Bill Text: IL SB2887 | 2015-2016 | 99th General Assembly | Introduced

---

Bill Title: Amends the Consumer Fraud and Deceptive Business Practices Act in relation to patent infringement claims. Provides that it is unlawful to make bad faith patent claims rather than to issue unfair or deceptive patent infringement demand letters. Defines terms. Provides that a target of a bad faith patent claim may obtain equitable relief, damages, costs, attorney's fees, and punitive damages. Provides that a target may seek to require the person making the patent infringement claim to post a bond. Sets forth criteria for determining whether a claim is a bad faith claim. Authorizes the Attorney General to bring an action to enjoin violations.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2016-04-22 - Rule 3-9(a) / Re-referred to Assignments [SB2887 Detail]

Download: Illinois-2015-SB2887-Introduced.html

---

99TH GENERAL ASSEMBLY State of Illinois 2015 and 2016 SB2887 Introduced 2/18/2016, by Sen. Ira I. Silverstein SYNOPSIS AS INTRODUCED:
815 ILCS 505/2SSS
Amends the Consumer Fraud and Deceptive Business Practices Act in relation to patent infringement claims. Provides that it is unlawful to make bad faith patent claims rather than to issue unfair or deceptive patent infringement demand letters. Defines terms. Provides that a target of a bad faith patent claim may obtain equitable relief, damages, costs, attorney's fees, and punitive damages. Provides that a target may seek to require the person making the patent infringement claim to post a bond. Sets forth criteria for determining whether a claim is a bad faith claim. Authorizes the Attorney General to bring an action to enjoin violations.
LRB099 19263 JLS 43655 b
A BILL FOR
SB2887 LRB099 19263 JLS 43655 b
AN ACT concerning business.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Consumer Fraud and Deceptive Business
Practices Act is amended by changing Section 2SSS as follows:
(815 ILCS 505/2SSS)
Sec. 2SSS. Bad faith Unfair or deceptive patent
infringement demand letters.
(a) As used in this Section:
"Demand letter" means a letter, an e-mail, or other written
communication asserting that a target has engaged in patent
infringement.
"Person" means a natural person, corporation, trust,
partnership, incorporated or unincorporated association, or
any other legal entity.
"Target" means a person:
(1) who has received a demand letter;
(2) against whom a lawsuit has been filed alleging
patent infringement; or
(3) whose customers have received a demand letter
asserting that the person's product, service, or
technology has infringed a patent.
(b) A person may not make a bad faith assertion of patent

SB2887 - 2 - LRB099 19263 JLS 43655 b
infringement against another person.
(c) A target may bring a civil action in circuit court
against a person who has made a bad faith assertion of patent
infringement against the target.
(d) In determining whether a person made a bad faith
assertion of patent infringement, the court may consider the
following factors as evidence that the person made a bad faith
assertion of patent infringement:
(1) The demand letter does not contain:
(A) the patent number;
(B) the name and address of the patent owner or
owners and assignee or assignees, if any; or
(C) factual allegations concerning the specific
areas in which the target's products, services, or
technology infringed the patent or are covered by the
claims in the patent;
(2) the demand letter does not contain the information
described in item (1), the target requested the
information, and the person did not provide the information
within a reasonable period of time;
(3) prior to sending the demand letter, the person
failed to conduct an analysis comparing the claims in the
patent to the target's products, services, or technology or
an analysis was done but does not identify specific areas
in which the products, services, or technology are covered
by the claims in the patent;

SB2887 - 3 - LRB099 19263 JLS 43655 b
(4) the demand letter includes a demand for payment of
a license fee or a response within an unreasonably short
period of time;
(5) the person offered to license the patent for an
amount that is not based on a reasonable estimate of the
value of the license;
(6) the person knew or should have known that the
assertion of patent infringement is meritless;
(7) the assertion of patent infringement is deceptive;
and
(8) the person or a subsidiary or affiliate of the
person previously filed or threatened to file a lawsuit
based on the same or similar claim of patent infringement
and:
(A) those threats or lawsuits lacked the
information described in item (1); or
(B) the person attempted to enforce the claim of
patent infringement in litigation and a court found the
claim to be meritless.
(e) The court may consider the following factors as
evidence that the person did not make a bad faith assertion of
patent infringement:
(1) the demand letter contains the information
described in item (1) of subsection (d);
(2) the demand letter does not contain the information
described in item (1) of subsection (d), the target

