Connecticut Seal

General Assembly

 

Raised Bill No. 258

February Session, 2014

 

LCO No. 1461

 

*01461_______JUD*

Referred to Committee on JUDICIARY

 

Introduced by:

 

(JUD)

 

AN ACT CONCERNING BAD FAITH CLAIMS OR ASSERTIONS OF PATENT INFRINGEMENT.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (NEW) (Effective October 1, 2014) (a) As used in this section:

(1) "Demand letter" means a written communication, including an electronic communication, asserting or claiming that the target has engaged in patent infringement;

(2) "Institution of higher education" means "institution of higher education", as defined in Title IV, Part B of the Higher Education Act of 1965;

(3) "Person" means a natural person, corporation, limited liability company, trust, partnership, incorporated or unincorporated association, or any other legal entity;

(4) "Target" means a person (A) who has received a demand letter, (B) who has been named as a defendant in a civil action alleging patent infringement, or (C) whose customers have received a demand letter; and

(5) "Technology transfer organization" means an organization owned by or affiliated with an institution of higher education whose primary purpose is to facilitate the commercialization of technologies developed by one or more institutions of higher education.

(b) No person shall make a bad faith claim or assertion of patent infringement.

(c) A target of conduct involving a bad faith claim or assertion of patent infringement may bring an action in the superior court for the judicial district in which a violation of any provision of this section occurs to enforce the provisions of this section.

(d) In determining whether a person has made a bad faith claim or assertion of patent infringement, a court may consider factors that include, but are not limited to, the following:

(1) Whether a demand letter contained: (A) The patent number, (B) the name and address of the patent owner and assignee, if any, and (C) factual allegations concerning the specific areas in which a target's products, services and technology infringe upon the terms of the patent;

(2) Whether the person sending a demand letter: (A) Prior to sending such demand letter, conducted an analysis of the terms of the patent relative to the target's products, services and technology, and, if such an analysis was conducted, (B) included the results of any such analysis in the demand letter and specifically identified the ways in which a target's products, services and technology infringe upon the terms of the patent;

(3) If a demand letter does not contain the information specified in subdivisions (1) and (2) of this subsection and the target requested that such information be provided, whether the sender of the demand letter provided such information not later than thirty days following the date on which the target requested that the information be provided;

(4) Whether a demand letter included a demand for a response or the payment of a license fee within an unreasonable period of time;

(5) Whether a person alleging patent infringement offered to license the patent for a sum of money that is not based on a reasonable estimate of the value of the license;

(6) Whether the claim or assertion of patent infringement is meritless and the person making such claim or assertion knew or should have known that such claim or assertion is meritless;

(7) Whether the claim or assertion of patent infringement is deceptive; and

(8) Whether a person making the claim or assertion of patent infringement, or a subsidiary or an affiliate of such person, has previously filed or threatened to file one or more civil actions based on the same or a similar claim of patent infringement and (A) such civil action or threatened civil action failed to include the information specified in subdivision (1) of this subsection, or (B) such civil action was found to be without merit by the court.

(e) In determining whether a person has made a good faith claim or assertion of patent infringement, the court may consider factors that include, but are not limited to, the following:

(1) Whether a demand letter contained the information specified in subdivision (1) of subsection (d) of this section;

(2) If a demand letter did not contain the information specified in subdivision (1) of subsection (d) of this section and the target requested that the person sending the demand letter provide such information, whether the person provided such information not later than thirty days following the date on which the target requested that the information be provided;

(3) Whether the person engaged in a good faith effort to establish that the target has infringed the patent and to negotiate an appropriate remedy;

(4) Whether the person has made a substantial investment in the use of the patent or in the production or sale of a product or item covered by the patent;

(5) Whether the person is: (A) The sole or a joint inventor of a patent, or in the case of a patent filed by and awarded to an assignee, the original assignee, or (B) an institution of higher education or a technology transfer organization; and

(6) Whether the person has: (A) Demonstrated good faith business practices in previous efforts to enforce the patent, or a substantially similar patent, or (B) successfully enforced the patent or a substantially similar patent through a civil action.

(f) Upon motion by a target and a finding by the court that a target has established a reasonable likelihood that a person has made a bad faith claim or assertion of patent infringement in violation of this section, the court shall require the person to post a bond in an amount equal to a target's good faith estimate of the costs to litigate the claim and amounts that are reasonably likely to be recovered under this section, conditioned upon payment of any amounts finally determined by the court to be due to a target. A hearing on the target's motion for the posting of a bond shall be held if requested by either party. Any bond ordered pursuant to this section shall not exceed the sum of two hundred fifty thousand dollars. The court may waive the bond if it finds the person has available assets equal to or in excess of the ordered bond or for good cause shown.

(g) In any civil action brought under this section in which the plaintiff prevails, the court may order: (1) Equitable relief, (2) actual damages, (3) reasonable costs and attorney's fees, and (4) punitive damages not to exceed an amount equal to five hundred thousand dollars or three times the total of actual damages and reasonable costs and attorney's fees, whichever is greater.

(h) The Attorney General, acting on behalf of the state of Connecticut, may bring an action in the superior court for the judicial district in which a violation of any provision of this section occurs to enforce the provisions of this section. In any such action, the Attorney General may obtain, for the benefit of persons adversely affected by a violation of this section, any relief to which such persons may be entitled. The Attorney General may combine such action with any other action within the Attorney General's power to maintain, including an action under chapter 735a of the general statutes. Nothing in this section shall limit the right of a person adversely affected by violations of the law from bringing a private cause of action under this section or any other law that may entitle such person to relief.

This act shall take effect as follows and shall amend the following sections:

Section 1

October 1, 2014

New section

Statement of Purpose:

To provide judicial relief to persons who are the targets of bad faith claims or assertions of patent infringement.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]