Florida Senate - 2015                        COMMITTEE AMENDMENT
       Bill No. SB 1362
       
       
       
       
       
       
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                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                   Comm: WD            .                                
                  04/15/2015           .                                
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       The Committee on Appropriations (Richter) recommended the
       following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Between lines 163 and 164
    4  insert:
    5         Section 6. The Division of Law Revision and Information is
    6  directed to create part VII of chapter 501, Florida Statutes,
    7  consisting of ss. 501.991-501.997, Florida Statutes, to be
    8  entitled the “Patent Troll Prevention Act.”
    9         Section 7. Section 501.991, Florida Statutes, is created to
   10  read:
   11         501.991 Legislative intent.—
   12         (1) The Legislature recognizes that it is preempted from
   13  passing any law that conflicts with federal patent law. However,
   14  the Legislature recognizes that the state is dedicated to
   15  building an entrepreneurial and business-friendly economy where
   16  businesses and consumers alike are protected from abuse and
   17  fraud. This includes protection from abusive and bad faith
   18  demands and litigation.
   19         (2) Patents encourage research, development, and
   20  innovation. Patent holders have a legitimate right to enforce
   21  their patents. The Legislature does not wish to interfere with
   22  good faith patent litigation or the good faith enforcement of
   23  patents. However, the Legislature recognizes a growing issue:
   24  the frivolous filing of bad faith patent claims that have led to
   25  technical, complex, and especially expensive litigation.
   26         (3) The expense of patent litigation, which may cost
   27  millions of dollars, can be a significant burden on companies
   28  and small businesses. Not only do bad faith patent infringement
   29  claims impose undue burdens on individual businesses, they
   30  undermine the state’s effort to attract and nurture
   31  technological innovations. Funds spent to help avoid the threat
   32  of bad faith litigation are no longer available for serving
   33  communities through investing in producing new products, helping
   34  businesses expand, or hiring new workers. The Legislature wishes
   35  to help its businesses avoid these costs by encouraging good
   36  faith assertions of patent infringement and the expeditious and
   37  efficient resolution of patent claims.
   38         Section 8. Section 501.992, Florida Statutes, is created to
   39  read:
   40         501.992 Definitions.—As used in this part, the term:
   41         (1) “Demand letter” means a letter, e-mail, or other
   42  communication asserting or claiming that a person has engaged in
   43  patent infringement.
   44         (2) “Institution of higher education” means an educational
   45  institution as defined in 20 U.S.C. s. 1001(a).
   46         (3) “Target” means a person, including the person’s
   47  customers, distributors, or agents, residing in, incorporated
   48  in, or organized under the laws of this state which:
   49         (a) Has received a demand letter or against whom an
   50  assertion or allegation of patent infringement has been made;
   51         (b) Has been threatened with litigation or against whom a
   52  lawsuit has been filed alleging patent infringement; or
   53         (c) Whose customers have received a demand letter asserting
   54  that the person’s product, service, or technology has infringed
   55  upon a patent.
   56         Section 9. Section 501.993, Florida Statutes, is created to
   57  read:
   58         501.993 Bad faith assertions of patent infringement.—A
   59  person may not make a bad faith assertion of patent
   60  infringement.
   61         (1) A court may consider the following factors as evidence
   62  that a person has made a bad faith assertion of patent
   63  infringement:
   64         (a) The demand letter does not contain the following
   65  information:
   66         1. The patent number;
   67         2. The name and address of the patent owner and assignee,
   68  if any; and
   69         3. Factual allegations concerning the specific areas in
   70  which the target’s products, services, or technology infringe or
   71  are covered by the claims in the patent.
   72         (b) Before sending the demand letter, the person failed to
   73  conduct an analysis comparing the claims in the patent to the
   74  target’s products, services, or technology, or the analysis did
   75  not identify specific areas in which the target’s products,
   76  services, and technology were covered by the claims of the
   77  patent.
   78         (c) The demand letter lacked the information listed under
   79  paragraph (a), the target requested the information, and the
