How is the PREVAIL Act affecting businesses?

Last updated on: March 6, 2024

In today’s fiercely competitive business environment, securing intellectual property (IP) rights is essential for companies striving for innovation and market dominance. The Promoting and Respecting Economically Vital American Innovation Leadership (PREVAIL) Act is an important legislative proposal that has the potential to revamp patent protection in the United States. 

As patent rights play a pivotal role in safeguarding innovation and fostering economic growth, understanding the intricacies of this legislation is important for businesses seeking to maintain their competitive edge. In this blog post, we explore the key objectives of the PREVAIL Act, its potential impact on patent holders and challengers, and strategies for brands to adapt and thrive amidst the evolving legislative landscape.

What is the PREVAIL Act? 

The PREVAIL Act was proposed in response to the urgent need to safeguard U.S. technological leadership and protect intellectual property rights. Introduced by bipartisan lawmakers, the act seeks to address the growing concerns surrounding patent challenges and their impact on innovation and economic competitiveness. 

Proposed changes aim to improve the Patent Trial and Appeal Board (PTAB) process, which has been criticized for its perceived bias against patent holders and the high rate at which it invalidates patents. By enhancing fairness, transparency, and efficiency in patent adjudication, the PREVAIL Act aims to restore confidence in the U.S. patent system and promote innovation across various sectors.

How will the PREVAIL Act transform patent challenges?

The PREVAIL Act proposes fundamental changes to the patent challenge process, aiming to address long-standing concerns and improve fairness for all parties involved. One notable change is the requirement for challengers to demonstrate standing by either being sued for infringement or facing a credible threat of litigation before initiating a PTAB challenge. This provision aims to prevent abusive practices and ensure that only legitimate challenges are brought forward.

Furthermore, the Act seeks to curb the number of PTAB challenges against the same patent to discourage repetitive and costly proceedings that can be a huge burden to patent holders. By prohibiting entities from bringing their own challenges if they financially contribute to an existing challenge, the Act aims to streamline the process and discourage opportunistic disputes.

Moreover, the PREVAIL Act addresses loopholes that allow time-barred parties to join PTAB proceedings after the filing deadline has expired. By establishing a rebuttable presumption against joinder for such parties and prohibiting them from maintaining the proceeding after the original challenger settles, the Act aims to prevent the system from being manipulated and ensure timely resolution of disputes.

These proposed changes are intended to create a more balanced and efficient patent challenge process, benefiting both patent holders and challengers alike.

The PREVAIL Act’s impact on brands’ intellectual property portfolio

The introduction of the PREVAIL Act marks a pivotal moment in the landscape of patent challenges, particularly for brands seeking to protect their intellectual property portfolios. By redefining the rules and procedures at the PTAB, the Act holds the potential to reshape how brands defend their patents and navigate infringement disputes.

With the PREVAIL Act in place, brands may benefit from enhanced safeguards against unauthorized use or infringement of their patented inventions and more robust mechanisms to assert their patent rights and deter potential infringers.

Moreover, the PREVAIL Act could streamline the process for brands seeking to defend their intellectual property and provide them with greater confidence in the integrity of the patent system and the effectiveness of their enforcement efforts.

Additionally, the Act could have significant implications for brands’ litigation strategies, making it easier for brands to navigate patent disputes across different forums, leading to more consistent outcomes and reduced uncertainty in legal proceedings.

Who wins and loses with the PREVAIL Act?

The implications of the PREVAIL Act extend beyond its legislative framework, impacting various stakeholders within the intellectual property landscape. The anticipated winners and losers resulting from the proposed reforms are as follows:

The Winners:

1. Patent holders: The PREVAIL Act provides patent holders with greater certainty and protection against frivolous challenges.
2. Legitimate challengers: The Act benefits legitimate challengers by promoting fairness and efficiency in the patent challenge process. 

The Losers:

1. Abusive challengers: Entities that engage in abusive patent challenges, such as non-practicing entities or competitors seeking to stifle innovation, may face greater hurdles under the PREVAIL Act.
2. Time-barred parties: The Act closes loopholes that allow time-barred parties to join PTAB proceedings after the filing deadline has passed.

Under the PREVAIL Act, patent holders can focus on innovation without the constant threat of litigation, while challengers will be able to pursue valid claims without being overshadowed by opportunistic actors.

In addition, the Act will deter abusive practices, ensure that challenges are based on legitimate concerns rather than strategic motives, and limit the ability of time-barred parties to exploit the system for their benefit.

The PREVAIL Act’s impact on patent litigation and IP enforcement strategies

The PREVAIL Act could have significant implications for patent litigation and intellectual property (IP) enforcement strategies. While the Act aims to promote fairness and efficiency, there are still potential risks that brands need to consider. 

For example, the Act’s provisions may inadvertently favor certain patent holders over others, leading to disparities in enforcement outcomes. Additionally, the Act could shift the balance of power from the PTAB to district courts for validity disputes, potentially impacting the overall landscape of patent litigation.

