SF 1321

1st Engrossment - 89th Legislature (2015 - 2016) Posted on 04/22/2016 09:09am

A bill for an act
relating to commerce; prohibiting bad faith assertions of patent infringements;
providing enforcement; 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 Definition; end user. new text end

new text begin For purposes of this section, "end user" means
a person, whether an individual, business, or financial institution, that purchases, rents,
leases, or otherwise obtains a product, service, or technology in the commercial market
that is not for resale and that is, or later becomes, the subject of a patent infringement
assertion due to the person's use of the product, service, or technology.
new text end

new text begin Subd. 2. new text end

new text begin Bad faith claim of patent infringement prohibited. new text end

new text begin (a) A person may
not send to an end user located or doing business in this state a written or electronic
communication that is a bad faith claim of patent infringement.
new text end

new text begin (b) A communication is a bad faith claim of patent infringement if the
communication includes a claim that the end user or a person affiliated with the end user
has infringed a patent and is liable for that infringement and:
new text end

new text begin (1) the communication falsely states that the sender has filed a lawsuit in connection
with the claim;
new text end

new text begin (2) the sender or a person the sender represents does not have a current right to
license the patent to or enforce the patent against the end user;
new text end

new text begin (3) the patent has been held invalid or unenforceable in a final judgment or
administrative decision;
new text end

new text begin (4) the infringing activity alleged in the communication occurred after the patent
expired; or
new text end

new text begin (5) the communication is likely to materially mislead a reasonable end user because
the communication does not contain information sufficient to inform the end user of:
new text end

new text begin (i) the identity of the person asserting the claim;
new text end

new text begin (ii) the patent that is alleged to have been infringed; and
new text end

new text begin (iii) at least one product, service, or technology obtained by the end user that is alleged
to infringe the patent or the activity of the end user that is alleged to infringe the patent.
new text end

new text begin Subd. 3. new text end

new text begin Enforcement by attorney general; injunction and civil penalty. new text end

new text begin If the
attorney general believes that a person has violated or is violating this section, the attorney
general may bring an action on behalf of the state to enjoin the person from violating this
section. In addition to seeking an injunction, the attorney general may request and the
court may order any other relief that may be in the public interest, including:
new text end

new text begin (1) the imposition of a civil penalty in an amount not to exceed $50,000 for each
violation of subdivision 2;
new text end

new text begin (2) an order requiring reimbursement to this state for the reasonable value of
investigating and prosecuting a violation of subdivision 2; and
new text end

new text begin (3) an order requiring restitution to a victim for legal and professional expenses
related to the violation.
new text end

new text begin Subd. 4. new text end

new text begin Construction; application. new text end

new text begin (a) This section shall not be construed to limit
the rights and remedies available to the state or another person under any other law or
alter or restrict the attorney general's authority under other law with regard to conduct
involving claims of patent infringement. This section shall not prohibit a person who
owns or has a right to license or enforce a patent from notifying others of the person's
ownership or right; offering the patent to others for license or sale; notifying any person
of the person's infringement of the patent as provided by United States Code, title 35,
section 287; or seeking compensation for past or present infringement of the patent or for
a license to the patent. This section shall not be construed to apply to a person who has
demonstrated good faith business practices in previous efforts to enforce the patent, or a
substantially similar patent, or who has successfully enforced the patent, or a substantially
similar patent, through litigation.
new text end

new text begin (b) This section shall not apply to any written or electronic communication:
new text end

new text begin (1) sent by any owner of a patent who has engaged in substantial research,
commercial development, production, manufacturing, processing, or delivery of products
or materials related to the patent or substantially similar patents;
new text end

new text begin (2) sent by any institution of higher education;
new text end

new text begin (3) sent by a charitable institution under section 501(c)(3) of the Internal Revenue
Code, and those within its control group as defined therein;
new text end

new text begin (4) sent by any technology transfer organization whose primary purpose is to
facilitate the commercialization of technology developed by an institution of higher
education or charitable institution under section 501(c)(3) of the Internal Revenue Code,
and those within its control group as defined therein; or
new text end

new text begin (5) relating to a demand or assertion of patent infringement that arises under United
States Code, title 35, section 271(e)(2); United States Code, title 21, section 355; or United
States Code, title 42, section 262, and any civil action including such a demand or assertion.
new text end

new text begin Subd. 5. new text end

new text begin No private cause of action. new text end

new text begin This section does not create a private cause
of action for a violation of subdivision 2.
new text end