'Patent trolling' protection puts focus on bad faith claims

In the land of 10,000 lakes there’s perhaps only one kind of trolling that is harming humans today. It’s called “patent trolling,” and 27 states have already passed legislation to help prevent it.

“Some of our members became concerned about patent controls several years ago when they saw lawsuits being initiated against small businesses,” said Tess Rice, general counsel and director of government relations for the Minnesota Bankers Associations General Council.

Rep. Joe Hoppe

HF1586, sponsored by Rep. Joe Hoppe (R-Chaska), would allow an attorney general to bring civil action against someone who has made a “bad faith claim” against another for infringement on any potentially patented product. A penalty of up to $50,000 per violation could be imposed on any individual or business.

Approved by the House Civil Law and Data Practices Committee Tuesday, the bill now moves to the House Floor. A companion, SF1321, sponsored by Sen. Kari Dziedzic (DFL-Mpls) awaits action by the Senate Commerce Committee.

The law defines bad faith claims as trying to enforce a patent that is not yours, trying to enforce an expired patent, or falsely claiming that someone has filed a lawsuit against another.

The bill has the intent of targeting patent assertion entities – businesses that acquire patents with no intention of using the technology itself, but rather suing for alleged infringement. It would not limit any other rights or remedies available under existing laws related to patent infringement.

“We worked really hard with this bill so that we don’t interfere with legitimate patents that are interfering with each other; it really only addresses those demand letters that are sent in bad faith,” Rice said. “It should not have any impact on legitimate patent holders.”

In Minnesota when patent trolling occurs, the “end user” (who purchased the product, or is using the technology) is caught in a legal limbo. As-is, the law prohibits someone from taking private action, and in certain circumstances prohibits existing laws from being enforced. There are no federal laws creating precedent.