When calculating damages, courts should be required to focus on the value that is attributable to the patent in question, and not on the full value of the entire product. The current system encourages patent owners to seek settlements that far exceed the value of the patent's contribution. The holder of a patent for a windshield wiper should not be awarded damages equal to the value of an entire car. The amount of money potentially at stake in the litigation as a result of this approach creates huge pressure on the defendant to settle regardless of the strength of the infringement claim.

The standards for assessing "willful infringement" - which can trigger a tripling of ordinary damages - should be reformed. Willful infringement damages should only be awarded in situations of truly egregious conduct. Under current rules it is easy for plaintiffs to allege that defendants knowingly infringed on a patent. Conversely, it is difficult, time-consuming and exceptionally expensive to prove that willful infringement did not occur. Reform of both the willfulness standard and the procedure for litigating willfulness claims is essential to restore balance in the litigation process.

Improving the existing process for challenging questionable patents will lead to better patent quality and will benefit everyone - patent holders, patent users and consumers. Allowing third parties to institute a reexamination early in the process will clarify the breadth and applicability of these patents, thereby leading to fewer later challenges. Patent reform legislation should establish a new administrative procedure for review of patent decisions so that wrongfully-issued patents can be effectively reviewed and redressed within the USPTO, rather than in the courts.

Venue standards should be designed to preclude "gaming the system" through "forum-shopping." Lawsuits should be resolved in a forum that has a connection to the underlying claim. In eBay v. MercExchange, the Supreme Court ruled that injunctions were to be determined by the district courts. But allowing "venue shopping" preserves a loophole that allows plaintiffs to choose courts that are most likely to issue injunctions and deliver disproportionate damages.