   80  person failed to provide the information within a reasonable
   81  period.
   82         (d) The demand letter requested payment of a license fee or
   83  response within an unreasonable period.
   84         (e) The person offered to license the patent for an amount
   85  that is not based on a reasonable estimate of the value of the
   86  license.
   87         (f) The claim or assertion of patent infringement is
   88  unenforceable, and the person knew, or should have known, that
   89  the claim or assertion was unenforceable.
   90         (g) The claim or assertion of patent infringement is
   91  deceptive.
   92         (h) The person, including its subsidiaries or affiliates,
   93  has previously filed or threatened to file one or more lawsuits
   94  based on the same or a similar claim of patent infringement and:
   95         1. The threats or lawsuits lacked the information listed
   96  under paragraph (a); or
   97         2. The person sued to enforce the claim of patent
   98  infringement and a court found the claim to be meritless.
   99         (i) Any other factor the court finds relevant.
  100         (2) A court may consider the following factors as evidence
  101  that a person has not made a bad faith assertion of patent
  102  infringement:
  103         (a) The demand letter contained the information listed
  104  under paragraph (1)(a).
  105         (b) The demand letter did not contain the information
  106  listed under paragraph (1)(a), the target requested the
  107  information, and the person provided the information within a
  108  reasonable period.
  109         (c) The person engaged in a good faith effort to establish
  110  that the target has infringed the patent and negotiated an
  111  appropriate remedy.
  112         (d) The person made a substantial investment in the use of
  113  the patented invention or discovery or in a product or sale of a
  114  product or item covered by the patent.
  115         (e) The person is the inventor or joint inventor of the
  116  patented invention or discovery, or in the case of a patent
  117  filed by and awarded to an assignee of the original inventor or
  118  joint inventors, is the original assignee.
  119         (f) The person has:
  120         1. Demonstrated good faith business practices in previous
  121  efforts to enforce the patent, or a substantially similar
  122  patent; or
  123         2. Successfully enforced the patent, or a substantially
  124  similar patent, through litigation.
  125         (g) Any other factor the court finds relevant.
  126         Section 10. Section 501.994, Florida Statutes, is created
  127  to read:
  128         501.994 Bond.—If a person initiates a proceeding against a
  129  target in a court of competent jurisdiction, the target may move
  130  that the proceeding involves a bad faith assertion of patent
  131  infringement in violation of this part and request that the
  132  court issue a protective order. After the motion, and if the
  133  court finds that the target has established a reasonable
  134  likelihood that the plaintiff has made a bad faith assertion of
  135  patent infringement, the court must require the plaintiff to
  136  post a bond in an amount equal to the lesser of $250,000 or a
  137  good faith estimate of the target’s expense of litigation,
  138  including an estimate of reasonable attorney fees, conditioned
  139  on payment of any amount finally determined to be due to the
  140  target. The court shall hold a hearing at either party’s
  141  request. A court may waive the bond requirement for good cause
  142  shown or if it finds the plaintiff has available assets equal to
  143  the amount of the proposed bond.
  144         Section 11. Section 501.995, Florida Statutes, is created
  145  to read:
  146         501.995 Private right of action.—A person aggrieved by a
  147  violation of this part may bring an action in a court of
  148  competent jurisdiction. A court may award the following remedies
  149  to a prevailing plaintiff in an action brought pursuant to this
  150  section:
  151         (1) Equitable relief;
  152         (2) Damages;
  153         (3) Costs and fees, including reasonable attorney fees; and
  154         (4) Punitive damages in an amount equal to $50,000 or three
  155  times the total damages, costs, and fees, whichever is greater.
  156         Section 12. Section 501.997, Florida Statutes, is created
  157  to read:
  158         501.997 Exemptions.—This part does not apply to an
  159  institution of higher education, to a technology transfer
  160  organization owned by or affiliated with an institution of
  161  higher education, or to a demand letter or an assertion of
  162  patent infringement that includes a claim for relief arising
  163  under 35 U.S.C. s. 271(e)(2) or 42 U.S.C. s. 262.
  164  
  165  ================= T I T L E  A M E N D M E N T ================
  166  And the title is amended as follows:
  167         Delete line 16
  168  and insert:
  169  
  170