Florida Senate - 2016                        COMMITTEE AMENDMENT
       Bill No. SB 1298
       
       
       
       
       
       
                                Ì618428?Î618428                         
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  02/16/2016           .                                
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       The Committee on Judiciary (Brandes) recommended the following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. Section 501.991, Florida Statutes, is amended to
    6  read:
    7         501.991 Legislative intent; construction.—
    8         (1) The Legislature recognizes that it is preempted from
    9  passing any law that conflicts with federal patent law. However,
   10  the Legislature recognizes that the state is dedicated to
   11  building an entrepreneurial and business-friendly economy where
   12  businesses and consumers alike are protected from abuse and
   13  fraud. This includes protection from abusive and bad faith
   14  demands and litigation.
   15         (2) Patents encourage research, development, and
   16  innovation. Patent holders have a legitimate right to enforce
   17  their patents. The Legislature does not wish to interfere with
   18  good faith patent litigation or the good faith enforcement of
   19  patents. However, the Legislature recognizes a growing issue:
   20  the frivolous filing of bad faith patent claims that have led to
   21  technical, complex, and especially expensive litigation.
   22         (3) The expense of patent litigation, which may cost
   23  millions of dollars, can be a significant burden on companies
   24  and small businesses. Not only do bad faith patent infringement
   25  claims impose undue burdens on individual businesses, they
   26  undermine the state’s effort to attract and nurture
   27  technological innovations. Funds spent to help avoid the threat
   28  of bad faith litigation are no longer available for serving
   29  communities through investing in producing new products, helping
   30  businesses expand, or hiring new workers. The Legislature wishes
   31  to help businesses avoid these costs by encouraging good faith
   32  assertions of patent infringement and the expeditious and
   33  efficient resolution of patent claims.
   34         (4)This part may not be construed to:
   35         (a)Limit the rights and remedies available to the state or
   36  a person under any other law;
   37         (b)Alter or restrict the Attorney General’s authority
   38  under any other law regarding claims of patent infringement; or
   39         (c)Prohibit a person who owns, or has a right to license
   40  or enforce, a patent from:
   41         1.Notifying other parties of such person’s ownership of,
   42  or rights under, the patent;
   43         2.Offering the patent to other parties for license or
   44  sale;
   45         3.Notifying other parties of such parties’ infringement of
   46  the patent as provided by 35 U.S.C. s. 287; or
   47         4.Seeking compensation for past or present infringement
   48  of, or license to, the patent.
   49         Section 2. Subsections (1) and (3) of section 501.992,
   50  Florida Statutes, are amended to read:
   51         501.992 Definitions.—As used in this part, the term:
   52         (1) “Demand letter” means a letter, e-mail, or other
   53  written communication, including e-mail, asserting or claiming
   54  that a person has engaged in patent infringement.
   55         (3) “Target” means a person residing in, incorporated in,
   56  or organized under the laws of this state who purchases, rents,
   57  leases, or otherwise obtains a product or service in the
   58  commercial market which is not for resale in the commercial
   59  market and who:
   60         (a) Has received a demand letter or against whom a written
   61  assertion or allegation of patent infringement has been made; or
   62         (b) Has been threatened in writing with litigation or
   63  against whom a lawsuit has been filed alleging patent
   64  infringement.
   65         Section 3. Section 501.993, Florida Statutes, is amended to
   66  read:
   67         501.993 Bad faith assertions of patent infringement.—A
   68  person may not send a demand letter to a target which makes make
   69  a bad faith assertion of patent infringement. A demand letter
   70  makes a bad faith assertion of patent infringement if it:
   71         (1) Includes a claim that the target, or a person
   72  affiliated with the target, has infringed a patent and that the
   73  target is legally liable for such infringement; and A court may
   74  consider the following factors as evidence that a person has
   75  made a bad faith assertion of patent infringement:
   76         (a)The demand letter does not contain the following
   77  information:
   78         1. The patent number;
   79         2. The name and address of the patent owner and assignee,
   80  if any; and
   81         3. Factual allegations concerning the specific areas in
   82  which the target’s products, services, or technology infringe or
   83  are covered by the claims in the patent.
   84         (b)Before sending the demand letter, the person failed to
   85  conduct an analysis comparing the claims in the patent to the
   86  target’s products, services, or technology, or the analysis did
   87  not identify specific areas in which the target’s products,
   88  services, and technology were covered by the claims of the
   89  patent.
   90         (c)The demand letter lacked the information listed under
   91  paragraph (a), the target requested the information, and the
   92  person failed to provide the information within a reasonable
   93  period.
   94         (d) The demand letter requested payment of a license fee or
   95  response within an unreasonable period.
   96         (e) The person offered to license the patent for an amount
