Patent troll bill moves through Wisconsin

The bill is aimed at preventing predatory behavior on the part of companies that regularly bring others to court simply to collect fees for licensing their patents

Legislation regarding patent litigation has been a focus for federal and state lawmakers over the last year as many in Washington consider the importance of new technologies and the efforts required to preserve the ownership of intellectual property. As technology itself has swiftly evolved over the last decade — with mobile at the forefront of the growing tech scene — companies race to patent IP. But the evolution of the patent troll has not gone unnoticed, to say the least, as a result of the deeply competitive nature of technology IP patents. New legislation making its way through Wisconsin right now aims to address the power of the patent troll.

Patent trolls are considered companies that hold patents and actively — if not needlessly — pursue in court other companies that are designing or using similar technologies. The traditional model is one of a large corporation going after smaller startups that often do not have the kind of financial support to undergo massive amounts of litigation. Often, patent trolls do not use the technology itself, but instead simply own the patents and make money off the licensing fees. In short, the patent troll usually ends up forcing the smaller company to license its patents rather than empty its pockets to fight for its own IP rights in court. Wisconsin’s Senate Bill 498 contains provisions that attempt to curb this activity. 

The bill has cleared the Senate, and is being sent to the state Assembly, which will approve it before the Governor would sign it. It mainly enforces written communications — otherwise known as “demand letters” — with regards to asserting patent rights, requiring specifications and the basis for theory of each patent claim being asserted. 

Legal Newsline describes the increased strictness on patent litigation that the bill covers: “It would authorize the attorney general to initiate a court action for an injunction of a violation of the bill’s requirements, and in such an action, the bill would authorize the court to make any necessary orders to restore to any person any pecuniary loss the person may have suffered as a result of the violation…SB 498 also would allow the attorney general to seek a forfeiture to the state of up to $50,000 for each violation of the bill’s requirements.”

Among other provisions, these new rules — if enacted — are aimed at dissuading patent trolls from haphazardly bringing patent cases to court simply to extract licensing fees or to bleed smaller companies dry.

 

Further reading:

Cisco reaches $2.7 million deal with Wi-Fi patent troll

Heightened pleading standards in patent litigation reform

Patent litigation shows sharp decline this year

Contributing Author

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Juliana Kenny

Juliana Kenny is a contributor to InsideCounsel.com, covering a range of topics including patent litigation, conflict mineral laws, executive compensation, and antitrust regulation. Juliana earned B.A.s...

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