Patent Troll Watch - States Are Pushing Patent Trolls Away from the Legal Line

by Foley Hoag LLP

Oregon introduces bill to make improper patent license demands a violation of its unlawful trade practices law

In February 2014, Senate Bill 1540 was filed, which would  make patent trolling a violation of the Oregon’s Unlawful Trade Practices Act, and  allow an individual or business targeted by a patent troll to sue and recover attorneys’ fees.

The bill would make it a violation of the Unlawful Trade Practices Act to send a letter demanding that someone license a patent without identifying the patent or explaining why the recipient infringes. It would also be a violation to demand payment of a patent licensing fee within an "unreasonably short" period of time.

California holds informational meeting for legislators on patent trolls, and attorney general investigates troll

In October 2013, California legislators attended an informational meeting to discuss the effect that patent trolls are having on California businesses held at Google. And at that meeting, a representative of California state Attorney General Kamala Harris explained that California’s existing state laws, including the Cartwright Act, the state's unfair competition law, and other business tort laws can help businesses fight back against “overly aggressive patent assertion entities.” In addition, he indicated that the attorney’s general’s has investigated and confidentially confronted one unnamed troll in an effort to make it stop sending demand letters to California businesses.

Minnesota reaches settlement agreement with patent troll

In August 2013, after initiating an investigation, Minnesota Attorney General Lori Swanson becomes the first state Attorney General to reach a settlement agreement with a patent troll.  The agreement require the troll, MPHJ (the “scanner troll”) to give the attorney general's office 60 days' notice and obtain its consent before it sends any letters targeting Minnesota businesses.

Wisconsin passes law restricting patent-licensing demand letters

In March 2014, the Wisconsin State Assembly and Senate passed a bill making it a crime to send patent-licensing demand letters that contain false or misleading information.    The law requires, among other things, an analysis setting forth in detail how the recipient of the letter allegedly infringes.  It also authorizes the state attorney general to investigate misleading demand letters, and imposes penalties of up to $50,000.

Kentucky introduces bill to make bad faith assertion of patent infringement an unfair trade practice

In February 2014, Kentucky state senator Whitney Westerfield has introduced bill that would criminalize making bad faith patent infringement allegations or making baseless demands for licensing fees.  The bill would also render groundless infringement accusations a violation of the Kentucky Consumer Protection Act, and would enable purported infringers to sue the non-practicing entities, or patent trolls, that have approached them and to recover tripled damages, court costs and attorney fees.  “Making or threatening to make a bad-faith assertion of patent infringement shall be deemed an unfair, false, misleading, or deceptive act or practice in the conduct of trade or commerce,” the unofficial copy of the bill stated.

Nebraska Attorney General investigates patent troll, and introduces legislation to make baseless claims of patent infringement

In July 2013, Attorney General Jon Bruning initiated an investigation into the business and patent enforcement activities of Farney Daniels, based on the state’s belief that letters sent by Farney Daniels to Nebraska businesses violated the state’s unfair competition law.   The investigation was based on both the state Consumer Protection Act and the Uniform Deceptive Trade Practices Act.   AS part of the investigation, the Attorney General issued a cease and desist order against Farney Daniels.  Farney Daniels responded by adding members of the Nebraska Attorney General’s Office as parties to a patent lawsuit brought on behalf of Activision TV in federal court.  On September 30, the federal judge presiding in that case held that the cease and desist order violated the constitutional rights of Activision TV and enjoined its enforcement.  The Attorney General appealed that decision to the US Court of Appeals for the Eight Circuit, but voluntarily withdrew his appeal in November 2013.

In January 2014, Bruning proposed a bill in the Nebraska state legislature that would make it a crime to allege patent infringement in bad faith.

The Nebraska Patent Abuse Prevention Act, which was introduced by state Senator Heath Mello at Bruning's request, would make it a violation of Nebraska's existing state consumer protection law to send letters making baseless allegations of patent infringement.

The bill sets out numerous criteria for courts to consider as evidence that a patent infringement allegation was made in bad faith. The factors include sending a demand letter that does not identify the patent owner or patent number and does not provide factual allegations about how the recipient infringes.  In addition, demanding a license fee "within an unreasonably short period of time" or offering to license the patent for an amount that is "not based on a reasonable estimate of the value of the license," would count as bad faith under the bill, as would making an infringement allegation the patentee knew or should have known was meritless.

Missouri Attorney General announces investigation of  impact of patent trolls on Missouri businesses

In November, 2013, Attorney General Chris Koster announced that he is actively engaged in investigating the impact of trolls on Missouri businesses.

New York Attorney General investigates and settles investigation of patent troll

New York Attorney General Eric Schneiderman initiated and eventually settled an investigation of alleged patent troll MPHJ Technology, which resolved hundreds of law suits MPHJ had threatened to file against the state's small and mid-sized businesses.

Massachusetts Attorney General begins research whether existing consumer protection Law protects against patent trolls

In November, 2013, Massachusetts Attorney General Martha Coakley announced that her office was exploring ways to end baseless patent trolling.    The initiative includes investigating Massachusetts’ existing consumer protection statute, Chapter 93A, which deals with consumer rights and business rights, to bring legal actions against unfair or deceptive business practices by a business against a consumer, or against another business, as well as reviewing the statutes enacted by states such as Vermont and Nebraska, and the lawsuits the attorneys general those states have brought.

Vermont passes amendment to state consumer protection statute to address patent trolls, and Attorney General files lawsuit against patent troll

Also in May 2013, Vermont Attorney General William Sorrell filed a lawsuit suit under the state consumer protection law against an alleged patent troll, Vermont v. MPHJ Technology, Inc.  The first effort by an attorney general to use state consumer protection law to stop a patent troll, the complaint alleges that MPHJ sent letters containing false and misleading statements about, among other things, the asserted value of the license it was offering and the response the sender had received from the business community. Vermont also alleges that the letters’ threats of imminent litigation were false. The case was filed in state court, but the defendant removed it to federal court. The defendant has also moved to dismiss for lack of personal jurisdiction.

Maine introduces legislation to allow state lawsuit for bad faith patent infringement claim, and to allow state Attorney General to bring action for bad faith patent assertion

Legislation introduced in January 2014 would allow a company or person to file a lawsuit in superior court against someone who has made a bad faith assertion of patent infringement against them.  It would also allow the state Attorney General to bring an action for a bad faith assertion in violation of the state’s Unfair Trade Practices Act.

Pennsylvania introduces bill to limit frivolous patent lawsuits

Pennsylvania Senate Bill No. 1222, introduced in February 2014, would limit and discourage frivolous patent infringement lawsuits. It would allow a target of a demand letter, someone threatened with patent infringement, or a defendant in a patent infringement lawsuit to bring an action in state court (the court of common pleas) for bad faith.

Virginia approves legislation to prohibit bad faith patent claims

In January 2014, the Virginia House and Senate approved legislation to prohibit patent trolls or anyone from making in bad faith an assertion, claim, or allegation that a resident of the Commonwealth is infringing a patent.

National Association of Attorneys General submits letter from 42 states supporting federal legislation to curb patent trolls

On February 24, 2013, the Attorneys General from 42 states signed a letter supporting federal patent reform legislation, including measures to curb patent trolls.  Those states were Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Florida, Guam, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, and Wyoming.

The states who did not participate were California, Delaware, Georgia, Montana, North Dakota, Ohio, Oklahoma, South Dakota, and West Virginia.

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.

© Foley Hoag LLP | Attorney Advertising

Written by:

Foley Hoag LLP

Foley Hoag LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.