on the development of a virtual reality (VR) gaming system

John Carmack – legendary programmer and founder of id Software

Palmer Luckey – 19-year-old video game enthusiast and inventor of the “Rift” VR headset

Attempts to commercialize VR technology

Oculus VR formed; Brendan Iribe joins as CEO

Discussions about Zenimax equity stake

Kickstarter video and PowerPoint presentations to potential investors

Carmack leaves id Software to become Chief Technology Officer of Oculus

$2 billion+ Facebook acquisition of Oculus

Lawsuit and alleged spoliation of evidence

Post-lawsuit Google search: “how do you wipe a hard drive on mac osx”

16

Causes of action and jury verdict

Cause of Action Jury Award

Misappropriation of Trade Secrets

Alleged: Defendants had stolen various types of

technology from id Software related to VR systems

$0

Jury found that the defendants did not

misappropriate id Software’s trade secrets

Copyright Infringement

Alleged: Defendants infringed Zenimax copyrights

by literally and non-literally copying the software

$50M

Jury found that Oculus was liable for infringement

Breach of Contract

Alleged: Defendants violated a non-disclosure

agreement (NDA), which allowed the use of

confidential Zenimax information only for a “Proper

Purpose”

$200M

Jury found that Luckey breached the NDA, but was

relieved of liability under the doctrine of laches; but,

the jury also found that Oculus was Luckey’s

successor-in-interest and liable for damages

Lanham Act False Designation

Alleged: Defendants falsely designated the Rift as

their invention when it was built using id Software’s

intellectual property

$250M

Award included $50M against Luckey, $50M against

Oculus, and $150M against Iribe

17

Issues to watch – defendants’ post-trial briefing

False designation

Whether a Lanham Act claim of false designation applies when the producer of tangible product is correctly

identified

Whether money damages can be awarded in the absence of evidence of actual consumer confusion

Whether Zenimax was required to show economic or reputational injury proximately caused by the false

designation

Copyright infringement

Whether literal copying of seven lines of code was de minimis

Whether Oculus copied non-literal elements of Zenimax’s software

Whether Zenimax introduced evidence that $50 million was a reasonable royalty

Breach of Contract

Whether Oculus can be liable for breach when Palmer established a defense of laches

Whether the NDA is unenforceable due to the failure to define “Proper Purpose”

Whether the $200 million award is based on an actual loss Zenimax suffered as a result of the breach of the NDA

Impact of spoliation instruction and testimony

Whether the court erred in allowing testimony from a court-appointed expert that Oculus had destroyed evidence

18

Issues to watch – Zenimax’s post-trial briefing

Entitlement to prejudgment interest ($78.3 million - $89.8 million)

Trebling of false designation award to $750 million due to willfulness

Entitlement to award of attorneys’ fees ($40 million)

Availability of injunctive relief

19

DEVELOPMENTS AT THE INTERNATIONAL TRADE COMMISSION

20

Developments at the ITC

Non-practicing entities (“NPEs”) and the domestic industry requirement

Obtaining a general exclusion order (“GEO”)

21

The ITC and IP litigation

The ITC is a nonpartisan federal agency that provides trade expertise to the legislative and

executive branches and conducts investigations of unfair trade practices

Investigations are based on 19 U.S.C.§1337 – “Unfair practices in import trade”

“Statutory” unfair acts, such as importation of articles that infringe a patent, trademark, or copyright,

under §1337 (a)(1)(B)-(E)

Other unfair acts, such as importation of articles that misappropriate a trade secret, under §1337

(a)(1)(A)

Akin to a district court bench trial, with relaxed evidentiary standards

Remedies are limited to exclusion orders and cease & desist orders – no damages

An ITC Investigation may be advanced if:

there is an “article” that infringes IP;

that is imported; and

you have a “domestic industry” related to the IP

22

23

The domestic industry requirement

Two-prong analysis, based on §1337’s origin as a statute to protect U.S. industry

“Technical Prong”

Is the asserted IP used in the U.S. by

complainant?

