Patent Abuse Reduction Act of 2013

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Patent Abuse Reduction Act of 
2013''.

SEC. 2. PLEADING REQUIREMENTS.

    (a) In General.--Chapter 29 of title 35, United States Code, is 
amended by inserting after section 281 the following:
``Sec. 281A. Pleading requirements for patent infringement actions
    ``In a civil action arising under any Act of Congress relating to 
patents, a party alleging infringement shall include in the initial 
complaint, counterclaim, or cross-claim for patent infringement--
            ``(1) an identification of each patent allegedly infringed;
            ``(2) an identification of each claim of each patent 
        identified under paragraph (1) that is allegedly infringed;
            ``(3) for each claim identified under paragraph (2), an 
        identification of each accused apparatus, product, feature, 
        device, method, system, process, function, act, service, or 
        other instrumentality (referred to in this section as an 
        `accused instrumentality') alleged to infringe the claim;
            ``(4) for each accused instrumentality identified under 
        paragraph (3), an identification with particularity, if known, 
        of--
                    ``(A) the name or model number of each accused 
                instrumentality; and
                    ``(B) the name of each accused method, system, 
                process, function, act, or service, or the name or 
                model number of each apparatus, product, feature, or 
                device that, when used, allegedly results in the 
                practice of the claimed invention;
            ``(5) for each accused instrumentality identified under 
        paragraph (3), an explanation of--
                    ``(A) where each element of each asserted claim 
                identified under paragraph (2) is found within the 
                accused instrumentality;
                    ``(B) whether each such element is infringed 
                literally or under the doctrine of equivalents; and
                    ``(C) with detailed specificity, how the terms in 
                each asserted claim identified under paragraph (2) 
                correspond to the functionality of the accused 
                instrumentality;
            ``(6) for each claim that is alleged to have been infringed 
        indirectly, a description of--
                    ``(A) the direct infringement;
                    ``(B) any person alleged to be a direct infringer 
                known to the party alleging infringement; and
                    ``(C) the acts of the alleged indirect infringer 
                that contribute to or are inducing the direct 
                infringement;
            ``(7) a description of the right of the party alleging 
        infringement to assert each--
                    ``(A) patent identified under paragraph (1); and
                    ``(B) patent claim identified in paragraph (2);
            ``(8) a description of the principal business of the party 
        alleging infringement;
            ``(9) a list of each complaint filed, of which the party 
        alleging infringement has knowledge, that asserts or asserted 
        any of the patents identified under paragraph (1);
            ``(10) for each patent identified under paragraph (1), 
        whether such patent is subject to any licensing term or pricing 
        commitments through any agency, organization, standard-setting 
        body, or other entity or community;
            ``(11) the identity of any person other than the party 
        alleging infringement, known to the party alleging 
        infringement, who--
                    ``(A) owns or co-owns a patent identified under 
                paragraph (1);
                    ``(B) is the assignee of a patent identified under 
                paragraph (1); or
                    ``(C) is an exclusive licensee to a patent 
                identified under paragraph (1);
            ``(12) the identity of any person other than the party 
        alleging infringement, known to the party alleging 
        infringement, who has a legal right to enforce a patent 
        identified under paragraph (1) through a civil action under any 
        Act of Congress relating to patents or is licensed under such 
        patent;
            ``(13) the identity of any person with a direct financial 
        interest in the outcome of the action, including a right to 
        receive proceeds, or any fixed or variable portion thereof; and
            ``(14) a description of any agreement or other legal basis 
        for a financial interest described in paragraph (13).''.
    (b) Technical and Conforming Amendment.--The table of sections for 
chapter 29 of title 35, United States Code, is amended by inserting 
after the item relating to section 281 the following:

``281A. Pleading requirements for patent infringement actions.''.
    (c) Review of Form 18.--Not later than 12 months after the date of 
enactment of this Act, the Supreme Court shall review and amend Form 18 
of the Federal Rules of Civil Procedure to ensure that Form 18 is 
consistent with the requirements under section 281A of title 35, United 
States Code, as added by subsection (a).
    (d) Rule of Construction.--Nothing in this section or the 
amendments made by this section shall be construed to alter existing 
law or rules relating to joinder.

