WASHINGTON — The House on Thursday overwhelmingly passed a bill protecting technology companies and their customers from nuisance patent-infringement lawsuits by shell companies that exist merely to gather dormant patents and threaten lawsuits against suspected violators.
The Innovation Act would force companies that bring patent-infringement lawsuits to disclose information about who ultimately owns a patent and would benefit from a settlement or award and to specify how a patent is being violated.
The bill would also require judges to declare early in the proceeding whether a patent is valid, perhaps saving a company from spending millions of dollars on discovery.
The bipartisan bill passed 325-91. It comes only two years after President Barack Obama signed into law the America Invents Act, a sweeping overhaul of the patent system that was shaped in part to address the patent troll problem.
Instead, a provision of the law caused the number of patent lawsuits to soar. Patent-assertion entities, the shell companies that are referred to as patent trolls, accounted for more than half of the 4,000 patent lawsuits filed last year.
Members of the Senate have introduced several similar bills that have also received bipartisan support.
The bill most likely to make its way to the Senate floor is sponsored by Sen. Patrick Leahy, D-Vt., who was a primary sponsor of the America Invents Act. Leahy is chairman of the Senate Judiciary Committee, which will conduct a hearing on that bill this month.
Rep. Bob Goodlatte, R-Va., who wrote the bill and is chairman of the House Judiciary Committee, said in a statement after the vote, “We have seen an exponential increase in the use of weak or poorly granted patents by so-called patent trolls to file numerous patent infringement lawsuits against American businesses with the hopes of securing a quick payday.”
Many technology companies and trade groups from an array of industries also applauded the bill’s passage. Groups representing credit unions, retailers, cable television companies, software makers and consumers voiced support for the measure.
Opponents of the House bill said it was rushed through without allowing adequate time for discussion. The Innovation Alliance, which represents inventors and patent holders, including some companies, opposed the bill, saying it does not protect the rights of inventors and would result in more lawsuits rather than fewer.
The groups said it hoped the Senate bill would undo some of the problems they saw with the House measure.