The bill that was working its way through Wisconsin state legislative bodies last week has officially been approved by the state Assembly, and is moving to the desk of Governor Scott Walker for signing into law.
The legislation has been designed to work against companies known as “patent trolls” that actively pursue other companies — often smaller ones, startups, or individual inventors — in court. Patent trolls frequently play the roles of owners of the patents, but without actually inventing anything using the technology, or employing it for their own contributions to whatever field the patent is in. Instead, patent trolls will simply buy up patents in order to then extract licensing fees from other companies wanting to use the technology.
Many see this strategy as anti-innovation, and discouraging for many startups that would explore their business ideas or the development of new products, but for the exorbitant fees that patent trolls require to license their patents or be taken to court. And, indeed, the legislation is designed to prevent patent trolls from heedlessly bringing other organizations to court and requiring them to jump through a few hoops.
The soon-to-be law covers the enforcing of thorough written communications — or “demand letters” — that are required by court in order to take another entity to the courtroom for patent violation. The demand letters will more extensively require basis for theory on each patent claim being asserted, and other specifications.
The Washington Examiner describes some of the further parameters the bill — known as SB 498 — puts into action: “The bill would allow the state Department of Agriculture, Trade and Consumer Protection, or DATCP, or the attorney general to investigate an alleged violation of the bill’s requirements. 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.”
Whether or not this type of legislation will actually deter patent trolls remains to be seen, especially because patent trolling is a widespread problem — and not just in the U.S. Inside Counsel’s Amanda Ciccatelli describes the international problem of patent trolling, with some notable problems in Australia, Canada, and Russia.