Patent Reform: The Impact of the America Invents Act

What does the AIA mean for the patent marketplace, patent litigation, and the future of the Eastern District of Texas as a patent infringement lawsuit venue?

September 03, 2012

At the ninth annual Stanford E-Commerce Best Practices Conference, Latham & Watkins partner Julie Holloway spoke on a panel titled “Patent Reform-280B.” The conference was held June 18, 2012, at Stanford Law School.

Holloway and her fellow panelists discussed the impact of the America Invents Act (AIA), what the new joinder rules mean for the Eastern District of Texas as a patent infringement lawsuit venue and patentable subject matter. Holloway offers highlights from the discussion in this Q&A interview.

What has the impact of the America Invents Act been on patent litigation and the patent marketplace?

Holloway: The impact on patent litigation is very significant, especially with respect to non-practicing entities (NPEs). This is primarily due to the new joinder rules. It used to be that if you wanted to sue a lot of different defendants, all you had to do was say that they all infringed the same patent, or the same set of patents, or some overlapping sets of patents. Then you could sue them all at once. Under the America Invents Act, the new joinder rules say that the fact that a group of defendants are supposedly infringing the same patent is not a sufficient basis to put them in the same case. In order to join the cases, the defendants have to have been involved with the same act of infringement or some related act of infringement. Otherwise, they each get their own case. This increases plaintiffs’ costs quite a bit. As a result, we are seeing an increase in multidistrict litigation.

What do these new joinder rules mean for the Eastern District of Texas as a patent infringement lawsuit venue? Do you expect to see a decline in cases filed there?

Holloway: Most definitely. It is not going to be enough to say, well, a couple of the defendants are in Texas so we can throw in 20 more. You are going to have to have a basis for having each of the individual cases in Texas. The Federal Circuit has also recently issued a number of writs of mandamus saying that cases that don’t have a significant connection with Texas and that have a significant connection with some other jurisdiction have to be transferred. So, A, you can’t get a whole group of defendants in Texas based on the fact that only one or two of them are located there, and B, it’s going to be hard to keep defendants that are not residents located there unless the plaintiff’s case has some other very strong connection with the Eastern District.

What impact will the America Invents Act have on reexamination?

Holloway: There are some new reexamination provisions that are inter partes, which means that both the requester and the patentee can participate. This is different from traditional ex parte reexamination, in which the requestor would put in a request but once it was granted the requester was locked out of the process. A few years ago, the patent office introduced a new inter partes reexamination. It was only available for certain patents, but, it turned out to be a very useful and very successful approach to reexamination. Now with the America Invents Act, that is going away, but something new is going to replace it, the new inter parte review. And that appears likely to be pretty successful. It has more stringent estoppel requirements, but it is available for all patents, so it is going to be a very, very attractive approach for parties that want some alternative to litigation for invalidating patents.

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