Senator Coons introduced the bipartisan Support Technology and Research for Our Nation’s Growth (STRONG) Patents Act to ensure that our patent system protects this essential property right. The bill focuses on achieving five things:
- Crack down on abusive demand letters by empowering the Federal Trade Commission to target firms that abuse startups rather than invent anything.
- Ensure that pleading standards for patent-infringement cases match the standards used for all other forms of civil actions, creating a significant barrier to frivolous lawsuits before any funds are spent on discovery.
- Eliminate fee diversion from the U.S. Patent and Trademark Office so we can ensure that those who examine patents have adequate training and dependable funding.
- Ensure balance in post-grant proceedings at the PTO, so that this expedited form of patent litigation is both fast and fair.
- Analyze the impact that our patent system has on small businesses, both from the perspective of startups reliant on patents and those small businesses facing allegations of infringement.
Why are patents so important?
- IP-intensive industries comprise one-third of U.S. GDP ($5.5 trillion), generate 27 million jobs, and pay employees over 30% more than other industries.
- 75% of venture capital investors consider the value of patents when making funding decisions in small businesses (97% in the biotech industry).
- Patents inspire innovation in fields that require long-term investment in R&D: from life-saving therapies to new generations of wireless technologies.
- Patents allow us to benefit from the genius of small inventors. With a strong patent right, individuals create inventions that disrupt dominant companies.
- U.S. leadership in innovation is due in no small part to an unrivaled patent system. Strong patents today provide for game-changing inventions tomorrow.
What's in the STRONG Patents Act?
Section 101 – Findings
Sections 102 & 103 – Ensuring Balance in Post-Grant Proceedings
- Section A: Claim Construction – Harmonizes the claim-construction standard used in post-grant proceedings at the Patent Trial and Appeal Board (PTAB) with the standard used in District Court litigation.
- Section B: Amendment of Claims – Clarifies that during post-grant proceedings, the patent-holder may propose amended, narrower claims for the patent under consideration.
- Section C: Burden of Proof – Maintains the presumption of validity for patent rights in post-grant proceedings, and clarifies that unpatentability may be proved for existing claims by the “clear and convincing evidence” standard used in District Court litigation.
- Section D: Standing – Minimizes abuse of post-grant proceedings by ensuring that a petitioner has a business or financial reason to bring a case before the PTAB, to reduce incentives for privateering or extortion of nuisance settlements.
- Section E: Discovery of Real Party in Interest – Permits evidence in post-grant discovery to determine the petition’s real party in interest. Like the Standing requirement in Section D, this aims to minimize abusive behavior.
- Section F: Evidence Supporting Preliminary Response – Ensures a patent-holder an equal opportunity to present evidence at the initiation of a post-grant proceeding.
- Section G: Coordination of Proceedings – Reduces redundancy at PTO by ensuring that post-grant petitions raise issues not previously considered during initial examination.
Section 104 – Composition of PGR and IPR Panels
Clarifies the intent of the AIA that PTO adjudicators who decide whether to permit a post-grant proceeding are distinct from the PTAB judges who will decide the outcome of a petition.
Section 105 – Re-Examination of Patents
Harmonizes treatment of re-examination proceedings (which preceded the AIA) with the treatment of Inter Partes Review (IPR) post-grant proceedings. These rules ensure that there are clear guidelines for treatment of parallel proceedings to reduce wasteful duplication and delays.
Section 106 – Elimination of Form 18
Ensures that, even if the Judicial Conference fails to eliminate Form 18 by the end of 2015 (as expected), patent plaintiffs must meet the “plausibility” standard under Iqbal and Twombly.
Section 107 – Elimination of USPTO Fee Diversion
Eliminates fee diversion through the establishment of a new USPTO revolving fund in the U.S. Treasury. Adequate, dependable funding is critical for timely, higher-quality patents.
Section 108 – Willful Infringement
Harmonizes the standard for willful infringement with the Supreme Court’s standard for frivolous litigation behavior under Octane Fitness.
Section 109 – Divided Infringement
Addresses uncertainty in the law of induced infringement after the Supreme Court’s holding in Akamai v. Limelight by eliminating the “single-entity” rule for defendants who have knowingly and intentionally caused the infringement of a patent. This does not apply to end-user defendants.
Section 110 – Institutions of Higher Education Clarifies the application of “micro-entity” status to Universities under the Leahy-Smith America Invents Act.
Section 111 – Assisting Small Businesses in the U.S. Patent System
- Small Business Administration Report – Requires the SBA to analyze the impact of patents on small businesses, both from the perspective of businesses reliant on patents and those facing demand letters or lawsuits on the basis of alleged patent infringement.
- Expansion of Patent Pilot Program to Aid Small Business Defendants – Provides additional training materials and an additional law clerk to help speed the resolution of cases in which an individual or small business has been accused of patent infringement.
- Expanded Access to Patent-Searching Databases – Provides open access to patent-searching databases currently available only at the Public Search Facility in Alexandria, VA and other Patent and Trademark Resource Centers (PTRCs). Greater access to patent-related materials (and training materials) will provide greater clarity for all.
Title II – Targeting Rogue and Opaque Letters Empowers the Federal Trade Commission to crack down on abusive patent-related demand letters. This section mirrors the bipartisan TROL (Targeting Rogue and Opaque Letters) Act that was reported favorably in the 113th Congress from the House Energy & Commerce Subcommittee on Commerce, Manufacturing, and Trade.