Bill Text: FL S1298 | 2016 | Regular Session | Comm Sub

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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-Comm_Sub.html

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       Florida Senate - 2016                             CS for SB 1298
       
       
        
       By the Committee on Judiciary; and Senator Brandes
       
       590-03683-16                                          20161298c1
    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; revising
    5         definitions; amending s. 501.993, F.S.; prohibiting a
    6         person from sending a demand letter to a target which
    7         makes a bad faith assertion of patent infringement;
    8         specifying what constitutes such a demand letter;
    9         repealing s. 501.994, F.S., relating to the
   10         requirement that a plaintiff post a specified bond in
   11         certain circumstances; amending s. 501.995, F.S.;
   12         revising provisions authorizing the bringing of
   13         actions and specified remedies under the Patent Troll
   14         Prevention Act; providing an effective date.
   15          
   16  Be It Enacted by the Legislature of the State of Florida:
   17  
   18         Section 1. Section 501.991, Florida Statutes, is amended to
   19  read:
   20         501.991 Legislative intent; construction.—
   21         (1) The Legislature recognizes that it is preempted from
   22  passing any law that conflicts with federal patent law. However,
   23  the Legislature recognizes that the state is dedicated to
   24  building an entrepreneurial and business-friendly economy where
   25  businesses and consumers alike are protected from abuse and
   26  fraud. This includes protection from abusive and bad faith
   27  demands and litigation.
   28         (2) Patents encourage research, development, and
   29  innovation. Patent holders have a legitimate right to enforce
   30  their patents. The Legislature does not wish to interfere with
   31  good faith patent litigation or the good faith enforcement of
   32  patents. However, the Legislature recognizes a growing issue:
   33  the frivolous filing of bad faith patent claims that have led to
   34  technical, complex, and especially expensive litigation.
   35         (3) The expense of patent litigation, which may cost
   36  millions of dollars, can be a significant burden on companies
   37  and small businesses. Not only do bad faith patent infringement
   38  claims impose undue burdens on individual businesses, they
   39  undermine the state’s effort to attract and nurture
   40  technological innovations. Funds spent to help avoid the threat
   41  of bad faith litigation are no longer available for serving
   42  communities through investing in producing new products, helping
   43  businesses expand, or hiring new workers. The Legislature wishes
   44  to help businesses avoid these costs by encouraging good faith
   45  assertions of patent infringement and the expeditious and
   46  efficient resolution of patent claims.
   47         (4) This part may not be construed to:
   48         (a) Limit the rights and remedies available to the state or
   49  a person under any other law;
   50         (b) Alter or restrict the Attorney General’s authority
   51  under any other law regarding claims of patent infringement; or
   52         (c) Prohibit a person who owns, or has a right to license
   53  or enforce, a patent from:
   54         1. Notifying other parties of such person’s ownership of,
   55  or rights under, the patent;
   56         2. Offering the patent to other parties for license or
   57  sale;
   58         3. Notifying other parties of such parties’ infringement of
   59  the patent as provided by 35 U.S.C. s. 287; or
   60         4. Seeking compensation for past or present infringement
   61  of, or license to, the patent.
   62         Section 2. Subsections (1) and (3) of section 501.992,
   63  Florida Statutes, are amended to read:
   64         501.992 Definitions.—As used in this part, the term:
   65         (1) “Demand letter” means a letter, e-mail, or other
   66  written communication, including e-mail, asserting or claiming
   67  that a person has engaged in patent infringement.
   68         (3) “Target” means a person residing in, incorporated in,
   69  or organized under the laws of this state who purchases, rents,
   70  leases, or otherwise obtains a product or service in the
   71  commercial market which is not for resale in the commercial
   72  market and who:
   73         (a) Has received a demand letter or against whom a written
   74  assertion or allegation of patent infringement has been made; or
   75         (b) Has been threatened in writing with litigation or
   76  against whom a lawsuit has been filed alleging patent
   77  infringement.
   78         Section 3. Section 501.993, Florida Statutes, is amended to
   79  read:
   80         501.993 Bad faith assertions of patent infringement.—A
   81  person may not send a demand letter to a target which makes make
   82  a bad faith assertion of patent infringement. A demand letter
   83  makes a bad faith assertion of patent infringement if it:
   84         (1) Includes a claim that the target, or a person
   85  affiliated with the target, has infringed a patent and that the
   86  target is legally liable for such infringement; and A court may
   87  consider the following factors as evidence that a person has
   88  made a bad faith assertion of patent infringement:
   89         (a) The demand letter does not contain the following
   90  information:
   91         1. The patent number;
