Amended in Senate June 3, 2015

Amended in Senate May 5, 2015

Senate BillNo. 681


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 engage in a pattern or practice of sending written 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 makes a specified false statement or representation in bad faith, fraudulently seeks compensation for specified conduct, or fraudulently conceals or omits specified information in the communication.

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 Attorneybegin delete General or byend deletebegin insert General,end insert an attorney acting on behalf of thebegin delete state.end deletebegin insert state, or a district attorney, county counsel, city attorney, or city prosecutor in this state.end insert The bill would specify thatbegin delete it doesend deletebegin insert its provisions doend insert 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:

P2    1

SECTION 1.  

Title 19 (commencing with Section 3273.5) is
2added to Part 4 of Division 3 of the Civil Code, to read:

3 

4Title 19.  Patent Demands

5

 

6

3273.5.  

For the purposes of this title, the following definitions
7shall apply:

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.

18

3273.6.  

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(a) The sender of the communication makes, in bad faith, any
25of the following statements or representations, knowing those
26statements or representations are false:

27(1) That the sender has the right to license or enforce the patent
28at the time the communications are sent, if the sender is not a
29person with that right.

30(2) That a civil action asserting a claim of infringement of the
31patent has been filed against either the recipient or against other
32persons.

P3    1(3) That legal action for infringement of the patent will be taken
2against the recipient.

3(4) That the sender is the exclusive licensee of the patent
4asserted in the communications.

5(5) That persons other than the recipient purchased a license for
6the patent asserted in the communications.

7(6) That persons other than the recipient purchased a license,
8and the sender does not disclose that the license is unrelated to the
9alleged infringement or the patent asserted in the communications.

10(7) That an investigation of the recipient’s alleged infringement
11has occurred.

12(8) That the sender, or an affiliate of the sender, previously filed
13a civil action asserting a claim of infringement of the patent based
14on the activity that is the subject of the written communication
15when the sender knew that the activity was held, in a final
16determination, not to infringe the patent.

17(b) The sender of the communication fraudulently seeks
18compensation for any of the following:

19(1) A patent claim that has been determined to be unenforceable
20or invalid against the recipient in a final determination.

21(2) Activity undertaken by the recipient after expiration of the
22patent asserted in the communication.

23(3) Activity of the recipient that the sender knew was authorized,
24with respect to the patent claim thatbegin delete areend deletebegin insert isend insert the subject of the
25communication, by a person with the right to license the patent.

26(c) The sender of the communication fraudulently conceals or
27omits any of the following information from the communication,
28when that information is readily available to the sender at the time
29the communication is sent:

30(1) The identity of the person asserting a right to license the
31patent to, or enforce the patent against, the recipient, including the
32identity of any parent entity and the ultimate parent entity of the
33person, unless that person is a public company and the name of
34the public company is identified.

35(2) Identification of at least one patent issued by the United
36States Patent and Trademark Office alleged to have been infringed.

37(3) Identification, to the extent reasonable under the
38 circumstances, of at least one product, service, or other activity of
39the recipient that is alleged to infringe the identified patent.

P4    1(4) A description, to the extent reasonable under the
2circumstances, of how the product, service, or other activity of the
3recipient infringes an identified patent and patent claim.

4(5) A name and contact information for a person the recipient
5may contact about the assertions or claims relating to the patent
6contained in the communications.

7

3273.7.  

(a) A person who sends a communication in violation
8of Section 3273.6 may be enjoined in a court of competent
9jurisdiction and is liable for a civil penalty not to exceed two
10thousand five hundred dollars ($2,500) for each violation. The
11penalty collected in an action by the Attorney General or an
12attorney acting on behalf of the state shall be paid to the General
13Fund.

14(b) begin deleteThe end deletebegin insertSubject to subdivision (c), the end insertAttorneybegin delete General orend delete
15begin insert General,end insert an attorney acting on behalf of the statebegin insert, or a district
16attorney, county counsel, city attorney, or city prosecutor in this
17stateend insert
shall have the sole authority to enforce thisbegin delete title.end deletebegin insert title with
18respect to the unlawful acts expressly enumerated in Section
193273.6.end insert
Nothing in this title shall be construed to create a private
20right ofbegin delete action.end deletebegin insert action with respect to the unlawful acts expressly
21enumerated in Section 3273.6.end insert

22(c) begin deleteNothing end deletebegin insertExcept as provided in subdivision (b) with respect
23to the unlawful acts expressly enumerated in Section 3273.6,
24nothing end insert
in this title shall be construed to impair or impede any
25other rights, causes of action, claims, or defenses available under
26other law. The remedies provided in this title are cumulative with
27any other remedies available under other law.



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