SEC. 3. JOINDER OF INTERESTED PARTIES.

    Section 299 of title 35, United States Code, is amended by adding 
at the end the following:
    ``(d) Joinder of Interested Parties.--
            ``(1) Definition.--In this subsection, the term `interested 
        party', with respect to a civil action arising under any Act of 
        Congress relating to patents--
                    ``(A) means a person described in paragraph (11) or 
                (13) of section 281A; and
                    ``(B) does not include an attorney or law firm 
                providing legal representation in the action if the 
                sole basis for the financial interest of the attorney 
                or law firm in the outcome of the action arises from an 
                agreement to provide that legal representation.
            ``(2) Joinder of interested parties.--In a civil action 
        arising under any Act of Congress relating to patents, the 
        court shall grant a motion by a party defending an infringement 
        claim to join an interested party if the defending party shows 
        that the interest of the plaintiff in any patent identified in 
        the complaint, including a claim asserted in the complaint, is 
        limited primarily to asserting any such patent claim in 
        litigation.
            ``(3) Limitation on joinder.--The court may deny a motion 
        to join an interested party under paragraph (2) if--
                    ``(A) the interested party is not subject to 
                service of process; or
                    ``(B) joinder under paragraph (2) would deprive the 
                court of subject matter jurisdiction or make venue 
                improper.''.

SEC. 4. DISCOVERY LIMITS.

