Indiana Patent Troll Statute for Demand Letters

HEA 1102- Bad Faith Assertions of Patent Infringement

Indiana- Patent Troll Statute- Demand Letters• HEA 1102- “Bad Faith Assertions of Patent

Infringement”– Effective: July 1, 2015

Ceremonial Signing July 22nd

• Exempt– Universities– University Tech Transfer Offices– University (or Tech Transfer) Licensees

• Does not apply to:– Orange Book/Biological Suits- 35 USC 271 (e)(2)

or 42 USC 262

Indiana- Patent Troll Statute- Definitions• "Demand letter" means a letter, electronic

mail, or any other written, including electronic, communication asserting that a target has engaged in patent infringement.– Does not include complaints filed in District

Court or ITC.

• "End user" means a person who purchases, rents, leases, or otherwise obtains a product or service in the commercial market that is not for resale in the commercial market and that is, or later becomes, the subject of a patent infringement allegation.

Indiana- Patent Troll Statute- Definitions• "Target" means any of the following:

– (1) An end user who has received a demand letter or against whom an assertion of patent infringement has been made.

– (2) An end user who has been threatened with litigation for patent infringement or against whom a lawsuit has been filed alleging patent infringement.

– (3) An end user whose customer has received a demand letter asserting that the person's product, service, or technology has infringed a patent.

Indiana- Patent Troll Statute

Chapter 3. Assertions of Patent Infringements in Bad Faith Prohibited

• Sec. 1. A person may not assert a claim of patent infringement in bad faith.

NotesVague language is present throughout the

statute.No apparent limit to just Indiana targets.

Indiana- Patent Troll Statute

Bad Faith Factors• Demand letter with incomplete information or

don’t provide the information in a reasonable time after request for information.– Failure for target to request required demand

letter information is not a defense.

• Fail to conduct infringement due diligence.

• Demand payment of license fee or response within unreasonable short period of time.

Indiana- Patent Troll Statute

Demand Letters Required Information• Patent number for infringed patent.

• Name and address of:– Patent Owner,– Assignees of the patent, and– Those retained to enforce the patent.

• Factual allegations identifying specific areas of target’s product/service infringing the patent.

Indiana- Patent Troll Statute

Bad Faith Factors• Offered licensed amount unreasonable estimate

of license value.

• Deceptive or meritless patent infringement assertion.

• Previously filed or threatened a lawsuit for a similar claim of patent infringement:– Lacked proper demand letter information, or– Court found claim to be meritless.

• Other factors court finds relevant.

Indiana- Patent Troll Statute

Bond- Upon a motion by a target & finding of the court that the target has established a reasonable likelihood of a bad faith assertion. (Either party can request a hearing on the bond request.)• Court require a bond =

– Good faith estimate of target to litigate +– Amounts reasonably likely to recover.

• Bond may not exceed $250,000.

• Court can waive bond if available assets equal bond amount or good cause showing.

Indiana- Patent Troll Statute

Remedies & Damages• Target (or others aggrieved) may bring action.

• Within 30 days of filing complaint must deliver copy of complaint to attorney general.

• Remedies & Damages are in addition to any existing federal or state relief.

Indiana- Patent Troll Statute

Remedies & Damages• Either Party (prevailing)- Reasonable attorneys

fees and expenses to prevailing party.

• Complainant (target)- any or all of the following:– Equitable relief– Greater of:

Actual damages, or Liquidated damages of $5,000/demand letter

– Punitive damages = greater of: $50,000, or Treble actual damages (3 X Actual Damages)

Want to know more?Chuck SchmalPatent Attorney

Woodard, Emhardt, Moriarty, McNett & Henry LLPChase Tower

111 Monument Circle, Suite 3700Indianapolis, IN 46204

317.713.4954cschmal@uspatent.com

www.uspatent.com

Indiana Patent Troll Statute for Demand Letters

HEA 1102- Bad Faith Assertions of Patent Infringement