As Federal Legislation Stalls, States Pass Bills to Curb Patent Trolling

This article is part of SSTI's series on trends in state technology-based economic development legislation in 2014. Read our other entries covering legislative action on research capacity, technology commercialization & infrastructure, capital & tax credits, workforce & STEM and manufacturing & clusters.

In May, federal policymakers tabled patent troll reform legislation indefinitely due to differences of opinion on the scope of the bill, according to VTdigger.org. While the promise of federal legislative reform for 2014 dims, as many as 21 states may have patent troll laws on the books before the end of the year. Although most of the power to curb patent trolling is held by the federal government, these state laws provide mechanisms to allow for action to be taken against any person that makes a bad faith assertion of patent infringement and other abusive patent litigations.

Since the start of the 2014 legislative session, 13 states have signed patent troll reforms into law including Alabama (SB 121), Georgia (HB 809), Idaho (SB 1354), Louisiana (SB 255), Maine (SP 654), Maryland (SB 585), Oklahoma (HB 2837), Oregon (SB 1540), South Dakota (SB 143), Tennessee (HB 2117), Utah (HB 117), Virginia (HB 375), and Wisconsin (ACT 339). These 14 states joined Vermont who passed Act 44 in 2013, becoming the first state with a patent troll law. Many of these state laws mirror the original Vermont law that empower state attorney generals to investigate cases of patent trolling. The investigation can result in lawsuits by the state against the troll and gives the companies that were trolled the right to sue for damages, costs, and attorneys’ fees. However, some of the laws passed only strengthened the ability of the state attorney general to sue on behalf of citizens of the state.  In several states, the laws also allow the state courts to establish criteria for patent infringement and assertions made in bad faith.

Before their legislative sessions adjourned, the legislatures of Illinois and Missouri passed patent troll bills that await gubernatorial approval. In Illinois SB 3405 was passed unanimously by the state Senate (48-0). On May 5, the Missouri Senate voted 143 to 4 to pass their patent troll bill – SB 706. Governor Nixon has the option to sign or veto the bill before August 28 or it automatically becomes law. New Hampshire also passed a patent troll bill (SB 303) during their Senate session that awaits gubernatorial approval.

While most of the country’s legislative sessions have ended, an additional four states have introduced or are considering similar legislation that could pass patent troll legislation before their legislative sessions adjourn for 2014. They include New Jersey (S 1563) North Carolina (HB 1032), Ohio (HB 573), and Pennsylvania (SB 1222). In North Carolina, SB 1222 already has received House approval, but the legislative session adjourns in early July. In New Jersey, Ohio, and Pennsylvania, the respective bills have only been introduced, but the legislatures meet throughout the year.

Several others will have to wait until 2014 for new patent troll bills because the state legislature adjourned before they could pass both the state House and Senate. They include Connecticut (SB 258), Kansas (HB 2663) Kentucky (SB 116), Rhode Island (SB 2822), and South Carolina (H 4629).

In addition to those states, bills in Nebraska (LB 677) and Mississippi (HB 521) stalled in the state legislatures before their legislative sessions ended. Nebraska’s bill was discussed during the Nebraska legislative session. However, the session ended in April and the bill’s status is “indefinitely postponed.” In Mississippi, HB 521 stalled in the Senate Judiciary Committee.