Bill Text: FL S1084 | 2015 | Regular Session | Comm Sub

---

Bill Title: Patent Infringement

Spectrum: Bipartisan Bill

Status: (Failed) 2015-05-01 - Died in Appropriations Subcommittee on Criminal and Civil Justice, companion bill(s) passed, see CS/CS/CS/HB 439 (Ch. 2015-92) [S1084 Detail]

Download: Florida-2015-S1084-Comm_Sub.html

---

       Florida Senate - 2015                             CS for SB 1084
       
       
        
       By the Committee on Judiciary; and Senator Brandes
       
       
       
       
       
       590-03275-15                                          20151084c1
    1                        A bill to be entitled                      
    2         An act relating to patent infringement; creating part
    3         VII of ch. 501, F.S., entitled the “Patent Troll
    4         Prevention Act”; creating s. 501.991, F.S.; providing
    5         legislative intent; creating s. 501.992, F.S.;
    6         defining terms; creating s. 501.993, F.S.; prohibiting
    7         bad faith assertions of patent infringement from being
    8         made; providing factors that a court may consider when
    9         determining whether an allegation was or was not made
   10         in bad faith; creating s. 501.994, F.S.; authorizing a
   11         court to require a patent infringement plaintiff to
   12         post a bond under certain circumstances; limiting the
   13         bond amount; authorizing the court to waive the bond
   14         requirement in certain circumstances; creating s.
   15         501.995, F.S.; authorizing private rights of action
   16         for violations of this part; authorizing the court to
   17         award certain relief to prevailing plaintiffs;
   18         creating s. 501.996, F.S.; requiring a bad faith
   19         assertion of patent infringement to be treated as an
   20         unfair or deceptive trade practice; creating s.
   21         501.997, F.S.; providing exemptions; providing an
   22         effective date.
   23          
   24  Be It Enacted by the Legislature of the State of Florida:
   25  
   26         Section 1. Part VII of chapter 501, Florida Statutes,
   27  consisting of ss. 501.991-501.997, Florida Statutes, is created
   28  and is entitled the “Patent Troll Prevention Act.”
   29         Section 2. Section 501.991, Florida Statutes, is created to
   30  read:
   31         501.991 Legislative intent.—
   32         (1) The Legislature recognizes that it is preempted from
   33  passing any law that conflicts with federal patent law. However,
   34  the Legislature recognizes that the state is dedicated to
   35  building an entrepreneurial and business-friendly economy where
   36  businesses and consumers alike are protected from abuse and
   37  fraud. This includes protection from abusive and bad faith
   38  demands and litigation.
   39         (2) Patents encourage research, development, and
   40  innovation. Patent holders have a legitimate right to enforce
   41  their patents. The Legislature does not wish to interfere with
   42  good faith patent litigation or the good faith enforcement of
   43  patents. However, the Legislature recognizes a growing issue:
   44  the frivolous filing of bad faith patent claims that have led to
   45  technical, complex, and especially expensive litigation.
   46         (3) The expense of patent litigation, which may cost
   47  millions of dollars, can be a significant burden on companies
   48  and small businesses. Not only do bad faith patent infringement
   49  claims impose undue burdens on individual businesses, they
   50  undermine the state’s effort to attract and nurture
   51  technological innovations. Funds spent to help avoid the threat
   52  of bad faith litigation are no longer available for serving
   53  communities through investing in producing new products, helping
   54  businesses expand, or hiring new workers. The Legislature wishes
   55  to help its businesses avoid these costs by encouraging good
   56  faith assertions of patent infringement and the expeditious and
   57  efficient resolution of patent claims.
   58         Section 3. Section 501.992, Florida Statutes, is created to
   59  read:
   60         501.992 Definitions.—As used in this part, the term:
   61         (1) “Demand letter” means a letter, e-mail, or other
   62  communication asserting or claiming that a person has engaged in
   63  patent infringement.
   64         (2) “Institution of higher education” means an educational
   65  institution as defined in 20 U.S.C. s. 1001(a).
   66         (3) “Target” means a person, including the person’s
   67  customers, distributors, or agents, residing in, incorporated
   68  in, or organized under the laws of this state which:
   69         (a) Has received a demand letter or against whom an
   70  assertion or allegation of patent infringement has been made;
   71         (b) Has been threatened with litigation or against whom a
   72  lawsuit has been filed alleging patent infringement; or
   73         (c) Whose customers have received a demand letter asserting
   74  that the person’s product, service, or technology has infringed
   75  upon a patent.
   76         Section 4. Section 501.993, Florida Statutes, is created to
   77  read:
   78         501.993 Bad faith assertions of patent infringement.—A
   79  person may not make a bad faith assertion of patent
   80  infringement.
   81         (1) A court may consider the following factors as evidence
   82  that a person has made a bad faith assertion of patent
   83  infringement:
   84         (a) The demand letter does not contain the following
   85  information:
   86         1. The patent number;
   87         2. The name and address of the patent owner and assignee,
   88  if any; and
   89         3. Factual allegations concerning the specific areas in
   90  which the target’s products, services, or technology infringe or
   91  are covered by the claims in the patent.
