Patent litigation defendants beware: RESTORE Patent Rights Act

The Realizing Engineering, Science, and Technology Opportunities by Restoring Exclusive (RESTORE) Patent Rights Act of 2024 aims to address a growing concern in the innovation ecosystem: the diminishing power of injunctive relief in patent infringement cases. This is great news for patent plaintiffs and may cause concerns for those faced with patent lawsuits from non-practicing entities.

The challenge: eroding patent protections

Following the Supreme Court’s 2006 decision in eBay v. MercExchange, obtaining permanent injunctions in patent infringement cases has become increasingly difficult.  According to materials released by the bill sponsors, this shift has had profound implications:

• Requests for permanent injunctions in patent cases fell by 65% for companies using their patented technology to manufacture products.
• The decline was even more stark for licensing patent owners like universities and research clinics: requests dropped by 85%, and grants plummeted by 90%.

The RESTORE Act: A legislative response

Introduced on July 30, 2024, by Senators Chris Coons (D-Del.) and Tom Cotton (R-Ark.), along with Representatives Nathaniel Moran (R-Tx.) and Madeleine Dean (D-Pa.), the RESTORE Patent Rights Act seeks to reinstate a rebuttable presumption that an injunction is warranted after a court’s final ruling of patent infringement.

Key aspects of the bill include:

1. Restoring the exclusivity right to patent holders, aligning with the Constitution’s intent to “promote the Progress of Science and useful Arts.”
2. Placing the burden on the infringer to show why a permanent injunction should not be granted.

Implications for the innovation landscape

Proponents^[1] of the Act believe that, if passed, it could significantly reshape the patent enforcement landscape:

• Strengthened Patent Rights: By restoring the power of injunctive relief, the act aims to give teeth to patent exclusivity, potentially deterring willful infringement.
• Support for Smaller Innovators: Universities, startups, and individual inventors may find their intellectual property better protected against unauthorized use by larger entities.
• Economic Impact: The act could reinvigorate venture capital investment in R&D, particularly in cutting-edge fields like artificial intelligence, quantum computing, and 6G technologies.
• Global Competitiveness: By reinforcing the U.S. patent system, the act aims to maintain America’s position as a global leader in innovation.

Looking ahead

As the RESTORE Patent Rights Act moves through the legislative process, it will likely spark intense debate.  The outcome could have far-reaching implications for the U.S. innovation landscape, potentially redefining the balance between patent holders’ rights and the public interest in technological advancement.  Critics maintain that increasing the availability of injunctions for products covered by multiple patents could lead to significant windfalls for patent holders (i.e. individual lawsuits could lead to aggregate licenses for more than the patent’s fair share of the overall product).

As this legislation progresses, stakeholders across the innovation ecosystem should closely monitor its development and consider how the RESTORE Act might impact their intellectual property protection and technology development strategies.

Footnote

[1] The bill has garnered support from various industry groups and stakeholders, including Innovation Alliance, Alliance of U.S. Startups & Inventors for Jobs, and Association of University Technology Managers. Prominent leaders in the space have expressed support, as quoted in Senator Coons’ press release:

• David Kappos, Co-Chair, Council for Innovation Promotion, and former Under Secretary of Commerce for Intellectual Property and U.S. Patent and Trademark Office (USPTO) Director: “Right now, IP thieves can get away with a slap on the wrist, knowing they’ll likely face only a one-time fee, even if found liable. The RESTORE Act changes that.”
• Andrei Iancu, Co-Chair, Council for Innovation Promotion, and former Under Secretary of Commerce for Intellectual Property and USPTO Director: “To lead the world in the technologies of the future, America must first protect its inventions at home. Inventors cannot effectively protect their inventions without the ability to exclude. The RESTORE Act defends American innovation from unlawful infringement, safeguarding our economy and national security.”