Defined by§1337(a)(2)

“Economic Prong”

Is there U.S. investment by complainant related to the

asserted IP?

Defined by§1337(a)(3) as:

(A) significant investment in plant and equipment;

(B) significant employment of labor or capital; or

(C) substantial investment in its exploitation,

including engineering, research and development, or

licensing

24

Showing domestic industry

Typical operating company or

manufacturer with U.S. presence

“Technical prong” - met by making,

using, and/or selling a product or

process covered by one or more

claims of the asserted patent

“Economic prong” - met by showing

investments related to the making,

using, and/or selling of the product or

process, such as investments in

plants, equipment, labor, HQ, etc.

NPE

Generally has no substantial plant,

equipment, labor, or capital

investments in the U.S.

Thus, it must show its own

“substantial investment in the

exploitation of the patent-in-suit,

including engineering, research, or

licensing” (Category C)

OR, an NPE can cite to plant,

equipment, labor, or capital

investments in the U.S. by its

licensee(s) (Category A, B)

An inability to show domestic

industry has traditionally limited an

NPE’s ability to bring ITC actions.

25

NPEs are a small percentage of complainants

Category 1 NPE – Entities that do not make products that practice the asserted patents, but are inventors

that performed R&D, research institutions that rely on licensing, start-ups that have not yet made products,

and manufacturers that make other products

Category 2 NPE – Entities that do not make products that practice the asserted patents and whose

business model primarily focuses on purchasing and asserting patents

30 34

23

4656

2733 36 34

49

46

4

6

4

63

4

1

1

4

4

9

76 3 2

1

0

10

20

30

40

50

60

70

80

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

ITC Cases By Complainant Type

Non-NPE NPE Category 1 NPE Category 2

SOURCE: https://www.usitc.gov/intellectual_property/337_statistics_number_section_337_investigations.htm

26

NPEs’ showings of a domestic industry

Domestic industry found insufficient:

One license after litigation – Motiva, LLC v. ITC, 716 F.3d 596 (Fed. Cir. 2013)

One license after multiple litigations – John Mezzalingua Assocs. v. ITC, 660 F.3d 1322 (Fed. Cir.

2011)

Domestic Industry found sufficient:

A history of R&D and licensing of CDMA technology to multiple handset manufacturers, and

incorporation of that technology into 3G standards. InterDigital Communs., LLC v. ITC, 707 F.3d 1295

(Fed. Cir. 2013)

A history of R&D and then a focus on licensing, with litigation only where necessary. Certain

Consumer Electronics With Display And Processing Capabilities, Inv. No. 337-TA-884, Initial

Determination (Aug. 29, 2014)

NPEs should show a comprehensive licensing scheme, preferably directed toward adoption and

development of technology, rather than simple revenue production

27

Certain Silicon-On-Insulator Wafers (337-TA-1025)

On March 10, 2017, the Commission elected not to review an ALJ’s determination that an NPE

had demonstrated domestic industry

The complainant (Silicon Genesis) relied exclusively on its licensee’s (SunEdison

Semiconductor) investments in the licensee’s own plant, equipment, R&D, and labor

Respondent argued that:

Complainant should not be allowed to rely exclusively on its licensee’s activities; and

If the complainant could so rely, the licensee should be joined as a co-complainant

The Commission did not disagree with the ALJ’s rejection of both arguments

“Soitec provided no case authority for its position because the legal precedent is to the contrary” (14)

Commission decisions have held that the economic prong of the domestic industry requirement can

“be established where a complainant bases its claim exclusively on the activities of a

contractor/licensee” (16)

28

Intellectual Ventures

On March 21, Intellectual Ventures, perhaps the most famous NPE in the U.S., filed an ITC

complaint against various automotive companies

In previous ITC actions, IV had relied on its own licensing actions to show domestic industry

This time, IV relied on its licensee’s activities to show domestic industry

Encap Technologies, Inc., the predecessor-in-interest of the asserted patents, is a

manufacturer and has made capital and labor investments to support manufacturing

IV has the resources to take its cases up on appeal if the Commission finds against it on

domestic industry

29

Impacts

A roadmap for other NPEs to get in the

door of the ITC – rely on at least one

successful licensee

Something to consider when settling with

NPEs – licensees may be dragged into an

ITC case

Obligation to assist?

