December 05, 2013

House clears NAFCU-sought patent reform bill

Dec. 6, 2013 – The House on Thursday passed the NAFCU-backed "Innovation Act," H.R. 3309, by a vote of 325-91, paving the way for Senate action on the patent-reform bill.

One of the amendments passed by voice vote was from Rep. Sheila Jackson Lee, D-Texas, and would require a study on the economic impact of changes to patent law on small businesses owned by women, veterans and minorities. Other amendments added provide an exception for actions seeking relief based on competitive harm and a requirement that claimants provide additional disclosure information in pre-suit notifications meant to establish a willful infringement claim.

NAFCU Vice President of Legislative Affairs Brad Thaler had previously urged committee approval of H.R. 3309, noting the bill "would provide important relief to credit unions by making it faster and more cost effective to prove that a patent is of poor quality in instances where it leads to frivolous infringement litigation."

A growing number of credit unions report receiving demand letters from law firms representing ‘patent trollers' claiming patent infringement; the credit unions are left to choose between settling or facing litigation. H.R. 3309 seeks to combat such abusive litigation. The legislation would require those alleging infringement to give the specifics of what and whose patent is infringed, and how it is infringed; limit discovery requirements; and allow courts to shift legal costs to winning parties.