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.