   97  that is not based on a reasonable estimate of the value of the
   98  license.
   99         (f) The claim or assertion of patent infringement is
  100  unenforceable, and the person knew, or should have known, that
  101  the claim or assertion was unenforceable.
  102         (g) The claim or assertion of patent infringement is
  103  deceptive.
  104         (h) The person, including its subsidiaries or affiliates,
  105  has previously filed or threatened to file one or more lawsuits
  106  based on the same or a similar claim of patent infringement and:
  107         1. The threats or lawsuits lacked the information listed
  108  under paragraph (a); or
  109         2. The person sued to enforce the claim of patent
  110  infringement and a court found the claim to be meritless.
  111         (i) Any other factor the court finds relevant.
  112         (2) Meets one or more of the following criteria A court may
  113  consider the following factors as evidence that a person has not
  114  made a bad faith assertion of patent infringement:
  115         (a) The demand letter falsely asserts that the sender has
  116  filed a lawsuit in connection with the claim contained the
  117  information listed under paragraph (1)(a).
  118         (b) The demand letter asserts a claim that is objectively
  119  baseless due to any of the following:
  120         1.The sender, or a person whom the sender represents,
  121  lacks a current right to license the patent to, or enforce the
  122  patent against, the target.
  123         2.The patent is invalid or unenforceable pursuant to a
  124  final judgment or an administrative order.
  125         3.The infringing activity alleged in the demand letter
  126  occurred after the expiration of the patent The demand letter
  127  did not contain the information listed under paragraph (1)(a),
  128  the target requested the information, and the person provided
  129  the information within a reasonable period.
  130         (c) The demand letter is likely to materially mislead a
  131  reasonable person because it does not contain sufficient
  132  information to inform the target of all of the following:
  133         1.The identity of the person asserting the claim,
  134  including the name and address of such person.
  135         2.The patent alleged to have been infringed, including the
  136  patent number of such patent.
  137         3.At least one product, service, or technology of the
  138  target alleged to infringe the patent, or at least one activity
  139  of the target which is alleged to infringe the patent The person
  140  engaged in a good faith effort to establish that the target has
  141  infringed the patent and negotiated an appropriate remedy.
  142         (d)The person made a substantial investment in the use of
  143  the patented invention or discovery or in a product or sale of a
  144  product or item covered by the patent.
  145         (e) The person is the inventor or joint inventor of the
  146  patented invention or discovery, or in the case of a patent
  147  filed by and awarded to an assignee of the original inventor or
  148  joint inventors, is the original assignee.
  149         (f) The person has:
  150         1. Demonstrated good faith business practices in previous
  151  efforts to enforce the patent, or a substantially similar
  152  patent; or
  153         2. Successfully enforced the patent, or a substantially
  154  similar patent, through litigation.
  155         (g) Any other factor the court finds relevant.
  156         Section 4. Section 501.994, Florida Statutes, is repealed.
  157         Section 5. Section 501.995, Florida Statutes, is amended to
  158  read:
  159         501.995 Private right of action.—A person aggrieved by a
  160  violation of this part may bring an action in a court of
  161  competent jurisdiction. A court may award the following remedies
  162  to a prevailing plaintiff in an action brought pursuant to this
  163  section:
  164         (1) Equitable relief;
  165         (2) Actual damages;
  166         (3) Costs and fees, including reasonable attorney fees; and
  167         (4) Punitive damages in an amount not to exceed $75,000.
  168  However, such punitive damages may only be awarded if the court
  169  determines that the person asserting the patent infringement
  170  claim has repeatedly violated this chapter Punitive damages in
  171  an amount equal to $50,000 or three times the total damages,
  172  costs, and fees, whichever is greater.
  173         Section 6. Section 501.997, Florida Statutes, is repealed.
  174         Section 7. This act shall take effect upon becoming law.
  175  
  176  ================= T I T L E  A M E N D M E N T ================
  177  And the title is amended as follows:
  178         Delete everything before the enacting clause
  179  and insert:
  180                        A bill to be entitled                      
  181         An act relating to bad faith assertions of patent
  182         infringement; amending s. 501.991, F.S.; providing for
  183         construction; amending s. 501.992, F.S; revising
  184         definitions; amending s. 501.993, F.S.; prohibiting a
  185         person from sending a demand letter to a target which
  186         makes a bad faith assertion of patent infringement;
  187         specifying what constitutes such a demand letter;
  188         repealing s. 501.994, F.S., relating to the
  189         requirement that a plaintiff post a specified bond in
  190         certain circumstances; amending s. 501.995, F.S.;
  191         revising provisions authorizing the bringing of
  192         actions and specified remedies under the Patent Troll
  193         Prevention Act; repealing s. 501.997, F.S., relating
  194         to an exemption for institutions of higher learning;
  195         providing an effective date.