Innovation Act and Universities

There has been a lot of criticism towards the Innovation Act set forth by House back in February 2015. The Innovation Act is intended to eliminate patent trolling, but it may negatively impact universities who are joinders of patents through their alumni.

Some supporters of the bill state that it will protect small- and medium-sized business owners who typically settle when they can't fight the patent infringement costs in court; however, it may prove difficult for universities to enforce their own patent rights.

The two points in debate include:
(1) The losing party in the patent infringement is held liable for the winning party's legal fees.
(2) If the losing party cannot pay those fees, co-owners of a patent are required to cover the legal fees.

Point 1 is bad news to startup companies who have limited funds to pursue complicated litigation, while point 2 will involuntarily adjoin the university in select patent lawsuits. Although some argue that the universities likely will not be affected by these provisions due to the wording of the bill, others argue that the bill is too ambiguous about when fee shifting and joinder would apply.

As of now, more than 120 universities oppose this bill.