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IP Litigation

Wisconsin joins anti-patent "troll" club

March 26, 2014

IP Litigation

Wisconsin joins anti-patent "troll" club

March 26, 2014

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Last week, Wisconsin became the latest state to join the anti-patent “troll” club when its state senate passed legislation targeting co-called patent assertion “demand letters.”Map of Wisconsin

Senate Bill 498 would tightly regulate such letters, which inventors, companies, or other “patent assertion entities” send to businesses or individuals they believe are infringing their patents, seeking some form of compensation.

Under the proposed legislation, which heads to the state assembly this week, any such letter must include: the patent number; a copy of the patent itself; the name and address of each party with a right to enforce it; an identification of each patent claim the owner believes is infringed, accompanied by “factual allegations and an analysis setting for in detail the [patent owner’s] theory” of how the claim is infringed; and a list of all legal proceedings involving the patent.

The bill empowers the state attorney general to investigate any violations, each of which would incur a $50,000 penalty. Individuals aggrieved by receiving noncompliant demand letters would also enjoy a private cause of action against the senders.

State Rep. Adam Neylon, who introduced similar legislation in the state assembly last month, stated that “as new technology develops, this type of predatory behavior will persist unless something is done to level the playing field.”

At the same time, Neylon rightly insisted that “we must protect the innovation leading to job creation, without over-regulating the process so companies or institutions making a legitimate claim are protected.”

Wisconsin joins Nebraska, Vermont, Oregon, and Kentucky as yet another state seeking to crack down through consumer protection laws on what it believes to be the scourge of unjustified demand letters.

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