SB2887 - 4 - LRB099 19263 JLS 43655 b
requested the information, and the person provided the
information within a reasonable period of time;
(3) the person engaged in a good faith effort to
establish that the target infringed the patent and to
negotiate an appropriate remedy;
(4) the person made a substantial investment in the use
of the patent or in the production or sale of a product or
item covered by the patent;
(5) the person is:
(A) the inventor or joint inventor of the patent
or, in the case of a patent filed by and awarded to an
assignee of the original inventor or joint inventor, is
the original assignee; or
(B) an institution of higher education or a
technology transfer organization whose primary purpose
is to facilitate the commercialization of technologies
developed by an institution of higher education that is
owned by or affiliated with an institution of higher
education; and
(6) the person demonstrated good faith business
practices in previous efforts to enforce the patent or a
substantially similar patent or successfully enforced the
patent or a substantially similar patent through
litigation.
(f) The court may award the following remedies to a target
who prevails in an action brought pursuant to this Section:

SB2887 - 5 - LRB099 19263 JLS 43655 b
(1) equitable relief;
(2) damages;
(3) costs and fees, including reasonable attorney's
fees; and
(4) punitive damages in an amount equal to $50,000 or 3
times the total damages, costs, and fees, whichever is
greater.
(g) The Attorney General may bring an action to enjoin a
violation of this Section. A violation of this Section
constitutes an unlawful practice within the meaning of this
Act.
(h) When a target reasonably believes a person made a bad
faith assertion of patent infringement against the target, the
target may file a motion with the circuit court to require the
person to post a bond. If the circuit court finds the target
has established a reasonable likelihood that the person made a
bad faith assertion of patent infringement, the circuit court
shall require the person to post a bond in an amount equal to a
good faith estimate of the target's costs to litigate the claim
and amounts reasonably likely to be recovered under subsection
(f). The circuit court shall hold a hearing if requested by
either party. A bond ordered pursuant to this subsection may
not exceed $250,000. The circuit court may waive the bond
requirement if it finds the person has available assets equal
to the amount of the proposed bond or for other good cause
shown.

SB2887 - 6 - LRB099 19263 JLS 43655 b
(i) This Section does not apply to a demand letter or
assertion of patent infringement that includes a claim for
relief arising under 35 United States Code, Section 271(e)(2)
or 42 United States Code, Section 262.
"Affiliated person" means a person affiliated with the
intended recipient of a written or electronic communication.
"Intended recipient" means a person who purchases, rents,
leases, or otherwise obtains a product or service in the
commercial market that is not for resale in the commercial
market and that is, or later becomes, the subject of a patent
infringement allegation.
(b) It is an unlawful practice under this Act for a person,
in connection with the assertion of a United States patent, to
send or cause any person to send any written, including
electronic, communication that states that the intended
recipient or any affiliated person is infringing or has
infringed a patent and bears liability or owes compensation to
another person, if:
(1) the communication falsely threatens that
administrative or judicial relief will be sought if
compensation is not paid or the infringement issue is not
otherwise resolved;
(2) the communication falsely states that litigation
has been filed against the intended recipient or any
affiliated person;
(3) the assertions contained in the communication lack

SB2887 - 7 - LRB099 19263 JLS 43655 b
a reasonable basis in fact or law because:
(A) the person asserting the patent is not a
person, or does not represent a person, with the
current right to license the patent to or enforce the
patent against the intended recipient or any
affiliated person;
(B) the communication seeks compensation for a
patent that has been held to be invalid or
unenforceable in a final, unappealable or unappealed,
judicial or administrative decision; or
(C) the communication seeks compensation on
account of activities undertaken after the patent has
expired; or
(4) the content of the communication fails to include
information necessary to inform an intended recipient or
any affiliated person about the patent assertion by failing
to include the following:
(A) the identity of the person asserting a right to
license the patent to or enforce the patent against the
intended recipient or any affiliated person;
(B) the patent issued by the United States Patent
and Trademark Office alleged to have been infringed;
and
(C) the factual allegations concerning the
specific areas in which the intended recipient's or
affiliated person's products, services, or technology

SB2887 - 8 - LRB099 19263 JLS 43655 b
infringed the patent or are covered by the claims in
the patent.
(c) Nothing in this Section shall be construed to deem it
an unlawful practice for any person who owns or has the right
to license or enforce a patent to:
(1) advise others of that ownership or right of license
or enforcement;
(2) communicate to others that the patent is available
for license or sale;
(3) notify another of the infringement of the patent;
or
(4) seek compensation on account of past or present
infringement or for a license to the patent.
(Source: P.A. 98-1119, eff. 1-1-15; 99-78, eff. 7-20-15.)