   92         2. The name and address of the patent owner and assignee,
   93  if any; and
   94         3. Factual allegations concerning the specific areas in
   95  which the target’s products, services, or technology infringe or
   96  are covered by the claims in the patent.
   97         (b) Before sending the demand letter, the person failed to
   98  conduct an analysis comparing the claims in the patent to the
   99  target’s products, services, or technology, or the analysis did
  100  not identify specific areas in which the target’s products,
  101  services, and technology were covered by the claims of the
  102  patent.
  103         (c) The demand letter lacked the information listed under
  104  paragraph (a), the target requested the information, and the
  105  person failed to provide the information within a reasonable
  106  period.
  107         (d) The demand letter requested payment of a license fee or
  108  response within an unreasonable period.
  109         (e) The person offered to license the patent for an amount
  110  that is not based on a reasonable estimate of the value of the
  111  license.
  112         (f) The claim or assertion of patent infringement is
  113  unenforceable, and the person knew, or should have known, that
  114  the claim or assertion was unenforceable.
  115         (g) The claim or assertion of patent infringement is
  116  deceptive.
  117         (h) The person, including its subsidiaries or affiliates,
  118  has previously filed or threatened to file one or more lawsuits
  119  based on the same or a similar claim of patent infringement and:
  120         1. The threats or lawsuits lacked the information listed
  121  under paragraph (a); or
  122         2. The person sued to enforce the claim of patent
  123  infringement and a court found the claim to be meritless.
  124         (i) Any other factor the court finds relevant.
  125         (2) Meets one or more of the following criteria A court may
  126  consider the following factors as evidence that a person has not
  127  made a bad faith assertion of patent infringement:
  128         (a) The demand letter falsely asserts that the sender has
  129  filed a lawsuit in connection with the claim contained the
  130  information listed under paragraph (1)(a).
  131         (b) The demand letter asserts a claim that is objectively
  132  baseless due to any of the following:
  133         1. The sender, or a person whom the sender represents,
  134  lacks a current right to license the patent to, or enforce the
  135  patent against, the target.
  136         2. The patent is invalid or unenforceable pursuant to a
  137  final judgment or an administrative order.
  138         3. The infringing activity alleged in the demand letter
  139  occurred after the expiration of the patent The demand letter
  140  did not contain the information listed under paragraph (1)(a),
  141  the target requested the information, and the person provided
  142  the information within a reasonable period.
  143         (c) The demand letter is likely to materially mislead a
  144  reasonable person because it does not contain sufficient
  145  information to inform the target of all of the following:
  146         1. The identity of the person asserting the claim,
  147  including the name and address of such person.
  148         2. The patent alleged to have been infringed, including the
  149  patent number of such patent.
  150         3. At least one product, service, or technology of the
  151  target alleged to infringe the patent, or at least one activity
  152  of the target which is alleged to infringe the patent The person
  153  engaged in a good faith effort to establish that the target has
  154  infringed the patent and negotiated an appropriate remedy.
  155         (d) The person made a substantial investment in the use of
  156  the patented invention or discovery or in a product or sale of a
  157  product or item covered by the patent.
  158         (e) The person is the inventor or joint inventor of the
  159  patented invention or discovery, or in the case of a patent
  160  filed by and awarded to an assignee of the original inventor or
  161  joint inventors, is the original assignee.
  162         (f) The person has:
  163         1. Demonstrated good faith business practices in previous
  164  efforts to enforce the patent, or a substantially similar
  165  patent; or
  166         2. Successfully enforced the patent, or a substantially
  167  similar patent, through litigation.
  168         (g) Any other factor the court finds relevant.
  169         Section 4. Section 501.994, Florida Statutes, is repealed.
  170         Section 5. Section 501.995, Florida Statutes, is amended to
  171  read:
  172         501.995 Private right of action.—A person aggrieved by a
  173  violation of this part may bring an action in a court of
  174  competent jurisdiction. A court may award the following remedies
  175  to a prevailing plaintiff in an action brought pursuant to this
  176  section:
  177         (1) Equitable relief;
  178         (2) Actual damages;
  179         (3) Costs and fees, including reasonable attorney fees; and
  180         (4) Punitive damages in an amount not to exceed $75,000.
  181  However, such punitive damages may only be awarded if the court
  182  determines that the person asserting the patent infringement
  183  claim has repeatedly violated this chapter Punitive damages in
  184  an amount equal to $50,000 or three times the total damages,
  185  costs, and fees, whichever is greater.
  186         Section 6. This act shall take effect upon becoming a law.
  187