OLYMPIA, Wash. (Legal Newsline) - Patent troll legislation has cleared another hurdle in Washington state.
On Monday, the House of Representatives passed state Attorney General Bob Ferguson’s Patent Troll Prevention Act, which aims to protect small businesses from “predatory” and bad faith patent infringement claims and demands.
The legislation, which has strong bipartisan support, now heads to Gov. Jay Inslee, a Democrat, for his signature.
“Patent trolls are in business to take money from legitimate enterprises. Their tactics hurt the economy and stifle innovation,” Ferguson said in a statement.
“The Patent Troll Prevention Act will protect small businesses and provide my office with enforcement authority to hold these fraudulent trolls accountable.”
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.”
Ferguson said the trolls’ “aggressive” and “deceptive” tactics have become a growing concern, prompting him to request the legislation -- Senate Bill 5059, sponsored by state Sen. David Frockt, D-Seattle, and House Bill 1090, sponsored by state Rep. Laurie Jinkins, D-Tacoma.
“It is increasingly important that we protect Washington entrepreneurs and small businesses from fraudulent attempts to use phony patents as a means of extortion,” Frockt said in a statement.
“This bill is a big step forward to protect the legal rights of local businesses and maintain the fair and legitimate operation of our intellectual property system that is so critical to the tech-driven economy in this region.”
Jinkins agreed, calling small businesses the “cornerstone” of communities and the economy.
“But too many of our hard-working business owners are being needlessly threatened, forced to spend precious resources fighting bogus claims of patent infringement,” she said.
“With this bill, we will do more to stop these dishonest practices and stand up for small businesses across Washington.”
The Patent Troll Prevention Act will prohibit demand letters that: contain false or deceptive information; are sent by parties who do not have the right to license or enforce a patent; “baselessly” threaten litigation if a fee is not paid; and fail to identify the individual asserting the patent and explain the alleged infringement.
The legislation also provides the attorney general with enforcement authority under the state’s Consumer Protection Act to hold fraudulent patent trolls accountable.
From Legal Newsline: Reach Jessica Karmasek by email at email@example.com.