Kentucky Takes Action Against Patent Trolls

In the midst of the talk about patent reforms, the state of Kentucky has become one of the first to step up and take measure specifically against unreasonable demand letters filed by non-practicing entities (NPE).

On Feb 13th, 2014, the Judiciary Committee of the Kentucky Senate voted unanimously in favor of a bill (SB116) that attempts "to establish a bad-faith assertion of patent infringement as a violation of Kentucky's consumer protection chapter and authorize the utilization of the remedies available for those violations in addition to private remedies established in the bill".

This bill aims to establish a distinction between good-faith and bad-faith assertions. Some characteristics of bad-faith litigations include:

1. Failure to state the patent number, the name and address of the patent owner(s)/assignee(s), or specific factual allegations relating to the infringement claim 
2. The claim or assertion is "deceptive" (not defined)
3. The patent holder is a non-practicing entity

As we can conclude from the points made above, many of these demand letters at the moment do not even contain the most basic information such as the patent number, yet they are still deemed legitimate and firms are subject to their ill-natured demands. This in turn goes to show the lack of regulation in place concerning the reckless practices of patent trolls and the defenseless positions firms often find themselves in.

Overall, I think this bill demonstrates a thorough effort in laying out factors weighing for and against allegations of bad-faith patent assertions. Though many terms in the bill have not yet been defined, considerable work is still done in targeting patent trolls ( point #3 above) and curtailing abusive patent litigations. As we discussed in class, an infringement lawsuit filed by a NPE against Blackberry ultimately led to the firm's demise even though the patent involved was later on determined to be invalid. These infringement claims made by NPE's in most cases are formed on unlawful grounds and have the ability dictate the fate of companies in destructive ways that could directly hinder the overall economic performance of the country. Hence, it is about time that the government start to make gradual and considerable progress in tackling the insidious nature of patent trolls.

Source: http://www.fosspatents.com/2014/02/kentucky-senate-committee-approves.html