Patent Troll Legislation Passes Assembly; Not All Businesses Support the Legislation

Despite last minute efforts to exempt manufacturers, the Assembly on Thursday, March 20, passed SB 498. The bill addresses so-called “patent trolls,” which are individuals or companies that attempt to enforce patent rights against accused infringers in order to collect licensing fees, but does not manufacture products or supply services based upon the patents in question.

The legislation requires a patent notification to contain certain information, such as:

  • The number of each patent or patent application that is the subject of the patent notification.
  • A physical or electronic copy of each patent or pending patent.
  • The name and physical address of the owner of each patent or pending patent and all other persons having a right to enforce the patent or pending patent.
  • An identification of each claim of each patent or pending patent being asserted and the target’s product, service, or technology relating to the claim.
  • Factual allegations setting forth the person’s theory of each claim identified.
  • An identification of each pending or completed court or administrative proceeding concerning each patent or pending patent.

SB 592 was amended to provide exemptions for institutions of higher education, devices subject to approval by the FDA or federal department of agriculture, and health care or research institutions.

The amendment also provides that the enforcement actions and private cause of actions are triggered only if a person includes false, misleading, or deceptive information in a patent notification or fails to provide the required information with the 30-day period following a notification from a target.

Unfortunately, without the amendment to exempt manufacturers, the bill will inadvertently chill legitimate patent communications companies and other patent owners engage in on a daily basis. This, in turn, could impede innovation that often leads to job creation.

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