Can a state use consumer protection laws to punish patent trolls?
The Washington State Senate Law and Justice Committee is considering penalizing patent trolling. The committee recently discussed a proposed ‘patent troll prevention act’ in a work session on October 2, 2014. The bill in its current form would create a new consumer protection law to fine patent infringement in bad faith. Violators could face a fine of up to $25,000.
The bill outlines a number of factors that a court may consider in determining whether an assertion of patent infringement has been made in bad faith. For example, bad faith may be shown when a person asserting the claim: should have known the assertion was meritless, provides inadequate information in the initial demand letter, or fails to provide basic patent information on request. A court may also consider the reasonableness of the asserting party’s diligence in comparing the ‘infringing’ activity and the patent, and the reasonableness of proposed licensing fees or timeframes. The bill also lists factors which indicate good faith, including diligence, timeliness, and reasonableness. It also names three types of patent holders that are presumed to act in good faith: an investor in the patent, an original assignee, or a university. Continue reading