   92         (b) Before sending the demand letter, the person failed to
   93  conduct an analysis comparing the claims in the patent to the
   94  target’s products, services, or technology, or the analysis did
   95  not identify specific areas in which the target’s products,
   96  services, and technology were covered by the claims of the
   97  patent.
   98         (c) The demand letter lacked the information listed under
   99  paragraph (a), the target requested the information, and the
  100  person failed to provide the information within a reasonable
  101  period of time.
  102         (d) The demand letter requested payment of a license fee or
  103  response within an unreasonable period of time.
  104         (e) The person offered to license the patent for an amount
  105  that is not based on a reasonable estimate of the value of the
  106  license.
  107         (f) The claim or assertion of patent infringement is
  108  unenforceable, and the person knew, or should have known, that
  109  the claim or assertion was unenforceable.
  110         (g) The claim or assertion of patent infringement is
  111  deceptive.
  112         (h) The person, including its subsidiaries or affiliates,
  113  has previously filed or threatened to file one or more lawsuits
  114  based on the same or a similar claim of patent infringement and:
  115         1. The threats or lawsuits lacked the information listed
  116  under paragraph (a); or
  117         2. The person sued to enforce the claim of patent
  118  infringement and a court found the claim to be meritless.
  119         (i) Any other factor the court finds relevant.
  120         (2) A court may consider the following factors as evidence
  121  that a person has not made a bad faith assertion of patent
  122  infringement:
  123         (a) The demand letter contained the information listed
  124  under paragraph (1)(a).
  125         (b) The demand letter did not contain the information
  126  listed under paragraph (1)(a), the target requested the
  127  information, and the person provided the information within a
  128  reasonable period of time.
  129         (c) The person engaged in a good faith effort to establish
  130  that the target has infringed the patent and negotiated an
  131  appropriate remedy.
  132         (d) The person made a substantial investment in the use of
  133  the patented invention or discovery or in a product or sale of a
  134  product or item covered by the patent.
  135         (e) The person is:
  136         1. The inventor or joint inventor of the patented invention
  137  or discovery, or in the case of a patent filed by and awarded to
  138  an assignee of the original inventor or joint inventors, is the
  139  original assignee; or
  140         2. An institution of higher education or a technology
  141  transfer organization owned by or affiliated with an institution
  142  of higher education.
  143         (f) The person has:
  144         1. Demonstrated good faith business practices in previous
  145  efforts to enforce the patent, or a substantially similar
  146  patent; or
  147         2. Successfully enforced the patent, or a substantially
  148  similar patent, through litigation.
  149         (g) Any other factor the court finds relevant.
  150         Section 5. Section 501.994, Florida Statutes, is created to
  151  read:
  152         501.994 Bond.—If a person initiates a proceeding against a
  153  target in a court of competent jurisdiction, the target may move
  154  that the proceeding involves a bad faith assertion of patent
  155  infringement in violation of this part and request that the
  156  court issue a protective order. After the motion, and if the
  157  court finds that the target has established a reasonable
  158  likelihood that the plaintiff has made a bad faith assertion of
  159  patent infringement, the court must require the plaintiff to
  160  post a bond in an amount equal to the lesser of $250,000 or a
  161  good faith estimate of the target’s expense of litigation,
  162  including an estimate of reasonable attorney fees, conditioned
  163  on payment of any amount finally determined to be due to the
  164  target. The court shall hold a hearing at either party’s
  165  request. A court may waive the bond requirement for good cause
  166  shown or if it finds the plaintiff has available assets equal to
  167  the amount of the proposed bond.
  168         Section 6. Section 501.995, Florida Statutes, is created to
  169  read:
  170         501.995 Private right of action.—A person aggrieved by a
  171  violation of this part may bring an action in a court of
  172  competent jurisdiction. A court may award the following remedies
  173  to a prevailing plaintiff in an action brought pursuant to this
  174  section:
  175         (1) Equitable relief;
  176         (2) Damages;
  177         (3) Costs and fees, including reasonable attorney fees; and
  178         (4) Punitive damages in an amount equal to $50,000 or three
  179  times the total damages, costs, and fees, whichever is greater.
  180         Section 7. Section 501.996, Florida Statutes, is created to
  181  read:
  182         501.996 Enforcement.—A violation of this part is an unfair
  183  or deceptive trade practice in any action brought by an
  184  enforcing authority pursuant to s. 501.207. For the purposes of
  185  this section, the term “enforcing authority” has the same
  186  meaning as provided in s. 501.203.
  187         Section 8. Section 501.997, Florida Statutes, is created to
  188  read:
  189         501.997 Exemptions.—This part does not apply to
  190  institutions of higher education, to a technology transfer
  191  organization owned by or affiliated with an institution of
  192  higher education, or to a demand letter or an assertion of
  193  patent infringement that includes a claim for relief arising
  194  under 35 U.S.C. s. 271(e)(2) or 42 U.S.C. s. 262.
  195         Section 9. This act shall take effect upon becoming a law.