BILL NUMBER: SB 681	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MAY 5, 2015

INTRODUCED BY   Senator Hill

                        FEBRUARY 27, 2015

   An act to add Title 19 (commencing with Section 3273.5) to Part 4
of Division 3 of the Civil Code, relating to civil law.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 681, as amended, 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  
engage in a pattern or practice of sending  written 
communication   communications,  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,   communication  makes
a specified  statement,   false statement or
representation in bad faith, fraudulently  seeks compensation
for specified conduct, or  fails to include  
fraudulently conceals or omits  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 
    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.
 The bill would specify that it does not impair or impede any
other rights, causes of action, claims, or defenses available under
other law and that the remedies provided for under its provisions are
cumulative with any other remedies available under other law. 

   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Title 19 (commencing with Section 3273.5) is added to
Part 4 of Division 3 of the Civil Code, to read:

      TITLE 19.  Patent Demands


   3273.5.  For the purposes of this title, the following definitions
shall apply:
   (a) "Final determination" means, with respect to the invalidity or
unenforceability of a patent, that the invalidity or
unenforceability has been determined by a court of the United States
or the United States Patent and Trademark Office in a final decision
that is unappealable or for which any opportunity for appeal is no
longer available.
   (b) "Recipient" 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.
   3273.6.   (a)    It is unlawful
for a person, in connection with the assertion of a United States
patent, to engage in a pattern or practice of sending written
communications that state or represent that the recipient is or may
be infringing, or has or may have infringed, the patent and is liable
or owes compensation to another, if any of the following conditions
are met: 
   (1) 
    (a)  The sender of the communication makes, in bad
faith, any of the following statements or  representations:
  representations, knowing those statements or
representations are false:  
   (A) 
    (1)  That the sender has the right to license or enforce
the patent at the time the communications are sent, if the sender is
not a person with that right. 
   (B) 
    (2)  That a civil action asserting a claim of
infringement of the patent has been filed against either the
recipient or against other persons. 
   (C) 
    (3)  That legal action for infringement of the patent
will be taken against the recipient. 
   (D) 
    (4)  That the sender is the exclusive licensee of the
patent asserted in the communications. 
   (E) 
    (5)  That persons other than the recipient purchased a
license for the patent asserted in the communications. 
   (F) 
    (6)  That persons other than the recipient purchased a
license, and the sender does not disclose that the license is
unrelated to the alleged infringement or the patent asserted in the
communications. 
   (G) 
    (7)  That an investigation of the recipient's alleged
infringement has occurred. 
   (H) 
    (8)  That the sender, or an affiliate of the sender,
previously filed a civil action asserting a claim of infringement of
the patent based on the activity that is the subject of the written
communication when the sender knew that the activity was held, in a
final determination, not to infringe the patent. 
   (2) 
    (b)  The sender of the communication seeks, in
bad faith,   fraudulently seeks  compensation for
any of the following: 
   (A) 
    (1)  A patent claim that has been determined to be
unenforceable or invalid against the recipient in a final
determination. 
   (B)
    (2)  Activity undertaken by the recipient after
expiration of the patent asserted in the communication. 
   (C) 
    (3)  Activity of the recipient that the sender knew was
authorized, with respect to the patent claim that are the subject of
the communication, by a person with the right to license the patent.

   (3) 
    (c)  The sender of the communication  fails, in
bad faith, to include any of the following in the communication:
  fraudulently conceals or omits any of the following
information from the communication, when that information is readily
available to the sender at the  time the communication is
sent:  
   (A) 
    (1)  The identity of the person asserting a right to
license the patent to, or enforce the patent against, the recipient,
including the identity of any parent entity and the ultimate parent
entity of the person, unless that person is a public company and the
name of the public company is identified. 
   (B) 
    (2)  Identification of at least one patent issued by the
United States Patent and Trademark Office alleged to have been
infringed. 
   (C) 
    (3)  Identification, to the extent reasonable under the
circumstances, of at least one product, service, or other activity of
the recipient that is alleged to infringe the identified patent.

   (D)
    (4)  A description, to the extent reasonable under the
circumstances, of how the product, service, or other activity of the
recipient infringes an identified patent and patent claim. 
   (E) 
    (5)  A name and contact information for a person the
recipient may contact about the assertions or claims relating to the
patent contained in the communications. 
   (b) It shall be an affirmative defense that the sender did not act
in bad faith if the sender demonstrates that the statement,
representation, or omission was a mistake made in good faith.
Evidence that the sender in the usual course of business sends
written communications that do not violate the provisions of this
title shall be sufficient to demonstrate good faith. Good faith may
also be demonstrated by other evidence. 
   3273.7.  (a) A person who sends a communication in violation of
Section 3273.6 may be enjoined in a court of competent jurisdiction
and is liable for a civil penalty not to exceed two thousand five
hundred dollars ($2,500) for each violation. The penalty collected in
an action by the Attorney General or an attorney acting on behalf of
the state shall be paid to the General Fund.
   (b)  Notwithstanding any other law, the   The
 Attorney General or an attorney acting on behalf of the state
shall have the sole authority to enforce this title.  This
  Nothing in this  title shall  not
 be construed to create a private right of action. 
   (c) Nothing in this title shall be construed to impair or impede
any other rights, causes of action, claims, or defenses available
under other law. The remedies provided in this title are cumulative
with any other remedies available under other law.