But despite these potential challenges, the PREVAIL Act also presents opportunities for brands to strengthen their patents and IP rights. By ensuring a more robust and predictable patent challenge process, the Act may provide brands with greater confidence in their intellectual property portfolios.

Moreover, the Act’s emphasis on fairness and efficiency could encourage innovation and investment in emerging technologies. Brands that make IP protection and enforcement a priority will find themselves better positioned to capitalize on these opportunities and maintain a competitive advantage in the market.

PREVAIL Act vs. current patent laws – What’s changing?

As the proposed PREVAIL Act aims to reshape the patent landscape, it is important to explore the key differences between the PREVAIL Act and current patent regulations to shed light on the potential changes in patent enforcement and litigation strategies. Here is a list of notable ways the PREVAIL Act will change current patent laws:

1. Standing requirements: Under the PREVAIL Act, challengers must demonstrate standing by being sued or threatened with a patent infringement lawsuit before filing a PTAB challenge. This requirement aims to prevent opportunistic challenges and promote fairness in the patent challenge process.
2. Limitations on repetitive challenges: The Act prohibits multiple PTAB challenges against the same patent by entities financially contributing to a challenge. This restriction aims to prevent abuse of the PTAB system and reduce the burden on patent owners defending against repetitive challenges.
3. Closure of time-barred loopholes: The Act establishes a presumption against joinder for time-barred parties and prohibits them from maintaining proceedings after the original challenger settles. By closing loopholes that allow time-barred parties to join PTAB proceedings, the Act enhances the integrity of the patent challenge process.
4. Harmonization of burden of proof: The PREVAIL Act aligns the burden of proof at the PTAB with federal district court standards, requiring clear and convincing evidence to invalidate a patent. This harmonization aims to ensure consistency in patent validity determinations across different forums.
5. Increased transparency: The Act enhances transparency by requiring separate written opinions from the USPTO Director when rehearing PTAB decisions. It also prohibits the Director from influencing PTAB panel decisions and establishes a code of conduct for PTAB judges to ensure fairness and impartiality.

Beyond these changes, with the PREVAIL Act, there may be a shift in patent validity disputes from the PTAB to federal district courts, as brands may opt for district court litigation to avoid the complexities and uncertainties associated with PTAB challenges under the new regulations. Litigation in district courts can be time-consuming and costly, requiring brands to carefully weigh their options and develop comprehensive litigation strategies.

How can brands prepare and adapt their strategies to the upcoming changes with the PREVAIL Act?

With the PREVAIL Act looming on the horizon, brands must proactively assess its potential impact and adjust their strategies accordingly. While the Act’s passage is not guaranteed, given the bipartisan support for enhancing patent protection and combating intellectual property infringement, there is a notable likelihood of the PREVAIL Act advancing through legislative channels.

Here are some key steps that brands can take to prepare and adapt:

• Stay informed: Brands should closely monitor developments related to the PREVAIL Act and stay informed about its provisions, timelines, and potential implications. 
• Evaluate existing patents: Brands should also conduct a comprehensive review of their existing patents to assess their strength, validity, and potential vulnerabilities under the new regulations introduced by the PREVAIL Act. 
• Consider patent quality over quantity: In light of the PREVAIL Act’s changes, focusing on the quality of patents rather than the quantity may become increasingly important. High-quality patents with well-drafted claims and solid specifications are likely to fare better under the heightened scrutiny of the PTAB and federal courts.
• Litigation strategy adjustment: Be prepared to adjust your litigation strategy to leverage the new rules favorably. For instance, the increased difficulty for challengers in PTAB proceedings might make district court litigation a more attractive option for enforcing patents.
• Strengthen patent claims: For patents that might be vulnerable under the new standards, consider strategies to strengthen the claims. This might involve filing continuation applications to clarify claims or add additional detail to the specifications to support the claims more robustly. Ensuring that the claims are as clear, concise, and well-supported by the specification as possible can help withstand scrutiny under a “clear and convincing evidence” standard.
• Invest in patent enforcement solutions: To protect their inventions from unauthorized use and infringement, brands should consider investing in patent enforcement solutions like Red Points’ Patent Enforcement Software. These solutions leverage advanced technologies such as AI algorithms and image recognition to automate the detection of potential infringements and streamline the enforcement process.

By taking these proactive and strategic steps, brands can effectively prepare for the upcoming changes with the PREVAIL Act and position themselves to protect their patents and intellectual property rights in an increasingly competitive marketplace.

What’s next

As the PREVAIL Act looms, its potential impact on the patent landscape underscores the need for proactive brand protection strategies. Brands must adapt swiftly to potential changes, integrating them into their intellectual property defense frameworks. 

In this evolving landscape, solutions like Red Points’ Patent Enforcement services emerge as crucial allies for brands seeking to safeguard their inventions from unauthorized use or infringement. With advanced technologies like bot-powered search, photo analysis, and self-improving detection, Red Points offers a comprehensive solution to detect and remove infringers swiftly and efficiently. Request a demo today to discover how you can help safeguard your inventions and defend your intellectual property rights effectively.