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03.30.16

VENUE Act and ITC Reform Still Serve to Distract From Required Reform (Abolishing Software Patents)

Posted in America, Patents at 4:18 pm by Dr. Roy Schestowitz

CCIA logoSummary: More non-solutions to an actual severe (and growing) problem which boils down to low patent quality, notably software patents

The VENUE Act was covered here several times earlier this month and it’s now the word (or term) on many people’s lips, even friends of patent trolls, who in unrelated articles state: “The Venue Equity and Non-Uniformity Elimination Act 2016 would restrict patent suits to district courts where the parties are incorporated or where they have physical facilities tied to either the development of the technology at issue or alleged infringement.”

The VENUE Act, in spite of its catchy name, is not a solution. It’s just an effort to slow down the problem as it increasingly exacerbates, usually in Texas. “VENUE Act aims to lessen ease of filing patent lawsuits in Eastern District of Texas” says the headline of this new article. To quote from it:

A recently proposed bill in the U.S. Senate may be the key to curbing the rampant patent lawsuit abuse in the plaintiff-friendly Eastern District of Texas jurisdiction.

Proposed by Republican Sens. Jeff Flake (Ariz.), Cory Gardner (Colo.) and Mike Lee (Utah), the Venue Equity and Non-Uniformity Elimination Act (VENUE Act) targets a very specific part of the problem with patent abuse known as forum shopping.

“The VENUE Act would make it harder for companies to file a suit in districts that don’t have meaningful connection to the suit,” Daniel Nazer, staff attorney with the Electronic Frontier Foundation and Mark Cuban Chair to Eliminate Stupid Patents, told the Southeast Texas Record. “This bill is really about making sure disputes are filed somewhere that makes sense.”

Instead of allowing a patent owner to file wherever they would like, the bill requires an individual to bring a lawsuit in the city where the invention was created or where the company being sued is based or manufactures its product. In other words, small California startups would no longer be sued by a California inventor in the Eastern District of Texas if the VENUE Act was signed into law.

This is not the solution however. Like several ‘reform’ proposals before it, this merely serves to give the illusion that problems are being tackled even when they’re not. Another site, owned by a front group of large corporations to mostly focus on patent trolls, speaks about something called ITC reform, whatever that actually is (a little vague). Matt Levy (CCIA) writes:

The last couple of weeks have seen two good patent bills introduced, first the VENUE Act, and now the Trade Protection Not Troll Protection Act. This bipartisan bill closes loopholes at the International Trade Commission that patent trolls have been exploiting.

The International Trade Commission (ITC) is an agency whose main job is to protect American industries from unfair competition abroad. If a U.S. company thinks another company is importing goods unfairly produced, it can ask the ITC to investigate. If the Commission finds that the importer (called the respondent) has violated the trade laws (which include infringing U.S. patents), it can issue an exclusion order. The order instructs customs to block the products in question at the border.

The ITC handles a fair number of patent cases, because the ability to get an exclusion order is essentially the same as an injunction in district court. And that is where patent trolls come in.

The ITC has many problems, but that doesn’t mean that within the ITC (enforcement by embargo/sanctions) exists a solution to the overall problem, which is low-quality patents (e.g. on software) being granted with virtually no quality assurance. The USPTO increasingly looks like a filing office, not an examination office. We shall deal with that in a later post tonight.

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