The House of Representatives has passed H.R. 3309 (the Innovation Act).  This bill would make dramatic changes to patent enforcement and defense law.

The bill raises the stakes in patent infringement litigation by changing the traditional rule that attorney’s fees and costs are not awarded to a prevailing party “unless the court finds that the position and conduct of the non-prevailing party or parties were reasonably justified in law and fact.”  If the losing party cannot pay, interested third-parties such as patent assignees or licensees can be forced to pay the winner’s attorneys’ fees.  There is an exception for law firms who are enforcing patents on a contingent fee basis.  So this rare option may become extinct.

The bill also delays full discovery until claim construction has occurred.  This would delay most cases.  Claim construction in Markman hearings has long been considered the first battleground in patent enforcement litigation.

Pleading requirements would be high for patent cases.  A complaint, counterclaim or cross claim for patent infringement will be “a clear and concise statement of where each element of each [asserted claim] is found in the accused instrumentality; and with detailed specificity, how each [asserted] claim is met by the accused instrumentality.”  The up-front work is higher, potentially increasing patent litigation costs in the early stages.  However, most good litigators would have done this work before commencing suit so this may not be a game changer.  The impact will most likely only be to patent trolls or non-practicing entities litigation “by the numbers” – biggest return at lowest cost.

We’ll be watching this bill and if it becomes law, how it impacts the world of patent enforcement.