    (a) In General.--Chapter 29 of title 35, United States Code, is 
amended by adding at the end the following:
``Sec. 300. Discovery in patent infringement suits
    ``(a) Discovery Limitation Prior to Claim Construction.--
            ``(1) In general.--Except as provided in paragraph (2), in 
        a civil action arising under any Act of Congress relating to 
        patents, if the court determines that a ruling relating to the 
        construction of terms used in a patent claim asserted in the 
        complaint is required, discovery shall be limited, until such 
        ruling, to information necessary for the court to determine the 
        meaning of the terms used in the patent claim, including any 
        interpretation of those terms used to support the claim of 
        infringement.
            ``(2) Discretion to expand scope of discovery.--
                    ``(A) Timely resolution of actions.--If, under any 
                provision of Federal law (including the Drug Price 
                Competition and Patent Term Restoration Act (Public Law 
                98-417)), resolution within a specified period of time 
                of a civil action arising under any Act of Congress 
                relating to patents will have an automatic impact upon 
                the rights of a party with respect to the patent, the 
                court may permit discovery in addition to the discovery 
                authorized under paragraph (1) before the ruling 
                described in paragraph (1) as necessary to ensure 
                timely resolution of the action.
                    ``(B) Resolution of motions.--When necessary to 
                resolve a motion properly raised by a party before a 
                ruling relating to the construction of terms (as 
                described in paragraph (1)), the court may allow 
                limited discovery in addition to the discovery 
                authorized under paragraph (1) as necessary to resolve 
                the motion.
    ``(b) Sequence and Scope; Cost-Shifting.--
            ``(1) Definitions.--In this subsection--
                    ``(A) the term `additional discovery' means 
                discovery of evidence other than core documentary 
                evidence; and
                    ``(B) the term `core documentary evidence', with 
                respect to a civil action arising under any Act of 
                Congress relating to patents--
                            ``(i) subject to clause (ii), includes only 
                        documents that--
                                    ``(I) relate to the conception, 
                                reduction to practice, and application 
                                for the asserted patent;
                                    ``(II) are sufficient to show the 
                                technical operation of the 
                                instrumentality identified in the 
                                complaint as infringing the asserted 
                                patent;
                                    ``(III) relate to potentially 
                                invalidating prior art;
                                    ``(IV) relate to previous licensing 
                                or conveyances of the asserted patent;
                                    ``(V) are sufficient to show 
                                revenue attributable to any claimed 
                                invention;
                                    ``(VI) are sufficient to show the 
                                organizational ownership and structure 
                                of each party, including identification 
                                of any person that has a financial 
                                interest in the asserted patent;
                                    ``(VII) relate to awareness of the 
                                asserted patent or claim, or the 
                                infringement, before the action was 
                                filed; and
                                    ``(VIII) sufficient to show any 
                                marking, lack of marking, or notice of 
                                the asserted patent provided to the 
                                accused infringer; and
                            ``(ii) does not include computer code or 
                        electronic communication, such as e-mail, text 
                        messages, instant messaging, and other forms of 
                        electronic communication, unless the court 
                        finds good cause for including such computer 
                        code or electronic communication as core 
                        documentary evidence of a particular party 
                        under clause (i).
            ``(2) Discovery sequence and scope.--In a civil action 
        arising under any Act of Congress relating to patents, the 
        parties shall discuss and address in the written report filed 
        under rule 26(f)(2) of the Federal Rules of Civil Procedure the 
        views and proposals of the parties on--
                    ``(A) when the discovery of core documentary 
                evidence should be completed;
                    ``(B) whether the parties will seek additional 
                discovery under paragraph (3); and
                    ``(C) any issues relating to infringement, 
                invalidity, or damages that, if resolved before the 
                additional discovery described in paragraph (3) 
                commences, will simplify or streamline the case, 
                including the identification of any key patent claim 
                terms or phrases to be construed by the court and 
                whether the early construction of any of those terms or 
                phrases would be helpful.
            ``(3) Discovery cost-shifting.--
                    ``(A) In general.--In a civil action arising under 
                any Act of Congress relating to patents, each party 
                shall be responsible for the costs of producing core 
                documentary evidence within the possession, custody, or 
                control of that party.
                    ``(B) Additional discovery.--
                            ``(i) In general.--A party to a civil 
                        action arising under any Act of Congress 
                        relating to patents may seek additional 
                        discovery if the party bears the costs of the 
                        additional discovery, including reasonable 
                        attorney's fees.
                            ``(ii) Requirements.--A party shall not be 
                        allowed additional discovery unless the party--
                                    ``(I) at the time that such party 
                                seeks additional discovery, provides to 
                                the party from whom the additional 
                                discovery is sought payment of the 
                                anticipated costs of the discovery; or
                                    ``(II) posts a bond in an amount 
                                sufficient to cover the anticipated 
                                costs of the discovery.
                    ``(C) Rules of construction.--Nothing in 
                subparagraph (A) or (B) shall be construed to--
                            ``(i) entitle a party to information not 
                        otherwise discoverable under the Federal Rules 
                        of Civil Procedure or any other applicable rule 
                        or order;
                            ``(ii) require a party to produce 
                        privileged matter or other discovery otherwise 
                        limited under the Federal Rules of Civil 
                        Procedure; or
                            ``(iii) prohibit a court from--
                                    ``(I) determining that a request 
                                for discovery is excessive, irrelevant, 
                                or otherwise abusive; or
                                    ``(II) setting other limits on 
                                discovery.''.

SEC. 5. COSTS AND EXPENSES.

    (a) In General.--Section 285 of title 35, United States Code, is 
amended to read as follows:
``Sec. 285. Costs and expenses
    ``(a) In General.--The court shall award to the prevailing party 
reasonable costs and expenses, including attorney's fees, unless--
            ``(1) the position and conduct of the non-prevailing party 
        were objectively reasonable and substantially justified; or
            ``(2) exceptional circumstances make such an award unjust.
    ``(b) Prohibition on Consideration of Certain Settlements.--In 
determining whether an exception under paragraph (1) or (2) of 
subsection (a) applies, the court shall not consider as evidence any 
license taken in settlement of an asserted claim.
    ``(c) Recovery.--If the non-prevailing party is unable to pay 
reasonable costs and expenses awarded by the court under subsection 
(a), the court may make the reasonable costs and expenses recoverable 
against any interested party, as defined in section 299(d).''.
    (b) Technical and Conforming Amendments.--
            (1) Table of sections.--The table of sections for chapter 
        29 of title 35, United States Code, is amended by striking the 
        item relating to section 285 and inserting the following:

