Patent Litigation and Innovation Act of 2013

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Patent Litigation and Innovation 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 the 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) the identity of any person, other than the party 
        alleging infringement, who is known to the party alleging 
        infringement, and 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); and
            ``(10) the identity of any person, other than the party 
        alleging infringement, who is known to the party alleging 
        infringement, and who has a legal or financial right to enforce 
        a patent identified under paragraph (1).''.
    (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 
the 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 (9) or 
                (10) 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 files 
        the motion to join within 120 days after the first complaint, 
        answer, or counterclaim and 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. STAY OF ACTION AGAINST SECONDARY PARTIES.

    (a) In General.--Chapter 29 of title 35, United States Code, is 
amended by adding at the end the following:
``Sec. 300. Stay of action against secondary parties
    ``(a) Stay of Action.--
            ``(1) In general.--In any civil action arising under any 
        Act of Congress relating to patents, the court shall grant a 
        motion to stay all or part of the action as to a secondary 
        party with respect to infringement related to a primary party 
        in the same or another action concerning the same apparatus, 
        product, feature, device, method, system, process, function, 
        act, service, or other instrumentality, in whole or in relevant 
        part, of the disputed patent of the primary party, if--
                    ``(A) the primary and secondary parties consent to 
                the stay in writing;
                    ``(B) the motion is filed not later than 120 days 
                after service of the first complaint in the action of 
                the primary party that is asserted as the basis for the 
                secondary party's alleged infringement; and
                    ``(C) the secondary party agrees to be bound by any 
                judgment entered against the primary party to the same 
                extent as such primary party may be bound with respect 
                to issues that the primary and secondary parties have 
                in common.
            ``(2) Treatment of secondary party.--During a stay under 
        paragraph (1), the secondary party shall be treated as a 
        nonparty to the action against the primary party for purposes 
        of discovery, hearings, trial, or otherwise. The stay shall 
        continue until such time that a final adjudication in the 
        action against the primary party has been entered and all 
        appeals thereof exhausted.
    ``(b) Other Authority Not Affected.--Nothing in this section shall 
be construed as abrogating a court's discretion to grant any stay or 
expand any stay granted pursuant to this section where otherwise 
permitted by law.
    ``(c) Definitions.--In this section:
            ``(1) Primary party.--The term `primary party' means a 
        person who manufacturers or supplies, or causes the manufacture 
        or supply of, an apparatus, product, feature, device, method, 
        system, process, function, act, service, or other 
        instrumentality, in whole or in material part--
                    ``(A) that is alleged to infringe a patent in 
                dispute; or
                    ``(B) that uses a process alleged to infringe a 
                patent in dispute.
            ``(2) Secondary party.--The term `secondary party' means a 
        party accused of infringing a patent in dispute based on the 
        use, distribution, resale, or consumption of a product or 
        process by a primary party.''.
    (b) Conforming Amendment.--The table of sections for chapter 29 of 
title 35, United States Code, is amended by adding at the end the 
following:

``300. Stay of action against secondary parties.''.

SEC. 5. STAY OF DISCOVERY.

