Patent Troll Legislation Passes

Patent Troll Legislation Passes in Washington State

In an unprecedented move, the Washington House of Representatives passed a Patent Troll Prevention Act, prepared by Washington Attorney General Bob Ferguson, which was announced in an Attorney General press release earlier this year. The bill, which took the form of Senate Bill 5059 at the Senate and House Bill 1090 at the House of Representatives, was passed with strong bipartisan support from the Legislature.

What Are Patent Trolls?

Patent trolls, sometimes also referred to as non-practicing entities, patent monetization entities, or patent assertion entities, are usually companies who obtain patent rights not for the purpose of making, marketing, or using the inventions contained in the patents, but rather for the purpose of suing other people and companies that the non-practicing entity believe are potentially infringing the patents that they hold. 

Patent trolls are a problem because their actions compel innocent parties to comply with their financial demands out of fear of a potential patent infringement lawsuit that could put them out of business. Courts often determine that the patent infringement claims brought by the patent troll are predatory and made in bad faith, and are made solely for the purpose of extorting a settlement from the alleged infringer.  Sometimes patent trolls will send demand letters based on patent rights they do not even actually hold in order to scare people into compliance.

Why Is The Anti-Patent Troll Legislation Important?

The anti-patent troll legislation is important because it protects small, legitimate businesses from being taken advantage of by aggressive non-practicing entities, or patent trolls. The legislation gives the Attorney General enforcement authority under Washington’s Consumer Protection Act.  One example of the protections offered by the legislation is that patent trolls will be prohibited from sending baseless demand letters that are intended to scare recipients into settling the alleged patent infringement claims out of court. Some of the specific prohibitions include:

• Demand letters containing baseless threats of litigation if a settlement or licensing fee is not paid.
• Demand letters containing false, misleading, or deceptive information.
• Letters sent by parties who do not in fact hold the rights to license or enforce the allegedly infringed patent.
• Letters that fail to identify who precisely is asserting the patent rights, and/or fail to explain what the alleged infringement is.

To learn more about patent trolling, patent infringement claims, or demand letters, contact Parsons & Goltry at ww.patentsavers.com, or call our Scottsdale, Arizona office at 480-991-3435.