Update!—New TN Law Concerning Patent Infringement Allegations

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In recent years, state legislatures have attempted to pass legislation regarding patent law – an area that the U.S. Constitution states is exclusively governed by federal law. The stated goal behind many of these laws is to protect businesses from costs associated with defending “bad faith” patent infringement allegations (i.e. to protect from alleged “patent trolls”). Some argue that these laws are constitutional because they are more akin to consumer protection act legislation and do not necessarily overlap or interfere with federal law.

In Tennessee, the legislature recently passed such a bill to protect small businesses from costs associated with defending “bad faith” assertions of patent infringement. Public Chapter 879 went into effect May 1 of this year, and states that a person or company cannot send a written or electronic demand letter stating that another person or company is infringing upon their patent when: (i) the threat is made in conjunction with continual past threats where no litigation was filed; (ii) the letter falsely claims that litigation was filed; or (iii) the claims in the letter “lack a reasonable basis in fact or law.”

Certain organizations and claims are exempted from the statute; but ultimately, if you are seeking to enforce a patent or are receiving letters claiming that you are infringing upon a patent, you may want to consult with an attorney about this new law (codified at T.C.A. § 29-40-101 through 104). The consequences of ignoring the new law – which include the possibility of attorneys’ fee and punitive damage awards – could be costly.

 

 

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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