    (a) In General.--Chapter 29 of title 35, United States Code, is 
amended by adding at the end the following:
``Sec. 300A. Stay of discovery in patent infringement suits
    ``(a) In General.--Except as provided in subsections (b) and (c), 
in a civil action arising under any Act of Congress relating to 
patents--
            ``(1) the court shall stay discovery until after the court 
        has ruled on--
                    ``(A) any motion to dismiss the action; and
                    ``(B) any motion to transfer venue of the action; 
                and
            ``(2) if the court determines that a ruling relating to the 
        construction of terms used in a patent claim asserted in the 
        complaint in the action is required, the court shall stay 
        discovery until after the court has made the ruling.
    ``(b) Exception.--Notwithstanding subsection (a), the court may, in 
an action described in that subsection, allow discovery to the extent 
necessary for the court to make the ruling under paragraph (1) or (2) 
of that subsection, as the case may be.
    ``(c) Discretion To Expand Scope of Discovery in Extraordinary 
Circumstances.--If, under any provision of Federal law (including the 
Drug Price Competition and Patent Term Restoration Act (Public Law 98-
417)), the court determines that extraordinary circumstances exist 
because 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 subsection (b) before the ruling described in subsection (b) as 
necessary to ensure timely resolution of the action.
    ``(d) Preservation of Evidence.--
            ``(1) In general.--During the pendency of any stay of 
        discovery under this section, unless otherwise ordered by the 
        court, any party to the action with actual notice of the 
        allegations contained in the complaint shall treat all 
        documents, data compilations (including electronically recorded 
        or stored data), and tangible objects that are in the custody 
        or control of such person and that are relevant to the 
        allegations, as if they were the subject of a continuing 
        request for production of documents from an opposing party 
        under the Federal Rules of Civil Procedure.
            ``(2) Sanction for willful violation.--A party aggrieved by 
        the willful failure of an opposing party to comply with 
        paragraph (1) may apply to the court for an order awarding 
        appropriate sanctions.''.
    (b) Conforming Amendment.--The table of sections for chapter 29 of 
title 35, United States Code, is amended by adding at the end the 
following:

``300A. Stay of discovery in patent infringement suits.''.

SEC. 6. SANCTIONS FOR ABUSIVE LITIGATION.

    (a) In General.--Chapter 29 of title 35, United States Code, is 
amended by adding at the end the following:
``Sec. 300B. Sanctions for abusive litigation
    ``(a) Mandatory Review by Court.--In any civil action arising under 
any Act of Congress relating to patents, upon final adjudication of the 
action, the court shall include in the record specific findings 
regarding compliance by each party and each attorney representing any 
party with each requirement of Rule 11(b) of the Federal Rules of Civil 
Procedure as to any complaint, responsive pleading, or dispositive 
motion.
    ``(b) Sanctions.--If the court makes a finding under subsection (a) 
that a party or attorney violated any requirement of Rule 11(b) of the 
Federal Rules of Civil Procedure as to any complaint, responsive 
pleading, or dispositive motion, the court may impose sanctions on such 
party or attorney in accordance with Rule 11 of the Federal Rules of 
Civil Procedure. Before making a finding that any party or attorney has 
violated Rule 11 of the Federal Rules of Civil Procedure, the court 
shall give such party or attorney notice and an opportunity to 
respond.''.
    (b) Conforming Amendments.--
            (1) Table of contents.--The table of sections for chapter 
        29 of title 35, United States Code, is amended by adding at the 
        end the following:

``300B. Sanctions for abusive litigation.''.
            (2) Award of attorneys fees in exceptional cases.--Section 
        285 of title 35, United States Code, is amended by striking 
        ``The court'' and inserting ``Subject to section 300B(b), the 
        court''.

SEC. 7. EFFECTIVE DATE.

    This Act and the amendments made by this Act shall apply to civil 
actions commenced on or after the date of the enactment of this Act.

Summary: Patent Litigation and Innovation 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 the direct infringement, any person alleged to be a direct infringer known to the party alleging infringement, and 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; and  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 or financial right to enforce an identified patent.   Sets forth procedures with respect to the joinder of parties, stays of action against secondary parties (parties accused of infringing a patent in dispute based on the use, distribution, resale, or consumption of a product or process by a primary party), and stays of discovery until the court has ruled on any motions to dismiss or transfer venue. Permits the court to expand discovery in extraordinary circumstances.  Directs the court, upon final adjudication, to include in the record specific findings on the compliance by each party and attorney with Federal Rules of Civil Procedure addressing proper representations to the court, including findings that motions and pleading were not presented to harass, delay, or increase litigation costs and that claims were nonfrivolous and based on evidentiary support. Authorizes sanctions for: (1) a willful failure to preserve evidence during a stay of discovery, and (2) a violation of the representation to the court rules.