On December 18, 2024, the Subcommittee on Intellectual Property of the U.S. Senate Committee on the Judiciary held a hearing concerning the Realizing Engineering, Science, and Technology Opportunities by Restoring Exclusive (RESTORE) Patent Rights Act of 2024.[1] Senator Coons (one of the senators co-sponsoring the Act) led the hearing.
Senator Coons emphasized during the hearing that the Act seeks to bring back, what he views as, the Constitutional right for inventors to prevent others from using their inventions. He noted that for over 200 years, courts almost always granted injunctions when a patentee asked for one. Senator Coons emphasized that predatory infringement, an “infringe now, pay later” model is on the rise and thus patent values have decreased, and data shows patentees are being forced to grant lower-value, non-exclusive licenses. This leads to abandoning innovative ideas and reduced research and development investment.
The Subcommittee heard from four witnesses at the hearing. Jacob Babcock, CEO at NuCurrent, Joshua Landau, Senior Counsel, Innovation Policy Computer and Communications Industry Association, Kristen Jakobsen Osenga, Professor of Law at the University of Richmond School of Law, and Jorge L. Contreras, Professor of Law at University of Utah S.J. Quinney College of Law. The witnesses presented varying viewpoints questioning and supporting the Act and took questions from the senators.
Senator Coons’ questions indicated that he was concerned with what he termed “efficient infringement” (or predatory infringement, referenced above). Essentially a company, either domestic or foreign, knowingly infringes a patent and only if the patentee sues them and sees litigation through, does the alleged infringer suffer any consequences. The concern raised by Senator Coons was that the infringement is simply a cost of doing business and the patentee, even if they win the litigation, does not see adequate reward for their invention because the infringer continues to make money on the infringing product and merely has to pay a license fee.
Another concern raised by some of the witnesses and Senator Coons, is that the eBay decision[2] distorted statistics on the requesting and granting of permanent injunctions, where parties no longer seek injunctive relief and thus the current statistics do not accurately reflect how difficult it is to have an injunction granted in one’s favor.
Questions from the senators also indicated that they are concerned with the apparent burden shifting that resulted from eBay. Under the eBay factors, it is the patentee’s burden to show that an injunction should issue. The senators (especially Senator Hirono) deemed it more appropriate to create a presumption that an injunction should issue and place the burden on the infringer to show otherwise.
The witnesses also proposed certain revisions to the one-sentence Act that would potentially address the overbreadth that was raised as a concern. One such suggestion was to attach the presumption of an injunction to the requirement that a patentee be producing or making a product. This would mean that non-practicing entities could not take advantage of the Act and would instead have to proceed through the traditional eBay factors.
The hearing was helpful, as it shed light on concerns held by multiple senators regarding an alleged stifling of innovation due to eBay. The Act may be changed to disallow non-practicing entities from taking advantage of the easier injunctive relief offered, but only time will tell. We will continue to monitor the Act’s progress and provide updates.
[1] https://www.judiciary.senate.gov/committee-activity/hearings/the-restore-patent-rights-act-restoring-americas-status-as-the-global-ip-leader
[2] The Supreme Court’s eBay decision was discussed in greater depth in our first article on the RESTORE Act: https://maierandmaier.com/restore-patent-rights-act-of-2024-an-attempt-to-bring-back-permanent-injunctions-permanently/
