Policy: Law

Oregon lawmaker’s proposed legislation targets patent trolls’ ‘extortion scams’

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Oregon,Law,Patent Law,Legal Newsline

SALEM, Ore. (Legal Newsline) — Make Oregon the next state to crack down on so-called “patent trolls.”

Winters

Winters

On Tuesday, the state Senate Judiciary Committee heard testimony in support of Senate Bill 1540, a measure sponsored by Sen. Jackie Winters, a Salem Republican, and Rep. Jennifer Williamson, a Portland Democrat.

SB 1540 would make patent trolling a violation of Oregon’s Unlawful Trade Practices Act.

Patent trolls — also referred to as patent assertion entities — are companies that purchase groups of patents without an intent to market or develop a product. The companies then target other businesses with lawsuits alleging infringement of the patents they bought.

SB 1540 also would allow those who have been targeted by a patent troll to sue for attorneys’ fees.

“Oregon small businesses have plenty of challenges without worrying about extortion
scams,” Winters said.

The lawmaker said she decided to introduce the bill after being notified by a constituent about the issue.

At Tuesday’s meeting, Winters shared with fellow lawmakers the story of David Hafner, the executive vice president of Salem-based Landmark Professional Mortgage Company.

Hafner explained how, last year, his business became the target of a large patent trolling scam involving a high production scanner Landmark leased from Canon.

He said the company does not have the luxury of “excess resources” to spend defending such frivolous claims.

“As an Oregon small business owner, I am pleased for the efforts of SB 1540 that will help protect against such practices in the future and provide some avenue of assistance,” Hafner said.

View a copy of the letter he sent state lawmakers here.

Winters, a retired small business owner herself, said trolling is just “bad practice.”

“This type of harassment is something we should actively and aggressively discourage,” she said.

“I think citizens and small businesses of this state should not have to feel like they’re getting these demand letters for no reason, and then it ends up costing them an unnecessary amount of money.”

The Senate Judiciary Committee is set to hold a public hearing and a possible work session on the bill, which has bipartisan support in the legislature, Feb. 12.

Oregon wouldn’t be the first state looking to pass such a measure.

In December, Maine Sen. Anne Haskell, a Democrat, submitted legislation that would make patent trolling more difficult in the state.

Under Senate Paper 654, any company or person can file a lawsuit in superior court against someone who has made a bad faith assertion of patent infringement against them.

The court may award equitable relief, damages, costs and fees, including “reasonable” attorneys fees, and punitive damages equal to $50,000 or three times the total damages, costs and fees — whichever is greater.

Also under Haskell’s proposed bill, the state attorney general may bring an action for a bad faith assertion in violation of Maine’s Unfair Trade Practices Act.

Last year, Vermont passed and signed into law a similar measure designed to protect companies in the state from patent trolling.

Under Vermont’s new law — much like Haskell’s proposed bill — a court can consider as evidence a letter that does not provide the patent number, the name and address of the patent owner and/or assignee, or an explanation of how the target company’s products or services infringed on the patent.

The court also can consider if the letter demands payment of a license fee or a response in an “unreasonably short” period of time.

The Vermont law also allows the state attorney general to conduct civil investigations and bring civil lawsuits against violators, and the court may award relief or damages.

From Legal Newsline: Reach Jessica Karmasek by email at patents@legalnewsline.com.

Original Story: Oregon lawmaker’s proposed legislation targets patent trolls’ ‘extortion scams’

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