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Inventor Rights Act introduced

In the closing days of 2019, a new bill was introduced that ought to be very much of interest to individual inventors. The proposed Inventor Rights Act, H.R.5478, amends some aspects of the existing patent law and introduces some new provisions, all with the goal of fixing shortcomings of the existing law and to bring clarifications where needed. The Act fundamentally aims to bring more of a balance of interests to the law by addressing those aspects that are widely seen as onerous or counter-productive by especially the small innovators and individual inventors. In particular, the very high rate that the Patent Trial and Appeal Board (PTAB), a USPTO agency, invalidates patents that were issued by the USPTO itself has been a consistent point of criticism of the current law.

Accordingly, here are some of the changes proposed in the Inventor Rights Act.

  1. The Act prohibits inventor-owned patents from being reviewed for validity by the USPTO after issuance, unless consented by the inventor. This applies only to those patents that are owned by inventors or by entities controlled by the inventors. The aim of this provision is to remove the cost and burden of having to fund Inter-Partes Review (IPR) defense of patents by inventors, who typically lack the resources to do so effectively. It does not prevent patents owned by anyone from being challenged in District Court cases, however.
  2. Expands venue choice for District Court action to include a jurisdiction where the inventor had a place of business or conducted research, development, manufacturing. The aim of this expansion of venue compared to what the Oil States case prescribed is to reduce the cost and burden of bringing an action for inventors. It is usually the case that the defendants have vastly larger resources than individual inventors.
  3. Requires that the courts presume that any infringement causes irreparable damage to the inventors, and hence injunctions should be issued in those cases where infringement has been proven.
  4. For inventor owned patents, the Act simplifies the damages and provides for disgorgement of profits from infringing products. This is in contrast to the reasonable royalty based damages calculations. This allows individual inventors to have the ability to use profit disgorgement available to patent holders with products that practice the patented invention. The rationale is that the individual inventors with transformative inventions do not always have the resources to build and market their inventions, and hence should not be prevented from access to the damages calculations based on lot profit.
  5. Recovery of attorneys’ fees in cases where the fees substantially exceed the damages award. This provision is aimed at discouraging a well-resourced defendant from engaging in practice aimed at running up litigation costs in order to exhaust the inventor’s resources.

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