LEGAL NEWSLINE

PORTLAND, Maine (Legal Newsline) -- Not a single person or group testified against a piece of legislation that would make patent trolling more difficult in Maine at a public hearing held last week.

A total of eight people, including state Sen. Anne Haskell and Rep. Jennifer DeChant, both Democrats and the sponsors of Legislative Document 1660, expressed their support for the bill.

Among the others: John Delahanty of the Maine Society of CPAs; Quincy Hentzel, director of governmental affairs for the Maine Credit Union League; Mark Mickeriz of the Maine Bankers Association and president and CEO of SIS Bank; Curtis Picard, the executive director of the Retail Association of Maine; and Matthew H. Street of the American Bankers Association.

"Funds used to avoid the threat of bad faith litigation are no longer available to invest, produce new products, expand or hire new workers, thereby harming state economies," Picard said.

"The narrowly focused language in the bill seeks to facilitate the efficient and prompt resolution of patent infringement claims, protect the state's businesses from abusive and bad faith assertions of patent infringement, and build the state's economy, while at the same time respecting federal law and being careful not to interfere with legitimate patent enforcement actions."

Maine Attorney General Janet Mills did not testify, but submitted a letter in support of LD 1660.

"l remain very concerned about Maine businesses being targeted by broad patent infringement claims," Mills wrote in her letter to state lawmakers.

"l urge businesses and individuals who receive such demand letters to contact us and we will follow up, and I certainly welcome Sen. Haskell's interest in this matter."

Under LD 1660, any company or person can file a lawsuit in superior court against someone who has made a bad faith assertion of patent infringement against them.

The court may award equitable relief, damages, costs and fees, including "reasonable" attorneys fees, and punitive damages equal to $50,000 or three times the total damages, costs and fees -- whichever is greater.

Also under the proposed bill, the attorney general may bring an action for a bad faith assertion in violation of the state's Unfair Trade Practices Act.

Haskell, who decided to introduce the legislation in December when she heard that quite a few banks in the state were hit by companies claiming to have patents on the banks' ATM software, said she felt like the public hearing, held Feb. 4, went "very well."

"The (judiciary) committee had very thoughtful questions, and I felt like it was very positive," she said.

The committee, she said, seemed "genuinely interested" in the legislation and in learning what it would mean for companies in the state.

"They were very curious about the accusations in these demand letters," Haskell said. "They wanted to see what they looked like up-close, to know exactly what businesses are up against."

She continued, "I think the committee was suitably convinced that this is more than a one-off problem, that this is getting larger."

Haskell said even the banks and credit unions were arm-in-arm in their support for the bill -- something that doesn't happen too often, she noted.

"Maine needs legislation that addresses the bad faith assertions of patent trolls," Hentzell said, speaking on behalf of the credit unions.

"It has proven to be a lucrative opportunity which we fear will only become more prevalent over time unless or until businesses and organizations, such as credit unions, have a defense and other protections at their disposal."

Mickeriz agreed, speaking for the banks. He pointed to his bank's own experience with a so-called patent troll, Automated Transactions LLC.

ATL asserts that its patents cover the use of the Internet in any way, whether connected directly, indirectly or through virtual private networks, to transact business through ATMs.

"In Maine, ATL's alleged patent infringement claims against Maine-based banks is estimated to exceed $1 million if the banks settled via licensing agreements," Mickeriz explained.

"SIS Bank chose to settle early. We made a business decision to join a group of other banks
and reach an upfront licensing fee agreement as opposed to a long drawn out and potentially very expensive legal battle."

Haskell said that's not how someone should have to run their business.

"Making a business decision, even though it goes against their principles -- it's just not right," she said.

A work session was scheduled for the proposed legislation Tuesday.

Haskell said what happens next depends on that work session.

If voted out, the bill then will be sent to the Senate for floor debate and vote.

From Legal Newsline: Reach Jessica Karmasek by email at patents@legalnewsline.com.