Bill Text: FL S1298 | 2016 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Bad Faith Assertions of Patent Infringement

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2016-03-04 - Laid on Table, companion bill(s) passed, see CS/CS/HB 1181 (Ch. 2016-101) [S1298 Detail]

Download: Florida-2016-S1298-Introduced.html

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       Florida Senate - 2016                                    SB 1298
       
       
        
       By Senator Brandes
       
       22-01205A-16                                          20161298__
    1                        A bill to be entitled                      
    2         An act relating to bad faith assertions of patent
    3         infringement; amending s. 501.991, F.S.; providing for
    4         construction; amending s. 501.992, F.S; deleting and
    5         revising definitions; amending s. 501.993, F.S.;
    6         prohibiting a person from sending a demand letter to a
    7         target which makes a bad faith assertion of patent
    8         infringement; specifying what constitutes such a
    9         demand letter; repealing s. 501.994, F.S., relating to
   10         the requirement that a plaintiff post a specified bond
   11         in certain circumstances; amending s. 501.995, F.S.;
   12         specifying that the Patent Troll Prevention Act does
   13         not create a private right of action; deleting
   14         provisions authorizing the bringing of actions and
   15         specified remedies; amending s. 501.996, F.S.;
   16         providing for enforcement by the Attorney General;
   17         specifying that the Attorney General may seek certain
   18         civil relief; deleting a provision stating that a
   19         violation is an unfair or deceptive trade practice
   20         under ch. 501, F.S.; repealing s. 501.997, F.S.,
   21         relating to an exemption for institutions of higher
   22         learning; providing an effective date.
   23          
   24  Be It Enacted by the Legislature of the State of Florida:
   25  
   26         Section 1. Section 501.991, Florida Statutes, is amended to
   27  read:
   28         501.991 Legislative intent; construction.—
   29         (1) The Legislature recognizes that it is preempted from
   30  passing any law that conflicts with federal patent law. However,
   31  the Legislature recognizes that the state is dedicated to
   32  building an entrepreneurial and business-friendly economy where
   33  businesses and consumers alike are protected from abuse and
   34  fraud. This includes protection from abusive and bad faith
   35  demands and litigation.
   36         (2) Patents encourage research, development, and
   37  innovation. Patent holders have a legitimate right to enforce
   38  their patents. The Legislature does not wish to interfere with
   39  good faith patent litigation or the good faith enforcement of
   40  patents. However, the Legislature recognizes a growing issue:
   41  the frivolous filing of bad faith patent claims that have led to
   42  technical, complex, and especially expensive litigation.
   43         (3) The expense of patent litigation, which may cost
   44  millions of dollars, can be a significant burden on companies
   45  and small businesses. Not only do bad faith patent infringement
   46  claims impose undue burdens on individual businesses, they
   47  undermine the state’s effort to attract and nurture
   48  technological innovations. Funds spent to help avoid the threat
   49  of bad faith litigation are no longer available for serving
   50  communities through investing in producing new products, helping
   51  businesses expand, or hiring new workers. The Legislature wishes
   52  to help businesses avoid these costs by encouraging good faith
   53  assertions of patent infringement and the expeditious and
   54  efficient resolution of patent claims.
   55         (4) This part may not be construed to:
   56         (a) Limit the rights and remedies available to the state or
   57  a person under any other law;
   58         (b) Alter or restrict the Attorney General’s authority
   59  under any other law regarding claims of patent infringement; or
   60         (c) Prohibit a person who owns, or has a right to license
   61  or enforce, a patent from:
   62         1. Notifying other parties of such person’s ownership of,
   63  or rights under, the patent;
   64         2. Offering the patent to other parties for license or
   65  sale;
   66         3. Notifying other parties of such parties’ infringement of
   67  the patent as provided by 35 U.S.C. s. 287; or
   68         4. Seeking compensation for past or present infringement
   69  of, or license to, the patent.
   70         Section 2. Subsections (2) and (3) of section 501.992,
   71  Florida Statutes, are amended to read:
   72         501.992 Definitions.—As used in this part, the term:
   73         (2) “Institution of higher education” means an educational
   74  institution as defined in 20 U.S.C. s. 1001(a).
   75         (2)(3) “Target” means a person residing in, incorporated
   76  in, or organized under the laws of this state who purchases,
   77  rents, leases, or otherwise obtains a product or service in the
   78  commercial market which is not for resale in the commercial
   79  market and who:
   80         (a) Has received a demand letter or against whom a written
   81  assertion or allegation of patent infringement has been made; or
   82         (b) Has been threatened in writing with litigation or
   83  against whom a lawsuit has been filed alleging patent
   84  infringement.
   85         Section 3. Section 501.993, Florida Statutes, is amended to
   86  read:
   87         501.993 Bad faith assertions of patent infringement.—A
   88  person may not send a demand letter to a target which makes make
   89  a bad faith assertion of patent infringement. A demand letter
   90  makes a bad faith assertion of patent infringement if it:
   91         (1) Includes a claim that the target, or a person
   92  affiliated with the target, has infringed a patent and that the
   93  target is legally liable for such infringement; and A court may
   94  consider the following factors as evidence that a person has
   95  made a bad faith assertion of patent infringement:
   96         (a) The demand letter does not contain the following
   97  information:
   98         1. The patent number;
   99         2. The name and address of the patent owner and assignee,
