Patent Law Practice Center

What Patent Reform Means for Retailers: 4 Key Provisions of the America Invent Act

With the imminent enactment of the America Invents Act (AIA) into law, the patent experts are examining the legislation and helping us understand how it will impact the patent community at large.  R. David Donoghue, Partner at Holland & Knight and Practice Center Contributor, recently posted on his Retail Patent Litigation blog an article discussing how the bill will impact retailers and their supply chains.  He highlights four key provisions of the America Invents Act for retailers:

1. Smaller Patent Troll Suits: The most immediate impact on most retailers will be Section 19, limiting joinder in a single suit of unrelated parties. This is not the more extreme restrictions on venue or joinder that many had hoped for. But it will have some positive impact on patent troll litigation. For suits filed on or after the date of enactment, plaintiffs will only be able to join related parties in a single suit — for example, multiple manufacturers, distributors or resellers of an identical product. And while cases against unrelated parties could still be joined for discovery, they will not be able to be joined for trial. At first glance, this is not much of a barrier to entry for patent trolls. Very few defendants get to trial, and cases may still be consolidated for discovery purposes at the court’s discretion. Where a troll today could pay one $300 filing fee and sue 100 unrelated defendants, after enactment that same troll would have to file 100 suits and pay $30,000 in filing fees. $30,000, however, is dwarfed by the settlement demands in many cases. The hassle of filing the extra suits and the related filing fees, however, may be enough to prevent suits against some of the much smaller entities that almost always end up in these suits. And the requirement of separate suits will allow defendants a much greater ability to seek transfer to an appropriate venue. So, while this is not the sea change that many sought, it is a real benefit to retailers who are tired of being sued in Texas and want a better shot at transferring cases. This Section only applies to cases filed after enactment, not pending cases. So, existing cases will not be impacted. (more…)