Cost allocation?

Developments at the ITC

Non-practicing entities (“NPEs”) and the domestic industry requirement

Obtaining a general exclusion order (“GEO”)

30

Remedies at the ITC

Exclusion orders

Limited exclusion order – normally granted – prohibits entry into the U.S. of infringing products

associated with specifically named respondents or their agents

General exclusion order – infrequently granted – prohibits any importation of any covered products by

any party (regardless of whether the importer was a party to ITC action)

U.S. Customs & Border Protection (Customs) enforces exclusion orders

Intellectual Property Rights (IPR) Branch interprets orders and issues guidance to ports

Parties can work with Customs to provide guidance on enforcement

Cease and desist orders

Prevents parties from engaging in infringing activities

Not enforced by Customs

31

Our client’s problem

In Certain Electric Skin Care Devices, Brushes, and Chargers Therefor, and Kits Containing the Same,

Inv. No. 337-TA-959, we were recently able to obtain a broad general exclusion order covering all

products that infringe two of our client’s utility patents

Our client came up with a new product that was wildly successful and created an entirely new market

Our client saw that dozens of foreign companies were manufacturing and importing knockoffs and

infringing devices that were undercutting our client on price and were of poor quality and performance

Our client came to us seeking a strategy to effectively and immediately stop the infringement

We ultimately recommended seeking a general exclusion order from the ITC

Quicker resolution than in district court

Broader and more likely injunctive relief than in district court

32

Getting a general exclusion order

There is little specific ITC guidance on what it considers when reviewing GEO requests

Pursuant to §1337(d)(2), a GEO may issue where:

(A) a general exclusion from entry of articles is necessary to prevent circumvention of an exclusion

order limited to products of named persons; or

(B) there is a pattern of violation of this section and it is difficult to identify the source of infringing

products

A GEO must also not place an undue burden on public health and welfare, competitive conditions in the

United States, or on U.S. consumers

33

Necessary to prevent circumvention of a LEO

In the ‘959 Investigation, the Commission found that:

Respondents change their names to avoid detection

Respondents operate under multiple names and distribute through multiple entities

Demand for infringing products is strong and profits are high

Low barriers to entry – low costs, easy anonymous sales

Sources of infringing products are hard to identify

Same products under different names

Relabeled or rebadged products

The Commission has also previously considered:

Availability of raw materials and necessity of skilled labor

Minimal R&D costs

Permissive business conditions in foreign countries

34

Pattern of violation/difficult to ID products

In the ‘959 Investigation, the Commission found:

An unending stream of infringing products from China and S. Korea

Easy to register new companies in China and S. Korea

Complainants have brought numerous previous suits to address infringement, but the problem

remains unsolved

The Commission has also previously considered:

Number of manufacturers engaged in unauthorized importation of infringing products is large, difficult

to enumerate, and fluid

Actions to disguise the manufacturer and to eliminate clear branding on the goods of the producer

Ease with which a company can produce the infringing products

35

PENDING AND POTENTIAL LEGISLATION

36

37

IP legislation update: 115th Congress

IP-related legislation introduced to date:

Register of Copyrights Selection and Accountability Act of 2017 (H.R. 1695)

Copyright Office for the Digital Economy Act (H.R. 890)

Regulatory Accountability Act of 2017 (H.R. 5)

Preserve Access to Affordable Generics Act (S. 124)

Possible additional subject areas for IP legislation:

Scope of 35 U.S.C. §101

Venue

Leftover portions of reform bills from the 114th Congress

38

Register of Copyrights Selection and Accountability Act of 2017 (H.R. 1695)

Make Register of Copyrights a Presidential appointee

10-year term limit

Renewable by another Presidential nomination and Senate confirmation

May be removed by the President upon notification to the House and Senate

Panel to recommend three candidates for

President to consider for nomination

Speaker of the House

President pro tempore of the Senate

the Majority and Minority Leaders of the House

and Senate

the Librarian of Congress

39

CODE Act (H.R. 890)