``285. Costs and expenses.''.
            (2) Conforming amendments.--Chapter 29 of title 35, United 
        States Code, is amended--
                    (A) in section 271(e)(4), in the flush text 
                following subparagraph (D), by striking ``attorney 
                fees'' and inserting ``reasonable costs and expenses, 
                including attorney's fees,'';
                    (B) in section 273(f), by striking ``attorney 
                fees'' and inserting ``reasonable costs and expenses, 
                including attorney's fees,''; and
                    (C) in section 296(b), by striking ``attorney 
                fees'' and inserting ``reasonable costs and expenses 
                (including attorney's fees)''.

Summary: Patent Abuse Reduction Act of 2013 - Directs a party alleging infringement in a civil action arising under any Act of Congress relating to patents to include in the court pleadings:   an identification of each patent and claim allegedly infringed as well as the accused apparatus, product, feature, device, method, system, process, function, act, service, or other instrumentality (referred to as an &quot;accused instrumentality&quot;) alleged to infringe any such claim; an identification of the name or model number of accused instrumentalities that allegedly result in the practice of a claimed invention; for each accused instrumentality, an explanation of where each element of each asserted claim identified is found within the accused instrumentality, whether each such element is infringed literally or under the doctrine of equivalents, and how the terms in each asserted claim correspond to the functionality of the accused instrumentality;  for each claim alleged to have been infringed indirectly, a description of: (1) the direct infringement; (2) any person alleged to be a direct infringer known to the party alleging infringement; and (3) the acts of the alleged indirect infringer that contribute to or are inducing the direct infringement;  a description of the right of the party alleging infringement to assert each identified patent and claim;  the principal business of the party alleging infringement;  a list of each complaint filed, of which the party alleging infringement has knowledge, that asserts or asserted any of the identified patents;  whether any identified patent is subject to any licensing term or pricing commitments through any agency, organization, or other standard-setting body;   the identity of any person other than the party alleging infringement, known to the party alleging infringement, who: (1) owns or co-owns an identified patent or is the assignee of, or an exclusive licensee to, such patent; or (2) has a legal right to enforce an identified patent through a civil action under any Act of Congress relating to patents or is licensed under such patent; and the identity of any person with a direct financial interest in the outcome of the action and a description of any agreement or other legal basis for such financial interest.  Sets forth procedures with respect to the joinder of parties and discovery of evidence.  Directs each party to be responsible for the costs of producing core documentary evidence within the possession, custody, or control of that party.  Defines &quot;core documentary evidence&quot; as documents that:   relate to the conception, reduction to practice, and application for the asserted patent;  are sufficient to show the technical operation of the instrumentality identified in the complaint as infringing the asserted patent;   relate to potentially invalidating prior art;  relate to previous licensing or conveyances of the asserted patent;  are sufficient to show revenue attributable to any claimed invention;  are sufficient to show the organizational ownership and structure of each party, including identification of any person with a financial interest in the asserted patent;  relate to awareness of the asserted patent or claim, or the infringement, before the action was filed; and   are sufficient to show any marking, lack of marking, or notice of the asserted patent provided to the accused infringer.   Excludes from the definition of core documentary evidence any computer code or electronic communication, such as e-mail, text messages, instant messaging, and other forms of electronic communication, unless the court finds good cause. Permits additional discovery under specified conditions if the party seeking such additional discovery bears the costs, including reasonable attorney's fees.  Directs courts to award to the prevailing party reasonable costs and expenses, including attorney's fees, unless: (1) the position and conduct of the non-prevailing party were objectively reasonable and substantially justified, or (2) exceptional circumstances make such an award unjust. Allows the court, if the non-prevailing party is unable to pay such costs and expenses, to make the costs and expenses recoverable against interested parties.