SB 681, as introduced, Hill. Civil law: patents.
Existing federal law provides for the issuance and enforcement of patents, makes a person who actively induces infringement of a patent liable as an infringer, and establishes rights and remedies for infringement of patents.
This bill would make it unlawful to send a written communication stating that the recipient, as defined, is or may be infringing, or has or may have infringed, on a United States patent if the sender of the communication, in bad faith, makes a specified statement, seeks compensation for specified conduct, or fails to include specified information in the communication. The bill would establish an affirmative defense if the sender of the communication demonstrates that the statement, representation, or omission was a mistake made in good faith. The bill would provide that a person who sends a communication in violation of these provisions may be enjoined and is liable for a civil penalty of up to $2,500 for each violation. The bill would also specify that its provisions are only enforceable by the Attorney General or by an attorney acting on behalf of the state.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Title 19 (commencing with Section 3273.5) is
2added to Part 4 of Division 3 of the Civil Code, to read:
For the purposes of this title, the following definitions
8(a) “Final determination” means, with respect to the invalidity
9or unenforceability of a patent, that the invalidity or
10unenforceability has been determined by a court of the United
11States or the United States Patent and Trademark Office in a final
12decision that is unappealable or for which any opportunity for
13appeal is no longer available.
14(b) “Recipient” means a person who purchases, rents, leases,
15or otherwise obtains a product or service in the commercial market
16that is not for resale in the commercial market and that is, or later
17becomes, the subject of a patent infringement allegation.
(a) It is unlawful for a person, in connection with the
19assertion of a United States patent, to engage in a pattern or practice
20of sending written communications that state or represent that the
21recipient is or may be infringing, or has or may have infringed,
22the patent and is liable or owes compensation to another, if any of
23the following conditions are met:
24(1) The sender of the communication makes, in bad faith, any
25of the following statements or representations:
26(A) That the sender has the right to license or enforce the patent
27at the time the communications are sent, if the sender is not a
28person with that right.
29(B) That a civil action asserting a claim of infringement of the
30patent has been filed against either the recipient or against other
32(C) That legal action for infringement of the patent will be taken
33against the recipient.
34(D) That the sender is the exclusive licensee of the patent
35asserted in the communications.
36(E) That persons other than the recipient purchased a license
37for the patent asserted in the communications.
P3 1(F) That persons other than the recipient purchased a license,
2and the sender does not disclose that the license is unrelated to the
3alleged infringement or the patent asserted in the communications.
4(G) That an investigation of the recipient’s alleged
6(H) That the sender, or an affiliate of the sender, previously
7filed a civil action asserting a claim of infringement of the patent
8based on the activity that is the subject of the written
9communication when the sender knew that the activity was held,
10in a final determination, not to infringe the patent.
11(2) The sender of the communication seeks, in bad faith,
12compensation for any of the following:
13(A) A patent claim that has been determined to be unenforceable
14or invalid against the recipient in a final determination.
15(B) Activity undertaken by the recipient after expiration of the
16patent asserted in the communication.
17(C) Activity of the recipient that the
sender knew was
18authorized, with respect to the patent claim that are the subject of
19the communication, by a person with the right to license the patent.
20(3) The sender of the communication fails, in bad faith, to
21include any of the following in the communication:
22(A) The identity of the person asserting a right to license the
23patent to, or enforce the patent against, the recipient, including the
24identity of any parent entity and the ultimate parent entity of the
25person, unless that person is a public company and the name of
26the public company is identified.
27(B) Identification of at least one patent issued by the United
28States Patent and Trademark Office alleged to have been infringed.
29(C) Identification, to the extent reasonable under the
30 circumstances, of at least one product, service, or other activity of
31the recipient that is alleged to infringe the identified patent.
32(D) A description, to the extent reasonable under the
33circumstances, of how the product, service, or other activity of the
34recipient infringes an identified patent and patent claim.
35(E) A name and contact information for a person the recipient
36may contact about the assertions or claims relating to the patent
37contained in the communications.
38(b) It shall be an affirmative defense that the sender did not act
39in bad faith if the sender demonstrates that the statement,
40representation, or omission was a mistake made in good faith.
P4 1Evidence that the sender in the usual course of business sends
2written communications that do not violate the provisions of this
3title shall be sufficient to demonstrate good faith. Good faith may
4also be demonstrated by other evidence.
(a) A person who sends a communication in violation
6of Section 3273.6 may be enjoined in a court of competent
7jurisdiction and is liable for a civil penalty not to exceed two
8thousand five hundred dollars ($2,500) for each violation. The
9penalty collected in an action by the Attorney General or an
10attorney acting on behalf of the state shall be paid to the General
12(b) Notwithstanding any other law, the Attorney General or an
13attorney acting on behalf of the state shall have the sole authority
14to enforce this title. This title shall not be construed to create a
15private right of action.