PRINTER'S NO. 1741
THE GENERAL ASSEMBLY OF PENNSYLVANIA
INTRODUCED BY TOMLINSON, PILEGGI, VOGEL AND EICHELBERGER, FEBRUARY 4, 2014
REFERRED TO JUDICIARY, FEBRUARY 4, 2014
6Section 1. Legislative findings and purpose.
9(1) This Commonwealth is striving to build an
10entrepreneurial and knowledge-based economy. Attracting and
11nurturing small and medium-sized Internet technology and
12other knowledge-based companies is an important part of this
13effort and will be beneficial to this Commonwealth's future.
14(2) Patents are essential to encouraging innovation,
15especially in the Internet technology and knowledge-based
16fields. The protections afforded by the Federal patent system
17create an incentive to invest in research and innovation,
18which spur economic growth. Patent holders have every right
4(3) The General Assembly does not wish to interfere with
5the good faith enforcement of patents or good faith patent
6litigation. The General Assembly also recognizes that it is
7preempted from passing any law that conflicts with Federal
9(4) Patent litigation can be technical, complex and
10expensive. The expense of patent litigation, which may cost
11hundreds of thousands of dollars or more, can be a
12significant burden on small and medium-sized companies. The
13Commonwealth wishes to help its businesses avoid these costs
14by encouraging the most efficient resolution of patent
15infringement claims without conflicting with Federal law.
16(5) In order for companies in this Commonwealth to be
17able to respond promptly and efficiently to patent
18infringement assertions against them, it is necessary that
19they receive specific information regarding how their
20product, service or technology may have infringed the patent
21at issue. Receiving such information at an early stage will
22facilitate the resolution of claims and lessen the burden of
23potential litigation on companies in this Commonwealth.
24(6) Abusive patent litigation and the assertion of bad
25faith infringement claims can harm companies in this
26Commonwealth. A business that receives correspondence
27asserting such claims faces the threat of expensive and
28protracted litigation and may make a decision that it has no
29choice but to settle and to pay a licensing fee, even if the
30claim is meritless. This severely impairs small and medium-
4(7) Not only do bad faith patent infringement claims
5impose a significant burden on individual businesses in this
6Commonwealth, they also undermine this Commonwealth's efforts
7to attract and nurture small and medium-sized Internet
8technology and other knowledge-based companies. Funds used to
9avoid the threat of bad faith litigation are no longer
10available to invest, produce new products, expand or hire new
11workers, thereby harming this Commonwealth's economy.
12(b) Purpose.--Through this narrowly focused act, the General
13Assembly seeks to facilitate the efficient and prompt resolution
14of patent infringement claims, protect businesses in this
15Commonwealth from abusive and bad faith assertions of patent
16infringement and build this Commonwealth's economy, while at the
17same time respecting Federal law and being careful to not
18interfere with legitimate patent enforcement actions.
19Section 2. Definitions.
26"Target." A person:
5Section 3. Bad faith assertions of patent infringement.
13(i) The patent number.
20(2) Prior to sending the demand letter, the person fails
21to conduct an analysis comparing the claims in the patent to
22the target's products, services and technology, or such an
23analysis was done but does not identify specific areas in
24which the products, services and technology are covered by
25the claims in the patent.
30(4) The demand letter demands payment of a license fee
1or response within an unreasonably short period of time.
19(9) Any other factor the court finds relevant.
1negotiate an appropriate remedy.
5(5) The person is:
13(6) The person has:
19(7) Any other factor the court finds relevant.
20Section 4. Bond.
21Upon motion by a target and a finding by the court that a
22target has established a reasonable likelihood that a person has
23made a bad faith assertion of patent infringement in violation
24of this act, the court shall require the person to post a bond
25in an amount equal to a good faith estimate of the target's
26costs to litigate the claim and amounts reasonably likely to be
27recovered under section 5, conditioned upon payment of any
28amounts finally determined to be due to the target. A hearing
29shall be held if either party so requests. A bond shall not
30exceed $250,000. The court may waive the bond requirement if it
3Section 5. Enforcement, remedies and damages.
4(a) Enforcement.--The Attorney General shall have the same
5authority under this act to make rules, conduct civil
6investigations, bring civil actions and enter into assurances of
7discontinuance as under the act of December 17, 1968 (P.L.1224,
8No.387), known as the Unfair Trade Practices and Consumer
9Protection Law. In an action brought by the Attorney General
10under this act the court may award or impose any relief
11available under the Unfair Trade Practices and Consumer
13(b) Remedies.--A target of conduct involving assertions of
14patent infringement, or a person aggrieved by a violation of
15this act or by a violation of rules adopted under this act, may
16bring an action in a court of common pleas. A court may award
17the following remedies to a plaintiff who prevails in an action
18brought under this act:
19(1) Equitable relief.
21(3) Costs and fees, including reasonable attorney fees.
25(c) Construction.--This act shall not be construed to limit
26rights and remedies available to the Commonwealth or to any
27person under any other law and shall not alter or restrict the
28Attorney General's authority with regard to conduct involving
29assertions of patent infringement.
30Section 6. Effective date.
1This act shall take effect in 30 days.