Copyright Office for the Digital Economy Act

Would establish the Copyright Office as an independent agency

Same provisions as H.R. 1695 except reappointment is not allowed

Overhaul of the copyright registration system

Creation of a Copyright Advisory Board

Required study of the mandatory deposit provisions

Regulatory Accountability Act of 2017 (H.R. 5)

Repeals Chevron deference to agency interpretations of statutes

Chevron USA v. NRDC, 467 U.S. 837 (1984)

Held that reviewing courts should defer to an agency’s interpretation of an ambiguous

statute

Bill modifies the scope of judicial review of agency actions

Authorizes courts reviewing agency decisions to “decide de novo all relevant questions of

law, including the interpretation of constitutional and statutory provisions, and rules made by

agencies”

Could allow challenges to USPTO’s rules governing inter partes reviews and other AIA rules

40

41

Possible subject areas for IP legislation

Scope of 35 U.S.C. §101

Venue

Leftover portions of reform bills from the 114th Congress

42

§101 – How did we get here?

Congress added§101 via the Patent Act of 1952

Congress intended a broad scope of patent-eligible subject matter

Congress intended to remove the requirement of “invention” that U.S. law had been relying

on as the standard for patentability

Moved the concept of “invention” to§103

Supreme Court has narrowed the scope of patent-eligible subject matter

Three judicial exceptions to patentability

Supreme Court has imported an “invention” standard back into the § 101 analysis

Bilski v. Kappos, 561 U.S. 593 (2010)

Mayo Collaborative Servs. v. Prometheus Labs., 566 U.S. 66 (2012)

Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107 (2013)

Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014)

43

Amending 35 U.S.C. §101?

Professional organizations support amending §101

Both the current and most recent directors of the USPTO, Michelle Lee and David Kappos,

have called for change

Amicus briefs calling for repeal or amendment

44

IPO’s proposed changes to§101

Establishes eligibility

based on the claimed

invention, not a gist

or portion thereof.

Eligibility based on

utility only. Novelty is

left to§102.

Returns the eligibility

analysis to its original

intent, absent creep

from other provisions.

Returns the abstract

idea exception back

to its original intent.

45

Possible subject areas for IP legislation

Scope of 35 U.S.C. §101

Venue

Leftover portions of reform bills from the 114th Congress

46

Venue – how did we get here?

28 U.S.C.§1400(b)

“(b) Any civil action for patent infringement may be brought in the judicial district where the

defendant resides, or where the defendant has committed acts of infringement and has a

regular and established place of business.”

28 U.S.C.§1391

(c): “A corporation may be sued in any judicial district in which it is … doing business, and

such judicial districts shall be regarded as the residence of such corporation for venue

purposes.”

Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222 (1957)

“28 U.S.C. §1400(b) is the sole and exclusive provision controlling venue in patent

infringement actions, and that is not to be supplemented by the provisions of [§] 1391(c).”

353 U.S. at 229.

47

Venue – how did we get here?

Congress implemented minor amendments to§1391 in 1988

Old: defines “residence” of a corporation “for venue purposes.”

New: “For venue purposes,” a corporation “shall be deemed to reside.”

VE Holdings Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990)

Held that §1400(b) and §1391(c) are read together

TC Heartland LLC v. Kraft Food Brands Group LLC, Supreme Court Docket No. 16-341

Congress may step in if the Supreme Court does not overrule the Federal Circuit’s use of

§1391(c) and reinforce that §1400(b) is the sole appropriate measure

48

114th Congress – VENUE Act

Venue Equity and Non-Uniformity Elimination Act of 2016

“(b) Notwithstanding subsections (b) and (c) of section 1391, any civil action for patent infringement or any action for a

declaratory judgment that a patent is invalid or not infringed may be brought only in a judicial district—

(1) where the defendant has its principal place of business or is incorporated;

