Jessica M. Karmasek Feb. 14, 2014, 7:30pm
FRANKFORT, Ky. (Legal Newsline) -- Add Kentucky to the growing list of states that are introducing their own legislation to combat so-called "patent trolls."
Earlier this month, state Sens. Whitney Westerfield and Christian McDaniel, both Republicans, introduced Senate Bill 116.
The legislation would enable the recipients of bad-faith demand letters to sue those trolls trying to extort money from them.
The bill also would allow letter recipients to recover damages, the "reasonable cost of litigation," including attorney's fees, and exemplary damages in an amount equal to $50,000 or three times the total of the person's damages, costs and fees, whichever is greater.
"There's not a lot you can do from the state level in terms of the federal patent system," Westerfield said Friday. "But we thought this was a pretty good step."
Westerfield said McDaniel approached him over the summer about proposing the measure.
"I'm a big follower of technology and tech-related litigation," Westerfield admitted. "So when he approached me and asked me if I knew what a patent troll is, I said, do I ever!"
McDaniel put together the bones of the bill and then brought it to Westerfield, who made some adjustments.
Together, they introduced SB 116 Feb. 3. Two days later, it was sent to the Senate Judiciary Committee, which Westerfield chairs.
After a hearing held Thursday, the legislation passed out of the committee on a bipartisan 10-0 vote.
No one testified in opposition to the bill, Westerfield noted.
"In fact, one of the witnesses testified that ours is very similar to Vermont's, and that Vermont is already seeing really good results from their bill," the senator said.
Click here to listen to testimony from Thursday's hearing.
Under Vermont's measure -- signed into law last year -- a court can consider as evidence a letter that does not provide the patent number, the name and address of the patent owner and/or assignee, or an explanation of how the target company's products or services infringed on the patent.
The court also can consider if the letter demands payment of a license fee or a response in an "unreasonably short" period of time.
The Vermont law also allows the state attorney general to conduct civil investigations and bring civil lawsuits against violators, and the court may award relief or damages.
Other states, including Maine and Oregon, have proposed similar bills to battle patent trolls -- the derogatory term given to some patent assertion entities that purchase groups of patents without an intent to market or develop a product. The companies then target other businesses with lawsuits alleging infringement of the patents they bought.
Although he has no first-hand experience dealing with such trolls, Westerfield called them a "bane" to business, innovation, employment and commerce.
"There are a host of things they jack up, if I can speak frankly," he said. "Because they're basically squatting on patents.
"They contribute nothing to the stream of commerce. They wait until something becomes valuable to them and then start sending demand letters. They're holding businesses hostage."
SB 116, which has been sent to the Senate floor, could be heard as early as next week.
From Legal Newsline: Reach Jessica Karmasek by email at email@example.com.