PROVIDENCE, R.I. (Legal Newsline) - The Rhode Island Senate has passed a patent reform bill that was filed on behalf of Attorney General Peter Kilmartin last month.
Senators passed the measure, Senate Bill 0596, late Thursday. The bill was referred to the House Judiciary Committee Friday.
The legislation, introduced by Senate Minority Leader Dennis Algiere, a Republican, would prohibit a person from making bad faith assertions of patent infringement against a Rhode Island business or individual.
The bill -- similar to other state measures -- also would allow a business or individual to bring action in Rhode Island Superior Court against the patent troll, where they may be awarded equitable relief, actual damages, costs, attorney’s fees and exemplary damages.
Generally speaking, a non-practicing entity, patent assertion entity or patent monetization entity purchases groups of patents without an intent to market or develop a product.
In some cases, but not all, the entity then targets other businesses with lawsuits alleging infringement of the patents it bought. Often, these are referred to as “patent trolls.”
The proposed law also gives Kilmartin’s office civil investigative powers, including the ability to bring civil actions against patent trolls.
If found to have made a bad faith assertion, the patent troll could face a maximum penalty of $250,000.
“The tactics that patent trolls employ stifle entrepreneurship and can financially devastate a small business,” Kilmartin said. “We need to protect businesses that are attacked by dubious patent trolls looking to make a quick buck.
“I commend Leader Algiere for his leadership on this important issue and for ushering its passage in the Senate.”
Algiere, who sponsored a version of the bill in past legislative sessions, said he is pleased fellow lawmakers realize how important it is to give businesses such protection.
“It is difficult enough for small businesses to thrive here without having to worry about predatory patent trolls and the potential cost of litigation to protect their businesses,” he said.
Kilmartin said nonprofits and businesses like banks, hospitals, restaurants and hotels, in particular, need better protection from what he describes as “essentially boardroom shakedowns.”
Both the Rhode Island Hospitality Association and the Greater Providence Chamber of Commerce have come out in support of the bill.
Companion legislation, House Bill 5455, is sponsored by Rep. Brian Kennedy, a Democrat and chair of the House Corporations Committee.
Click here to view SB 0596 as amended.
From Legal Newsline: Reach Jessica Karmasek by email at patents@legalnewsline.com.