HF 1586

as introduced - 89th Legislature (2015 - 2016) Posted on 03/09/2015 01:56pm

A bill for an act
relating to commerce; prohibiting assertions of patent infringement in bad faith;
authorizing a court to consider certain factors as evidence of whether an assertion
of patent infringement in bad faith or good faith has been made; providing
enforcement; defining certain terms; proposing coding for new law in Minnesota
Statutes, chapter 325D.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [325D.72] BAD FAITH ASSERTIONS OF PATENT INFRINGEMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the terms defined in
paragraphs (b) through (e) have the meanings given.
new text end

new text begin (b) "Demand" means oral, written, electronic, or other communication which asserts
or alleges a target has infringed or contributed to infringement of a patent or the rights of a
patentee under a patent or rights granted to an assignee or a licensee.
new text end

new text begin (c) "End user" means a consumer, whether an individual, business, or financial
institution, who purchases, rents, leases, or otherwise obtains a product, service, or
technology in the commercial market that is not for resale.
new text end

new text begin (d) "Person" means a natural person, corporation, trust, partnership, incorporated or
unincorporated association, or other legal entity asserting patent infringement against a
target.
new text end

new text begin (e) "Target" means an end user who is a Minnesota natural person, corporation, trust,
partnership, incorporated or unincorporated association, or other legal entity:
new text end

new text begin (1) who has received a demand or against whom an assertion or allegation of patent
infringement has been made;
new text end

new text begin (2) who has been threatened with litigation or against whom a lawsuit has been filed
alleging patent infringement; or
new text end

new text begin (3) whose customers have received a demand asserting that the target's product,
service, or technology has infringed upon a patent.
new text end

new text begin Subd. 2. new text end

new text begin Prohibition. new text end

new text begin (a) A person shall not make a bad faith assertion of patent
infringement.
new text end

new text begin (b) A court may consider the following factors as evidence that a person has made a
bad faith assertion of patent infringement:
new text end

new text begin (1) the demand does not contain the following information:
new text end

new text begin (i) the patent number;
new text end

new text begin (ii) the name and address of the patent owner or owners and assignee or assignees, if
any; and
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new text begin (iii) factual allegations concerning the specific areas in which the target's products,
services, and technology infringe the patent or are covered by the claims in the patent;
new text end

new text begin (2) prior to the demand, the person fails to conduct an analysis comparing the claims
in the patent to the target's products, services, and technology, or such an analysis was
done but does not identify specific areas in which the products, services, and technology
are covered by the claims in the patent;
new text end

new text begin (3) the demand lacks the information described in clause (1), the target requests the
information and the person fails to provide the information within a reasonable period of
time;
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new text begin (4) the demand demands payment of a license fee or response within an unreasonably
short period of time;
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new text begin (5) the person offers to license the patent for an amount that is not based on a
reasonable estimate of the value of the license;
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new text begin (6) the claim or assertion of patent infringement is meritless;
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new text begin (7) the claim or assertion of patent infringement is deceptive;
new text end

new text begin (8) the person or its subsidiaries or affiliates have previously filed or threatened to
file one or more lawsuits based on the same or similar claim of patent infringement and:
new text end

new text begin (i) those threats or lawsuits lacked the information described in clause (1); or
new text end

new text begin (ii) the person attempted to enforce the claim of patent infringement in litigation and
a court found the claim to be meritless; and
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new text begin (9) any other factor the court finds relevant.
new text end

new text begin (c) a court may consider the following factors as evidence that a person has not made
a bad faith assertion of patent infringement:
new text end

new text begin (1) the demand contains the information described in paragraph (b), clause (1);
new text end

new text begin (2) where the demand lacks the information described in paragraph (b), clause (1),
and the target requests the information, the person provides the information within a
reasonable period of time;
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new text begin (3) the person engages in a good faith effort to establish that the target has infringed
the patent and to negotiate an appropriate remedy;
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new text begin (4) the person makes a substantial investment in the use of the patent or in the
production or sale of a product or item covered by the patent;
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new text begin (5) the person has:
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new text begin (i) demonstrated good faith business practices in previous efforts to enforce the
patent, or a substantially similar patent; or
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new text begin (ii) successfully enforced the patent, or a substantially similar patent, through
litigation; and
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new text begin (6) any other factor the court finds relevant.
new text end

new text begin Subd. 3. new text end

new text begin Personal jurisdiction. new text end

new text begin A person outside this state issuing a demand to a
target shall be deemed to be transacting business within this state within the meaning of
Minnesota law, and is subject to the jurisdiction of the courts of this state.
new text end

new text begin Subd. 4. new text end

new text begin Enforcement; remedies; damages. new text end

new text begin (a) The attorney general has the same
authority under this section to conduct civil investigations, bring civil actions, and enter
into assurances of discontinuance as provided under section 8.31. In an action brought
by the attorney general under this section, the court may award or impose any relief
available under Minnesota law.
new text end

new text begin (b) This section does not limit rights and remedies available to the state of Minnesota
or to any party under any other law and shall not alter or restrict the attorney general's
authority under Minnesota law with regard to conduct involving assertions of patent
infringement.
new text end

new text begin (c) This section does not apply to a written or electronic communication sent by:
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new text begin (1) an owner of a patent who is using the patent in connection with substantial
research, commercial development, production, manufacturing, processing, or delivery
of products or materials;
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new text begin (2) an institution of higher education; or
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new text begin (3) a technology transfer organization whose primary purpose is to facilitate the
commercialization of technology developed by an institution of higher education.
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new text begin (d) This section does not apply to a person who: (i) has demonstrated good faith
business practices in previous efforts to enforce the patent, or a substantially similar
patent; or (ii) has successfully enforced the patent, or a substantially similar patent,
through litigation.
new text end