(2) where the defendant has committed an act of infringement of a patent in suit and has a regular and established

physical facility that gives rise to the act of infringement;

(3) where the defendant has agreed or consented to be sued in the instant action;

(4) where an inventor named on the patent in suit conducted research or development that led to the application for the

patent in suit;

(5) where a party has a regular and established physical facility that such party controls and operates, not primarily for

the purpose of creating venue, and has—

(A) engaged in management of significant research and development of an invention claimed in a patent in suit

prior to the effective filing date of the patent;

(B) manufactured a tangible product that is alleged to embody an invention claimed in a patent in suit; or

(C) implemented a manufacturing process for a tangible good in which the process is alleged to embody an

invention claimed in a patent in suit; or

(6) in the case of a foreign defendant that does not meet the requirements of paragraph (1) or (2), in accordance with

section 1391(c)(3).”

49

Possible subject areas for IP legislation

Scope of 35 U.S.C. §101

Venue

Leftover portions of reform bills from the 114th Congress

50

Unfinished legislation from 114th Congress

Reform Bills

H.R. 9, the Innovation Act

S. 1137, Protecting American Talent and Entrepreneurship (PATENT) Act

S. 632, the STRONG Patents Act

Specific-Issue Bills

H.R. 2045, the TROL Act

H.R. 1057, S. 560 - PARTS Act

H.R. 5757, the CASE Act of 2016

S. 1402, Patents for Humanity Program Improvement Act

H.R. 4826, the Trade Protection Not Troll Protection Act

H.R. 3261, the Stop Online Piracy Act (113th Congress)

Certain provisions of the Innovation Act, such as the imposition of tougher pleading standards for patent

cases, are moot after recent changes in the Federal Rules of Civil Procedure

Other provisions of the Innovation Act remain contentious issues, including: cost-shifting for discovery; a

presumption of so-called “loser pays” fee shifting; and end-user protection from infringement allegations

51

114th Congress – reform bill comparison

Issue Innovation Act (H.R. 9) PATENT Act (S. 1137) STRONG Patents Act

(S. 632)

Financial

incentives

Mandates imposition of

attorneys’ fees, with

exceptions. Potential to go

after shell entity’s owners and

investors for attorneys’ fees.

Mandates imposition of attorneys’

fees, with exceptions, upon motion of

prevailing party. Potential to go after

shell entity’s owners and investors for

attorneys’ fees.

N/A

Post-grant

proceedings

- Amend PGR estoppel

provision to delete “or

reasonably could have

raised.”

- Eliminate broadest

reasonable interpretation

claim construction

standard.

- Measures to address

serial or redundant

petitions.

- Other rulemaking

changes.

- Amend PGR estoppel provision to

delete “or reasonably could have

raised.”

- Eliminate broadest reasonable

interpretation claim construction

standard.

- Mandate different PTAB panels

for institution and final decision.

- Other rulemaking changes.

- Ease patent owner

amendment

standards.

- Heighten petitioner’s

burden of proof.

- Eliminate broadest

reasonable

interpretation claim

construction standard.

- Mandate different

PTAB panels for

institution and final

decision.

52

114th Congress – Reform Bill Comparison

Issue Innovation Act (H.R.

9)

PATENT Act (S. 1137) STRONG Patents Act (S. 632)

Transparency Plaintiff to disclose all

licenses, investors, and

parent entities.

Plaintiff to disclose all

licenses, investors, and

parent entities.

N/A

Divided

infringement

N/A N/A For divided infringement, “it shall not be

a requirement that the steps of the

patented process be practiced by a

single entity.”

Discovery

limitations

Mandatory stays on

discovery during the

pendency of certain

pretrial motions.

Mandatory stays on

discovery during the

pendency of certain pretrial

motions.

N/A

Other provisions - Curb abusive demand

letters

- Automatic customer

suit stays

- Curb abusive demand

letters

- Automatic customer suit

stays

- Curb abusive demand letters

- Give discretion to district courts to

award enhanced damages if “by a

preponderance of the evidence”

infringement is shown to be “willful

or in bad faith”

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