  100  if any; and
  101         3. Factual allegations concerning the specific areas in
  102  which the target’s products, services, or technology infringe or
  103  are covered by the claims in the patent.
  104         (b)  Before sending the demand letter, the person failed to
  105  conduct an analysis comparing the claims in the patent to the
  106  target’s products, services, or technology, or the analysis did
  107  not identify specific areas in which the target’s products,
  108  services, and technology were covered by the claims of the
  109  patent.
  110         (c)  The demand letter lacked the information listed under
  111  paragraph (a), the target requested the information, and the
  112  person failed to provide the information within a reasonable
  113  period.
  114         (d) The demand letter requested payment of a license fee or
  115  response within an unreasonable period.
  116         (e) The person offered to license the patent for an amount
  117  that is not based on a reasonable estimate of the value of the
  118  license.
  119         (f) The claim or assertion of patent infringement is
  120  unenforceable, and the person knew, or should have known, that
  121  the claim or assertion was unenforceable.
  122         (g) The claim or assertion of patent infringement is
  123  deceptive.
  124         (h) The person, including its subsidiaries or affiliates,
  125  has previously filed or threatened to file one or more lawsuits
  126  based on the same or a similar claim of patent infringement and:
  127         1. The threats or lawsuits lacked the information listed
  128  under paragraph (a); or
  129         2. The person sued to enforce the claim of patent
  130  infringement and a court found the claim to be meritless.
  131         (i) Any other factor the court finds relevant.
  132         (2) Meets one or more of the following criteria A court may
  133  consider the following factors as evidence that a person has not
  134  made a bad faith assertion of patent infringement:
  135         (a) The demand letter falsely asserts that the sender has
  136  filed a lawsuit in connection with the claim contained the
  137  information listed under paragraph (1)(a).
  138         (b) The demand letter asserts a claim that is objectively
  139  baseless due to any of the following:
  140         1. The sender, or a person whom the sender represents,
  141  lacks a current right to license the patent to, or enforce the
  142  patent against, the target.
  143         2. The patent is invalid or unenforceable pursuant to a
  144  final judgment or an administrative order.
  145         3. The infringing activity alleged in the demand letter
  146  occurred after the expiration of the patent The demand letter
  147  did not contain the information listed under paragraph (1)(a),
  148  the target requested the information, and the person provided
  149  the information within a reasonable period.
  150         (c) The demand letter is likely to materially mislead a
  151  reasonable person because it does not contain sufficient
  152  information to inform the target of all of the following:
  153         1. The identity of the person asserting the claim.
  154         2. The patent alleged to have been infringed.
  155         3. At least one product, service, or technology of the
  156  target alleged to infringe the patent, or at least one activity
  157  of the end user which is alleged to infringe the patent The
  158  person engaged in a good faith effort to establish that the
  159  target has infringed the patent and negotiated an appropriate
  160  remedy.
  161         (d) The person made a substantial investment in the use of
  162  the patented invention or discovery or in a product or sale of a
  163  product or item covered by the patent.
  164         (e) The person is the inventor or joint inventor of the
  165  patented invention or discovery, or in the case of a patent
  166  filed by and awarded to an assignee of the original inventor or
  167  joint inventors, is the original assignee.
  168         (f) The person has:
  169         1. Demonstrated good faith business practices in previous
  170  efforts to enforce the patent, or a substantially similar
  171  patent; or
  172         2. Successfully enforced the patent, or a substantially
  173  similar patent, through litigation.
  174         (g) Any other factor the court finds relevant.
  175         Section 4. Section 501.994, Florida Statutes, is repealed.
  176         Section 5. Section 501.995, Florida Statutes, is amended to
  177  read:
  178         501.995 No private right of action.—This part does not
  179  create a private right of action. A person aggrieved by a
  180  violation of this part may bring an action in a court of
  181  competent jurisdiction. A court may award the following remedies
  182  to a prevailing plaintiff in an action brought pursuant to this
  183  section:
  184         (1) Equitable relief;
  185         (2) Damages;
  186         (3) Costs and fees, including reasonable attorney fees; and
  187         (4) Punitive damages in an amount equal to $50,000 or three
  188  times the total damages, costs, and fees, whichever is greater.
  189         Section 6. Section 501.996, Florida Statutes, is amended to
  190  read:
  191         501.996 Enforcement by Attorney General; injunction; civil
  192  penalty.—Notwithstanding any other provisions of this chapter,
  193  if the Attorney General has reasonable cause to believe that a
  194  person is in violation of s. 501.993, he or she may bring an
  195  action to enjoin the person from engaging in the violation,
  196  continuing the violation, or committing any act in furtherance
  197  of the violation. The Attorney General may also seek other
  198  appropriate civil relief, including, but not limited to:
  199         (1) The imposition of a civil penalty of up to $50,000 for
  200  each violation of s. 501.993;
  201         (2) Court costs, reasonable attorney fees, and reasonable
  202  costs of investigation; and
  203         (3) Restitution to a target for damages, court costs,
  204  attorney fees, and other reasonable expenses related to
  205  defending against the bad faith assertion of patent infringement
  206  A violation of this part is an unfair or deceptive trade
  207  practice under part II of this chapter.
  208         Section 7. Section 501.997, Florida Statutes, is repealed.
  209         Section 8. This act shall take effect July 1, 2016.